Consolidation as markets await nonfarm payrolls

USD/JPY edged lower in the Asia session from 120.19 to 119.92, moving off yesterday’s high of 120.40 high. Most of it was due to profit-taking on that rally ahead of US nonfarm payrolls later today. The downside was limited just above the key 120.00 level. EUR/JPY traded off from 132.50 to 132.17 but held between yesterday’s 132.13 low and 132.54 high.

EUR/USD consolidated in a range after tumbling to fresh 11-year lows following a press conference by ECB Chief Mario Draghi yesterday after a policy meeting. Although ECB economic projections were revised higher, and the rally on this was short-lived after the Bank’s QE program raised concern that there will not be enough supply of bonds for QE. With QE also due to begin on March 9, more euro downside could be expected. EUR/USD traded in a tight 1.1014-33 range in Asia just above the post – ECB/Draghi low of 1.0988. EUR/GBP traded between 0.7231-36, just above yesterday’s fresh trend low of 0.7220. EUR/CHF eased from 1.0745 to 1.0725 but was most probably supported by possible SNB intervention.

GBP/USD was volatile, off sharply from 1.5238 to 1.5194 before rallying sharply to 1.5257. It has since steadied.
USD/CHF eased back a bit in Asia from 0.9744 to 0.9725 but just below yesterday’s high of 0.9750.

AUD/USD opened in Asia at 0.7781 and traded up another leg from 0.7776 to 0.7814, making tracks away from yesterday’s 0.7754 low. The bounce higher looks precarious however. A good US NFP report today and a stronger greenback could send the aussie lower again.
NZD/USD moved off yesterday’s low of 0.7454 and the pair moved up modestly from 0.7478 to 0.7502. Focus turns to the RBNZ policy meeting next week.

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