EUR/USD extends losses to new 11-year low post ECB

USD/JPY and the JPY crosses fell back with many booking profits on FX and stock longs ahead of the weekend. It was an event/news-filled week and more will be seen Sunday with the Greek election. News of Saudi King Abdullah’s death caused crude oil to spike and affected some of the petro-commodity crowd and keeping volatility high. USD/JPY led the complex down despite good demand at today’s Tokyo fix. From 118.82 into the fix, Japanese exporters whacked it, quickening specs moves out. Option-related offers remained in place ahead of expiring 119.00 (625 mln) and 119.50 (1.007 bln) strikes. A low of 118.24 was seen before the market steadied. Option expiries helped limit the downside too with 118.25 (864 mln) and 118.00 (2.575 bln) strikes also going off. EUR/JPY saw short-covering to 135.05 before falling back to 134.41. 134.28 was the low last night and 134.15 the spike low October 16. Stops are eyed sub-134.15 and 134.00, the latter on optionality. GBP/JPY spiked from 177.54 to 178.49, AUD/JPY from 94.79 to 95.32 and NZD/JPY from 88.69 to 89.18 before falling back. The JPY bias is down again with recent CB moves seen prompting the BoJ to do more by March end.

EUR/USD opened in Asia at 1.1360 after an ECB QE announcement which exceeded expectations. Consolidating mostly after the plunge overnight, EUR/USD eked out a 1.1338-76 range. Sentiment remains extremely bearish and fundamentals should continue to provide fresh reasons to sell. Key tech support is eyed at 1.1212, Fibo 61.8% retracement of the 0.8228-1.6040 move. Offers look to be stiff now ahead of 1.1450. With regard to the Greek election Sunday, the anti-austerity Syriza Party appears headed for victory.

GBP/USD rallied from a fresh trend low of 1.4973 to 1.5027 before falling back. EUR/GBP traded 0.7554-77, perhaps consolidating ahead of another push down.

USD/CHF traded nervously between 0.8681-0.8721 with liquidity still virtually nil. EUR/CHF likewise remained in a holding pattern between 0.9870-0.9913.

AUD/USD opened in Asia at 0.8025 after trading down to 0.7995 late in the US day as option barriers at 0.8000 were taken out. Off again to 0.8005 early, it rebounded to 0.8035-40 and then 0.8056 post-China PMI data. Heavy sales later saw it down again to 0.7989, a fresh trend low and levels last seen in July ’09. Australia’s relatively high yields has resulted in sporadic AUD buys against some of the low yield currencies but there seems to be plenty more sellers given the dovish turn in RBA expectations and commodities market weakness. Tech support is eyed at 0.7945, Fibo 61.8% retracement of the 0.6007-1.1081 move.

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