USD/JPY opened the Asian session at 119.42 after soaring higher due to buoyant equity markets and another rise in US Treasury yields. USD/JPY traded with an offered tone early in the session and traded down to 119.29 with small volumes going through. The Tokyo holiday resulted in very small volumes and the pair reversed higher to trade to 119.64 later. Heading into the afternoon session the USD/JPY was trading around 119.60. The break and close above the top of the daily ichimoku cloud at 119.05 was a bullish event and that reading should be support going forward. There is talk of option related selling ahead of psychological resistance at 120.00 – but the next technical resistance is found at a series of daily highs around 120.80. The key to direction later today will be EUR/JPY flows in reaction to headlines from the EZ/Greece emergency FinMin meeting today – and moves in US Treasury yields.
EUR/USD opened the Asian session at 1.1322 after a whippy session that produced little net/net change on the day. EUR/USD edged higher early in the Asian session when there was some light profit taking on long USD positions – but ran into decent selling interest at 1.1331 to cap the price action. The Tokyo holiday ensured a very quiet session that produces a meager 1.1310/1.1331 range on the day. EUR/USD was trading at 1.1320 heading into the afternoon session. The main focus today will be the headlines coming from the EZ finance ministers’ emergency meeting to discuss a Greek proposal for easing their debt burden. Reports indicate that Greece will present a 10-point plan to replace around 30% of its bailout deal. While there may be some headlines – there won’t be any final agreements and most analysts feel the back-and-forth could drag out for some time. There are EUR/USD buyers ahead of 1.1250 while sellers are lined up around the 1.1350 level.
GBP/USD traded a 1.5247-68 range in Asia on Wednesday; last at 1.5247.
USD/CHF traded a 0.9258-73 range in Asia on Wednesday; last at 0.9268.
AUD/USD opened on Wednesday at 0.7773 and traded a 0.7764-95 range in Asia; last at 0.7765. The pair has been choppy within a tight range today but has showed little inclination to rally after last night’s London sell-off (1.0% from yday’s high). AUD/USD continues to lose ground to NZD/USD with the AUD/NZD cross down to 1.0460 and now eyeing stops below 1.0400. AUD/USD just cannot find any traction with short covering rallies lucky to last a session. Yesterdays soft China CPI, which raised the spectre of an earlier than expected PBOC interest rate cut, was hosed down in the Q4 Monetary Statement which (reportedly) started AUD’s demise overnight. China press today suggested that there was room to move on rates whilst Nomura maintains their Q2 interest rate cut call. None of this really benefited the AUD today with a quick stop run in NZD/USD towards 0.7450 taking AUD/USD to 0.7795 before momentum waned returning AUD/USD to near session lows. Overall AUD has few friends and while short squeezes will be seen from time to time the overriding theme is to sell any AUD rallies.