EUR/JPY and EUR/GBP led the way higher for the EUR crosses as the lack of any more bad news out of the EZ encouraged traders to cut their short positions. The massive rush to sell the Yen showed no sign of abating, with NZD/JPY leading the way higher for the JPY crosses.
There are quite a few risk events on today’s economic calendar with Ben Bernanke scheduled to make a speech, wand Chinese CPI and BOJ meeting minutes also likely to add to volatility.
USD/JPY continues on its inexorable march towards 100.00. There are likely to be barriers at this level which may slow things down but the next technical resistance of note is a weekly high at 101.40. Support levels are not close by, not really starting until 97.50, so do be wary of excessive volatility.
EUR/JPY is also powering towards a big psychological level at 130.00 and there is little technical resistance there either until we reach the mid 130’s. Initial support is now at previous highs near 128.00.
The EUR made solid gains on other crosses like EUR/GBP for instance, but most of these gains came through a weaker cable leg. EUR/USD has steadied around 1.3000 but traders report stops building above 1.3050, so the immediate danger is most likely to the topside.
Cable should find some support near the previous resistance level at 1.5250 but the overall bear trend is still in control so I prefer the sell-rally play. EUR/GBP support levels start at .8500 and the next topside target is at .8560.
EUR/CHF is also trying to form a base above 1.2130 but needs to regain a foothold above 1.2200 before the bulls can start feeling a bit more confident.
The NZD was in demand again overnight and its TWI has reached new post-float highs. NZD/JPY made another sharp move higher overnight and highs from 2008 at 83.10 were breached.
The AUD is unable to maintain momentum in either direction, and the possible double-top formation on the short term charts has been negated by the close back above 1.0400. Range trading is still dominating the AUD/USD whilst the runaway bullish AUD/JPY trend is now targeting 104.50 weekly highs.
Good luck today.