MORNING FX
BRIEFING
The dollar saw a subdued start to the new week in Asia, with light flows seen ahead of the US holiday weekend. Dollar-yen was trading around Y91.00, modestly higher from Friday's close and near the top of the session trading range. Dealers said early demand for yen crosses lifted the pair to the high but that fizzled out when Japanese stocks sank into the red, and caused risk appetite to wilt. Euro-dollar was knocked to early lows of $1.4335 (NY low $1.4336) as market reacted to an Ambrose Evans-Pritchard article in the Telegraph suggesting the ECB has begun to look at the legal ramifications if Greece were to leave the EU.

Rate quickly recovered back to opening levels around $1.4370/75 with trading conditions reported to be thin due to this afternoon's US holiday. Traders also noted a decent Chf1.0290 offer in dollar-Swiss aiding euro-dollar support. Sterling made decent gains overnight, boosted by positive M&A (France GDF/UK International Power) and better than expected RightMove house data, with euro-sterling trading back under its 200 day m/a. Very light data calendar today and US holiday.

EURO
Euro-dollar opened Asia around $1.4370, getting an early lift to $1.4374 before coming under pressure as market reacted to an Ambrose Evans-Pritchard article in the Telegraph suggesting that the ECB had begun to look at the legal ramifications if Greece were to leave the EU. Thin conditions (US holiday) allowed light early flows to press the rate down to $1.4335 (NY low $1.4336), with buyers placed around that NY low providing support. Initial recovery to $1.4350 picked up further sell interest from momentum and CTA accounts, with added sales of euro-sterling, allowing rate to retest lows before meeting stronger demand interest.

Rate recovered through its opening levels, extending to $1.4388 in Asia, $1.4395 into early Europe ($1.4398 NY high). Rate currently trades around $1.4385. Offers remain in place toward $1.4400, a break here to open a move toward $1.4430 ahead of $1.4445/50. Support remains at $1.4335/30, more toward $1.4300. Traders highlight the 200 day m/a at $1.4288 (some have this at $1.4275) as key support, with further demand interest seen placed behind at $1.4260/50 and $1.4220.


RES 4: $1.4790 61.8% retracement of December decline
RES 3: $1.4669/81 Former bear-flag base, 100, 55-DMA, 50% of Dec decline
RES 2: $1.4572/80 38.2% retracement of Dec decline, High 13 Jan
RES 1: $1.4447/50 Low 14 Jan, 5-day moving average

CURRENT LEVEL: $1.4382

SUP 1: $1.4339 76.4% retracement of 8 Jan recovery
SUP 2: $1.4287 200-Day moving average, Support line from 22 Dec
SUP 3: $1.4218 Low 22 Dec
SUP 4: $1.4118 38.2% retracement of March/Dec rally

YEN
Early euro-yen sales were prompted as the single European currency reacted to a negative article on Greece in the Telegraph, led cross yen and dollar-yen lower in initial trade, dollar-yen touching a low of Y90.70, while euro-yen triggered stops under Friday's low at Y130.30 to touch Y130.10. Weak Asian equities also added to the early negative tone. As equity markets steadied so euro-yen recovered. moving back up in tandem with euro-dollar to Y130.94 before meeting decent sell interest placed ahead of Y131.00. Rate dropped back to Y130.50 before picking up fresh demand interest into early Europe to edge it back toward the recent highs.

Dollar-yen recovered to Y91.07, holding around Y91.00 into early Europe. Euro-yen offers remain around Y131.00, a break above to open a move toward Y131.25/35 ahead of Y131.70/80. Support Y130.10/00, stops through Y129.90. Dollar-yen offers Y91.10/20, more between Y91.35/55. Support Y90.70/50 ahead of Y90.35/15. Equities continue to be seen as the main driver with attention also on JAL's expected bankruptcy and DPJ political concerns.


RES 4: Y94.22 50% projection of 26Nov/4Dec rally from 5 Jan
RES 3: Y93.78 High 7 Jan
RES 2: Y93.20 200-day moving average
RES 1: Y91.90/20 21-day moving average, Tenkan line of Ichimoku cloud

CURRENT LEVEL: Y90.85

SUP 1: Y90.60 Low 15 Jan
SUP 2: Y90.36 38.2% retracement, 100-DMA
SUP 3: Y90.00 55-day moving average
SUP 4: Y89.30 50% retracement of the 'December' rally

CABLE
Opened Asia around $1.6270 and eased to session lows of $1.6235 as rate tracked early pressured sales of euro-dollar. Cable recovered as euro-sterling broke under its 200 day m/a at stg0.8845, strong sales of the cross taking this rate down to stg0.8803 in Asia and allowing cable to rally to $1.6320. The cross rallied back to stg0.8830, as cable dropped back to $1.6275/70, but sterling again picked up fresh demand to take cable back to retest $1.6320 in early Europe (extending highs to $1.6335), while the cross sat back heavily on stg0.8800.

