GBP/USD traded to the upside on the session

EUR/USD 

The pair felt the effects of light news flow and light volumes ahead of the FOMC minutes, yet was still supported by reports of strong demand for the new Greek bond, to be issued tomorrow, with the 10y yield falling below 6% for the first time since 2010. Despite the Spanish PM Rajoy and ECB members Noyer and Bonnici all saying the EUR has too much strength, the currency held above the psychological level broken yesterday of 1.3800, with yesterday’s session high broken ahead of the US open after 1.3815 was printed. A lack of direction to guide the pair meant EUR/USD traded within a tight range in the second half of the European session, staying close to option expiries (USD 700mln) at the 1.3800 handle. The risk events for the coming days helped the pair little, notably the release of the FOMC minutes later this evening. 

GBP/USD

GBP/USD traded to the upside in the session, however posting a significantly less impressive performance than yesterday, though the previous day’s highs were broken with the pair moving through the 1.6750 level. Trading in a tight range since the open, the release of UK trade data slightly restricted upside, with a drop in imports, -4.7%, leading the move. After the stellar showing yesterday the muted movements of today were unsurprising, especially as participants position for the BoE rate decision tomorrow. 

USD/JPY

The pair staged a modest recovery after breaking below 102.00 handle late yesterday, however as the Nikkei continued to show losses of up to 2%, upside for USD/JPY was limited. The hangover from BoJ’s Kuroda yesterday continues to see 102.00 as resistance but JPY traders remain confident in support at the yearly low of 100.76 and the 200DMA at 100.80. Near term focus shifts to the Chinese trade balance data, expected tonight, at USD 1.8bln surplus from a prior deficit of USD 22bln.