USD/JPY saw a head-fake down early, off from 121.22 to 120.85 early in Asia before grinding back up. Long liquidation was the driving force behind the push down from 122.04 yesterday, and many were eager buyers once again after the selling abated. The surprising bounce in the Nikkei after the Wall Street plunge overnight helped with USD/JPY rising after the TSE open alongside the Nikkei. A high of 121.50 has been seen so far in the afternoon. Some option expirations at 121.50 ($410 mln) are helping to cap the market currently. More expiries are eyed at 122.00 (1.190 bln) and below at 121.00 (765 mln) and 120.50 (908 mln). Japanese exporter and other offers remain above 122.00 but stops are eyed 122.05+. EUR/JPY bounced from an early Asia low of 129.23 to 129.95 before easing off with the bias still decidedly down. GBP/JPY bounced from 182.19 to 183.04. NZD/JPY bounced from around 87.90 to 88.37 before turning down later to 87.76 on caution ahead of tonight’s RBNZ policy announcement. AUD/JPY fell in sympathy from 92.72 to 92.13.
EUR/USD opened in Asia at 1.0698 and was immediately smacked down to 1.0666 on good sales from an US fund in thin conditions. It steadied before fresh bids came in and took it back to 1.0718 in a peppery start to the Asian day. Steady around 1.0700 for a time, it came under renewed pressure on across the board USD strength. Sentiment remains decidedly bearish with ECB QE depressing EZ yields from already historically low levels. Weakness is eyed into next week’s FOMC meeting where the Fed is widely expected to drop “patience” from its forward guidance. 1.0500 looks to be the immediate target and the chorus of parity calls is growing louder by the minute.
GBP/USD did little in Asia, see-sawing between 1.5053-87 and holding just above recent lows. EUR/GBP remained on the back foot, off from 0.7106 to a fresh trend low of 0.7081 and levels not seen since November-December ‘07.
USD/CHF remained bid in a 0.9970-1.0000 range in Asia. EUR/CHF was on the back foot, off modestly from 1.0687 to 1.0660.
AUD/USD opened in Asia at 0.7622 and traded choppy first up with light short covering and exporter buying taking it to 0.7645 before the flows abated. It steadied between 0.7625-35 before broad based USD buying kicked in, sending AUD/USD through 0.7600 to 0.7588. Broad NZD weakness ahead of tonight’s RBNZ policy announcement helped. Key psychological support is eyed below at 0.7500.
NZD/USD closed in New York at 0.7274, extending its decline from last Wednesday. Choppy sideways trading between 0.7265-95 was followed by more moves down to 0.7237 in Asia on expectations of a dovish RBNZ statement tomorrow. AUD/NZD saw a leg up from 1.0461 to 1.0514, helping to give NZD a broad bear tone. Many now eye a NZD/USD test of the February 3 trend low of 0.7177 with a breach likely to see a test of the March ’11 low of 0.7125.
Source:: USD/JPY remains above 121.00