Sterling demand overnight seen from system accounts, with further sterling positive M&A flows (France GDF Suez making a stg5bln approach for UK International Power) also prompted. UK RightMove release of stronger than expected housing data also aided the pound's buoyancy overnight. Cable offers reported in place at $1.6345 (Europe high Friday), with further interest noted close behind between $1.6355/65. Support seen at $1.6300 ahead of $1.6280. Euro-sterling demand remains ahead of stg0.8800, with stops reported on a break below.


RES 4: $1.6479 61.8% retracement of the decline from 16 Nov
RES 3: $1.6410 High 16 Dec
RES 2: $1.6398 61.8% retracement of December decline
RES 1: $1.6356/81 Fibonacci levels, 55-day moving average

CURRENT LEVEL: $1.6314

SUP 1: $1.6211 Low 15 Jan
SUP 2: $1.6193 Highs 11 & 12 Jan
SUP 3: $1.6085 21-day moving average
SUP 4: $1.5896 Low 7 Jan

MORNING FX
BRIEFING
The dollar marked scant gains against the yen Weds. Dollar-yen fell to a 3-week low of Y90.73 in the U.S. session but started this morning with a slight uptick, trading around Y91.00 as the Asia-Pacific session got under way. The pair then marked a high of Y91.36 as the dollar's rebound continued and as risk appetite continued to worsen, with reaction to hawkish Fed comments from Plosser and Fisher aiding.

But the gains didn't last as yen crosses resumed their declines, with euro-yen briefly hitting a Y132.25 high before quickly withdrawing to Y131.51. Late on, dollar-yen was back down at where it had started the day, around Y91.00/05 while euro-yen was also near its opening levels, around Y131.80. Euro-dollar also failed to extend an initial rise as concerns about Greece's debt repayment problems continued to dog the eurozone currency. The pair pulled back from a high just shy of $1.4500 to hit $1.4456 in midmorning trade, despite the dollar's decline. The recovered to trade around $1.4485. Meanwhile, sterling was buoyed by comments from the Bank of England's Sentance as well as positive M&A flows.

EURO
Euro-dollar opened Asia around $1.4490 and began to ease as euro-yen was pressured lower after the Tokyo fix. Dollar demand was also given an added early boost as markets reacted to hawkish comments from Fed's Plosser and Fisher. Rate pressed down before meeting decent demand that restricted losses to $1.4456. Rate then recovered, with traders noting Asian sovereign demand interest in the move (two waves mentioned) with rate edging back to challenge the $1.4500 area into early Europe. Continued demand into this session took rate on to $1.4516, currently trading around $1.4507.

Rate continues to be seen within a basic $1.4450/1.4550 range with stops said to have been built on a break out on the bottom side, though fresh demand reported to begin from around $1.4440. Greek concerns continue as a counter to upside hopes with rate seen contained by two way cross flows. Resistance noted at $1.4530 ahead of $1.4545/60, with stops noted on a break of $1.4570.


RES 4: $1.4790/10 61.8% retracement and November lows
RES 3: $1.4695 55-day moving average
RES 2: $1.4669/81 Former bear-flag base, 100-DMA, 50% of Dec decline
RES 1: $1.4572 38.2% retracement of Dec decline

CURRENT LEVEL: $1.4488

SUP 1: $1.4450 5-day moving average
SUP 2: $1.4375 21-day moving average
SUP 3: $1.4270/76 200-Day moving average, Support line from 22 Dec
SUP 4: $1.4218 Low 22 Dec

YEN
Dollar-yen lifted off early lows of Y91.09 to Y91.36 as the dollar got an early lift on market reaction to reported hawkish comments from Fed Fisher and Plosser. However, move met willing sellers into the rally, with Asian equity markets trading soft as they took direction from the Shanghai reaction to yesterday's PBOC hike of 0.50% in reserve requirements. Euro-yen tracked the early move, finding demand interest as Japanese traders were attracted in by the lower levels presented after Tuesday's sell off ahead of the fix, the rate edging to a high of Y132.25 from Y131.94 opening level, before it too met sell interest that eased it lower again.

Dollar-yen eased to a session low of Y90.91 (NY low Y90.73) while euro-yen traded off to Y131.51. Dollar-yen again met willing buyers into the dip below Y92.00 with rate able to recover to Y91.25 into early Europe. Euro-yen currently trades around Y132.22, lifted by dollar-yen's recovery as well as euro-dollar extending its recovery back above $1.4500. Dollar-yen bids seen from Y90.90 to Y90.70 with stops below. Resistance toward Y91.80.


