USD/JPY saw weakness early with longs locking in profits and on some Japanese exporter sales. From 120.90, it fell to 120.61 before bouncing. A bouncing Nikkei, higher US yields and talk of good Japan importer-investors bids on dips (and as confirmed in February MoF flow data) saw it rally to 121.14 before steadying. Japanese exporter sales and profit-taking by longs look to only slow further USD/JPY rises should the market decide to move higher. Bids are eyed from around 120.50. Topside stops are eyed above 121.30. Some option expirations today at 121.00 are helping to anchor the market down currently. EUR/JPY bounced from 130.71 to 131.29 though the bias remains down. GBP/JPY bounced from 181.47 to 182.38. AUD/JPY lacked bounce, up from 92.91 but to shy of its 93.23 early high. NZD/JPY traded heavy, off marginally from 89.01 to 88.59 and maybe retracing recent gains.
EUR/USD opened in Asia at 1.0831, below New York’s 1.0846 close. It traded down to a fresh 11½-year low of 1.0822 very early before dead-cat bouncing to 1.0855 on option-related interest. The move up was met by very good selling from the high. Sentiment remains decidedly bearish with US-EZ yield spreads continue to widen. With the ECB also likely struggling to find enough EZ sovereign bonds to satisfy QE objectives, more EUR downside may be inevitable. Key support below is eyed at 1.0762, the low in September ‘03.
GBP/USD too bounced from an early Asia low of 1.5025 to 1.5066. EUR/GBP treaded water between 0.7196-0.7205, just above Friday’s fresh trend low of 0.7182.
USD/CHF dipped early from 0.9874 to 0.9839 before bouncing a la USD/JPY and looks to be heading for highs seen in January. EUR/CHF see-sawed between 1.0670-1.0702 in choppy fashion with liquidity very low.
AUD/USD opened in Asia at 0.7707 after falling hard Friday post-US NFP. Choppy initially between 0.7703-27 on indecisive China trade data over the weekend, it fell through strong support around 0.7700 to 0.7684. Some of the selling may have been option-related with A$1.15 bln in vanilla expirations aat 0.7700 today.
NZD/USD opened in Asia at 0.7356 after falling hard post-US NFP data Friday. Good manufacturing sales data out early was all but ignored. Trading initially either side of 0.7360, inability to attract any buyers saw it fall hard to 0.7323, a fresh one-month low. PM Key comments probably helped. Divergent RBNZ-FOMC outlooks suggest more NZD weakness to come.