Euro down another leg to fresh 9-year lows

USD/JPY moved higher once again, powering up from a retracement low of 118.84 late in New York and 119.17 early in Asia to 119.82. The 2%+ rally in the Nikkei after slightly smaller gains on Wall Street overnight and more stable US yields helped give a lift to the USD. EUR/JPY saw a bump up from 141.13 to 141.68.

EUR/USD opened in Asia at 1.1840 after heaviness overnight on the negative Eurozone inflation reading. Up a bit to 1.1848 early, it came under gentle pressure later, falling back to 1.1816 before option-related bids pre-1.1800 discouraged attempts lower. Sentiment remains bearish on building expectations of full-blown ECB QE at the January 22 meeting and ongoing Greece political uncertainty. Stops are seen large below presumed option barriers at 1.1800, and a break below could see significantly lower levels.

GBP/USD edged lower from 1.5118 to 1.5086 in Asia with short-covering flows seen late in New York having abated and sentiment still decidedly bearish. EUR/GBP did little, holding between 0.7830-38 with specs equally bearish EUR.

USD/CHF edged down to 1.0137 early before bouncing later to 1.0163 in line with USD/JPY strength. EUR/CHF did nothing again, treading water between 1.2009-12 and still under threat of SNB action pre-1.2000.

AUD/USD opened in Asia at 0.8081 and saw another bump up from 0.8072 to 0.8116, making more tracks away from last night’s 0.8033 low. Better than expected building approvals data squeezed algo players. AUD/JPY buys helped too.

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