USD/JPY: The pair settled lower this week

EUR/USD

The release of better than expected macro economic data from Germany, as well as decent demand for the latest debt offering by the Spanish Treasury failed to prop up the pair as market participants continued to pare longs and turned more bullish on the USD. The surge by the USD index, which gained around 1% this week was partly driven by the release of the latest FOMC minutes, which showed that several on FOMC said the Fed should be prepared to vary pace of QE. In terms of technical levels, supports are seen at the 100DMA line at 1.3121, 1.3039 which is the Jan-10th low and then at 1.3018 which is the Jan-7th low. On the other hand, resistance levels are seen at the 55DMA line at 1.3289, the 10DMA line at 1.3343 and then at the 21DMA line at 1.3429.

GBP/USD

GBP underperformed its peers throughout the week after the release of the most recent BoE meeting minutes revealed that 3 MPC voted for more QE. The MPC also considered cutting bank rate, buying other assets and changing remuneration of banks' reserves. The pair fell almost 100 pips shortly following the release of the statement by the BoE, which in turn supported the USD index. In terms of macro data, the Office for National Statistics (ONS) said that employment rose by 154,000 to 29.73m in the three months to December, the fastest rise since last summer. The rise was driven by full-time employment, up 197,000 on the previous quarter and 394,000 over the year, the largest annual increase since 2005. However the growth in employment came at the expense of earnings. Average earnings, excluding bonuses, rose by 1.3% Y/Y, the lowest rate for two-and-a-half years. In terms of technical levels, supports are seen at 1.5236 which is the 21DMA lower Bollinger level, followed by the Feb-21st low at 1.5130 and then at 1.5125 which is the July-21st2010 low. On the other hand, resistance levels are seen at 1.5544/50 and then at the 21DMA line at 1.5606.

USD/JPY

The pair settled lower this week, as market participants booked profits and as risk averse flows dominated following the release of the most recent FOMC policy meeting minutes. In terms of Japan specific commentary, it was reported that Japan's main opposition DPJ would not automatically reject former top financial bureaucrat Muto as the next BoJ governor if his name is proposed according to those familiar with the matter. Separately, Japanese Finance Minister Aso said there are no plans to buy foreign bonds with PM Abe saying that the need for government-private fund to buy foreign bonds has lessened. Aso also said that the talk of currency wars is going too far and the JPY weakened without intervention. In terms of technical levels, supports are seen at 92.77/22 and then at 92.17 which is the Feb-8th low. On the other hand, resistance levels are seen at 93.87, 94.05 which is the Feb-20th high and then at 94.22 which is the Feb-18th high.