There has been no major change to any currency in the last 24 hours, with the market firstly targeting stop-loss orders in EUR/JPY before running into solid buying interest. I’d expect more of the same today and much of the interest in Asia will also revolve around the AUD/USD and what happens near 1.0510; with sell orders reportedly very solid but large stops immediately above. Japanese retail sales data is the only highlight on this morning’s economic calendar.
EUR/JPY should once again be the main intraday game and the first topside level to watch will be around 106.20, which was yesterday’s breakdown level (see chart). The market is undoubtedly still short of JPY and there is as yet no sign of any panic buying, but the closer we get to the December 16th election date, the more likely a big Yen-buyback becomes. Mild bullish bias intraday in line with the medium-term trend but it will probably stay fairly quiet unless we get some significant flows in early Tokyo trade.
USD/JPY remains fairly steady near 82.00 but with plenty of orders reported near 81.50, this level could prove magnetic. There are sovereign and macro-fund bids reported 81.40/50 but plentiful stops near the same level. I’d suggest 81.70/82.20 should cover most eventualities in Asian trade.
EUR/USD was driven completely by EUR/JPY flows yesterday and we are now back at the same level as yesterday. Any rallies towards 1.3000 will surely run into grateful sellers and dips onto the 1.28 handle are being met by short-covering bids. As usual, it’s a matter of finding the range in EUR/USD; 1.2945 is the initial resistance level and support should start 1.2910/15 (see chart).
AUD/USD could be the most interesting pair today, with plenty of sell orders reported near 1.0510 but large stops also reported at 1.0525. This looks like it could be developing into a pivot-point fight. I’m happy to stick with short trade and sell into strength ahead of the RBA next week, but care is certainly warranted.
Cable bounced out of buy orders at 1.5965/70 and the NZD/USD inverted H&S is still relevant despite the marginal neckline break (see chart).
Good luck today.