RES 4: Y94.22/27 50% proj 26Nov/4Dec rally from 5 Jan, Res line 4 Dec
RES 3: Y93.35/78 200-day moving average, High 7 Jan
RES 2: Y92.30 Tenkan line of the Ichimoku cloud
RES 1: Y91.75/00 21, 5-day moving average

CURRENT LEVEL: Y91.07

SUP 1: Y90.75 Low 12 Jan, High 4 Dec
SUP 2: Y90.36/45 38.2% retracement, 100-DMA and Kijun line &
SUP 3: Y90.00 55-day moving average
SUP 4: Y89.30 50% retracement of the 'December' rally

CABLE
Cable opened into Asian trade at $1.6160 before initially marking early highs at $1.6167 before easing back to $1.6137 on early dollar demand, seen as market reacted to hawkish comments from Fed Plosser and Fisher. Rate bounced again between $1.6167/37 before picking up a fresh bid tone as sterling's recent positive trend moved back into gear. Rate moved back up to retest Tuesday's highs at $1.6195, breaking above ahead of the European open and extending rally into early Europe to $1.6225.

Lot of talk around of euro-sterling LHS (sell) interest to be seen into the 0900GMT fix which has also aided the pounds positive feel. Demand for sterling seen M&A related (possible Vattenfall), with BOE MPC Sentance headline comments (highlighting hawkish element though disregarding dovish counter argument) also providing bullish tone. Key resistance seen between $1.6235/42, with stops noted on a break of $1.6250. A break and clear here to boost technical positive outlook. Support seen back at $1.6205/00 ahead of $1.6180.


RES 4: $1.6365/10 55-day moving average, High 16 Dec
RES 3: $1.6310 100-day moving average
RES 2: $1.6237/42 High 31 Dec, 4 Jan, Bollinger band top
RES 1: $1.6194 Highs 11, 12 Jan

CURRENT LEVEL: $1.6180

SUP 1: $1.6065/90 21, 5-day moving average
SUP 2: $1.5880/96 Current base of daily Bollinger band, Low 7 Jan
SUP 3: $1.5833 Low 30 Dec
SUP 4: $1.5707 Low 13 October

See ya on 2010

Prime4x Blog Contest Winners

MORNING FX
BRIEFING
The dollar traded narrow ranges in Asian trade Wednesday, with the Aussie dollar the main mover as it lost ground following dovish comments from Dep.Governor Battellino (usual hawk) and release of weaker than expected Australian GDP data. The Aussie found support ahead of an option barrier at $0.9000 eventually breaking down to $0.8966. Market awaits the FOMC outcome later in the day, with the result of the take up in the ECB's last 12 mth LTRO in focus for any prompting of SNB intervention. Dollar-yen was last at Y89.48, having traded a Y89.43 to Y89.72 range.

Euro-dollar was contained within $1.4521/48, edging to $1.4560 into early European dealing. The much reported barrier at $1.4500 (end year expiry) survived Tuesday's session with rate basing out at $1.4503. Cable was contained within $1.6240/80, currently holding around $1.6260. Eurozone flash PMI data due for release from 0758GMT through to 0858GMT, along with EMU inflation data at 1000GMT. UK employment data due at 0930GMT. US inflation data due at 1330GMT.

EURO
Euro-dollar opened Asia around $1.4537, off NY session lows of $1.4503 with the much reported option barrier at $1.4500 ($1.45/1.53 dnt structure, expires year end) remaining intact. Rate dropped back to mark session lows at $1.4521 as it tracked the Aussie dollar react fall following dovish comments from Dep.Gov. Battellino.

Rate settled into a $1.4525/45 range for most of the session, with focus turned to today's result in the ECB LTRO with the possible prompting of another round of SNB intervention (buying euros and dollars vs Chf), before marking highs at $1.4548 into early Europe. Demand into the European session lifted the rate on to $1.4560, currently trading around $1.4550. Resistance seen at $1.4570/80 ahead of $1.4595/00. Support remains at $1.4525/20, with stronger interest remaining in place on approach to the mentioned barrier at $1.4500. A break here exposes next strong support at $1.4480, with talk of Asian sovereign demand placed from here and extending toward $1.4460. Large stops noted below $1.4450.


RES 4: $1.5163 76.4% of decline from July 2008 high
RES 3: $1.5144 High 25 Nov
RES 2: $1.4855/70 55, 21-day moving average
RES 1: $1.4620 5-day moving average

CURRENT LEVEL: $1.4536

SUP 1: $1.4500/03 Bollinger band, Low 15 Dec 23.6% of March/Dec rally
SUP 2: $1.4472 First bear-flag level
SUP 3: $1.4447 50% retracement of the June/Dec advance
SUP 4: $1.4282 38.2% retracement of April-Dec & 61.8% of June-Dec rally

YEN
Dollar-yen rallied to Y89.95 in the NY session, closing still buoyed around Y89.60, while euro-yen ended mid-range at Y130.30. Traders noted light activity in the Asian session as the market consolidated ahead of tonight's FOMC minutes, dollar-yen initially easing back to Y89.45 from the early Y89.73 highs, remaining contained into the afternoon session ahead of an extension of the lows down to Y89.39.

Euro-yen followed a similar path, notching early highs at Y130.45 before a quick dip down to the day's lows at Y129.94. Some demand seen at the Tokyo fix, allowing for a bounce back to Y130.30, with the cross holding this level into the European open. