It should be a very quiet session today in Asia with the US Thanksgiving holiday usually leading to a long weekend for many financial markets participants and Japanese markets also closed today.
It was a case yesterday of getting the weak trailing stops triggered before the onset of the weekend and most of this goal seems to have been achieved. EUR/USD triggered stops above 1.2850 during Asian trade and then triggered more above 1.2885 during European trade. Talk of a barrier at 1.2900 and corporate sell orders at 1.2905/10 was then enough to repel bullish momentum. A fall of 50bs in Greek 10-year yields also helped EUR optimism.
EUR/GBP broke and closed back above its 200-day MA (see chart) and although this level has become less relevant technically in recent weeks, the bulls will now try and regain control.
EUR/JPY breached a weekly trendline but failed to close above there and the short term charts still look exceedingly overbought (see chart). Once a short-term top forms, look for a pullback towards the previous resistance level at 104.80.
USD/JPY is similarly overbought (see chart) and for the first time
in a few days, prime brokers reported more JPY buying than selling overnight. Looks like we might get a period of consolidation, and I’d look to an 81.50/83.00 type range.
The AUD is stuck in range trading mode and the focus is elsewhere. AUD/JPY buying has been holding the AUD up across the board but once that dries up, and with expectations of a rate cut firming, we could see another short-term selloff to retest those Sovereign bids below 1.0300.
USD/CAD stalled again ahead of .9950 and looks to be in danger of a short-covering rally, especially if 1.0000 is regained.
Cable eased lower in line with the higher EUR/GBP cross with relations between the UK PM and his EZ counterparties reportedly worsening.
Good luck today and TGIF.