GBP/USD: The pair trended lower for much of the session

EUR/USD

The pair settled the session lower, underpinned by comments from EU’s Juncker who said that the EUR exchange rate is dangerously high. Even though comments from ECB's Nowotny managed to support the pair earlier in the session, cautious sentiment linked to uncertainty surrounding debt ceiling talks in the US buoyed demand for safe haven assets. Of note, the German economy ministry cut their growth forecast for Germany from 1% to 0.4% as expected following earlier source comments during the week. In terms of technical levels, supports are seen at the 21DMA line at 1.3200, the 10DMA line at 1.3193 and then at 1.3039.

GBP/USD

The pair trended lower for much of the session however crucially settled above the key 1.6000 level as market participants continued to fret over the potential loss of the much cherished AAA rating. On that note, Fitch analysts noted that the risks of Britain losing it AAA status are clearly increasing. Fitch warned it could downgrade the UK if the country's budget in March shows debt levels continuing to rise. In terms of technical levels, supports are seen at 1.5962/20 and then at 1.5828. On the other hand, resistance levels are seen at the 10DMA line at 1.6079, the 21DMA line at 1.6137 and then at 1.6182.

USD/JPY

Even though the spot settled lower, as market participants reacted to comments from LDP general secretary Ishiba said a weaker JPY may be troublesome for some industries, options market remained active and the 1-month implied vol edged to highest level since Sep-2011. In terms of technical levels, supports are seen at 87.40, 86.77 and then at 86.52. On the other hand, resistance levels are seen at 88.88, 89.09 and then at 89.67.
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