Daily Forex Overview

Previous session overview

The euro fell against the dollar and yen in Asia Thursday as news that Greece may seek help from the International Monetary Fund caused currency players to offload the single currency.

Earlier in Asian trading, falling Tokyo stock prices caused foreign hedge funds, Japanese institutional investors and interbank dealers to sell the euro, traders said.

But the pace of the selling accelerated as news broke that Greek may seek financial help from the International Monetary Fund over the April 2-4 Easter weekend due to little hope for aid from the European Union.

EURUSD opened Asia at USD1.3735 and initially edged to session highs at USD1.3741 on early demand for euro-yen. Japanese supply into the fix reversed this early move with stops triggered on the break below USD1.3720 (USD1.3727 Wednesday low), the rate then meeting support at USD1.3710. Stronger selling was then prompted as market reacted to DJ report that Greece could ask for IMF aid on weekend of April 2-4, as well as reported comments from a 'Greek official' suggesting that the rift with Germany over the debt crisis was deepening and that Greece not hopeful of aid from the Mar 25 EU Summit. Rate dropped to USD1.3667 before meeting willing buyers into the dip. Rate has slowly recovered into early European dealing.

Pound opened Asia around USD1.5320, initially edging up to post session highs at USD1.5324 before settling between USD1.5310/20 ahead of the Tokyo fix. Cross yen supply through the fix provided the main weight to take rate through support at USD1.5305/00 and on to an initial low at USD1.5289. Rate recovered, bounced between USD1.5297/1.5312 before getting shoved lower again as rate tracked euro-dollar slippage, as this latter rate reacted to negative comments from a Greek official. Cable dropped to a low of USD1.5271.

The Australian dollar closed higher Thursday but it pulled back from its session highs on a report Greece may seek aid from the International Monetary Fund over the April 2-4 Easter weekend.

Market expectation

Dealers said the downward pressure on the dollar will continue for now because many players had bought the euro on views that Greece's fiscal problems would be solved without the need for stringent fiscal and monetary policy measures.

Dealers said the European unit could keep falling to USD1.3600 and JPY122.50 later in the global day.

Cable recovered to USD1.5315, currently trading around USD1.5305. Support now reported in place between USD1.5275/65, more toward USD1.5250. Resistance seen placed at USD1.5325/35 ahead of USD1.5350/55 and stronger interest at USD1.5380/85.

For EURUSD support seen around that mentioned low, a break to expose a stronger support area which begins from around USD1.3655, strengthening toward USD1.3640 with stops below. A break here may open a deeper move toward USD1.3625/20. Asian traders suggest that stops have been building on the downside and therefore see it as the weaker side. Resistance seen placed at USD1.3695/00, more at USD1.3715/25.

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