Consolidation of major pairs in quiet trading

USD/JPY and the JPY crosses did little in Asia. Like yesterday, volume was low. There were no one-off flows like yesterday to push the market to and fro either. USD/JPY traded very quietly between 117.66-98 and mostly between 70-85. Japanese investors including GPIF look to buy on dips as was the case yesterday when it fell to 117.69 before bouncing. Today saw it down to 117.66 on a smattering of Japanese exporter month-end sales but another bounce ensued with investor demand still from 60-70. Japanese exporters sold on 118 yesterday, and more offers are eyed on this handle and especially above 118.50. So-so large option expiries are tipped at 117.50 again, and look to help support the downside. EUR/JPY did little in a relatively tight 146.87-147.15 range. GBP/JPY, AUD/JPY and NZD/JPY likewise treaded water between 184.88-185.27, 100.47-85 and 91.94-92.26, respectively. EUR/JPY and GBP/JPY traded soggy on the soggy side whilst NZD/JPY looked slightly better bid. AUD/JPY saw bargain-hunting after the push down to 100.38 late in New York overnight. Asia saw a continuation of such moves early before pushing back.

EUR/USD opened in Asia at 1.2474 after getting a lift in US trading on worse than expected US consumer confidence and EUR/AUD buying. Sidelined for the most part, it could only manage a 1.2466-85 range. EUR is getting some support from the rush of investment into EZ stocks and bonds. EZ bond yields are at record lows and EZ stock markets are on a tear on expectations of more ECB ease. Such flows will not continue indefinitely however and central bank expectations should eventually reignite the longer-term trend down.

GBP/USD fell back modestly from an early high of 1.5721 to 1.5691 in Asia. Cable peaked at 1.5736 overnight after weak US consumer confidence data. EUR/GBP looked slightly better bid between 0.7939-47, on the grind up from 0.7904 Monday.

USD/CHF traded on a lower plane in Asia after plunging last night after weak US consumer confidence data. The range was 0.9631-46 with flows few and far between. EUR/CHF did little, treading water between 1.2024-27.

AUD/USD opened in Asia at 0.8534. Holding between 0.8525-35 early, a short squeeze ensued with a rally up to 0.8563 seen before it fell back as intra-day specs pared back longs. The retracement low was 0.8528 and the pair has since steadied. The bias remains down with many eyeing a test below 0.8500 and possibly into a 0.80-0.85 range.

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