EUR/USD was underpinned by ACBs buying just above 1.2950 and sentiment got quite bullish at times for the single currency, with EUR/JPY leading the way and all crosses (with exception of EUR/CHF) making solid gains. What this market does lack is momentum and confidence, and everyone seems to be trading with tight trailing stops, which again led to a sharp reversal back to where we started yesterday in most pairs.
EUR/GBP disappointed the bulls with no obvious signs large central bank buying (which usually happens at the end of the month). The basing pattern which we’ve been tracking on the short-term charts (see chart) is now threatened and the pair really needs to stay above .8030 or the technical picture will change.
USD/JPY has been quietly bid since the volatility after the BOJ and bulls will be keen to try and establish this pair back above 80.00, at least for psychological reasons. The data on foreign investment on bonds and stocks will be released later this morning and whilst it won’t move the market, it’s worth studying for any recent trends.
EUR/JPY is consolidating above previous short-term highs around 103.20 and I believe that we will see a test of important technical resistance at 104.80 (see chart) in coming sessions.
The AUD was the only mover yesterday during Asian trade and we open again at familiar levels. Heavy sell orders are holding the line at 1.0400 but there are undoubtedly stops building above 1.0410/15. Further range trading is highly likely ahead of next week’s RBA meeting.
Good luck today.
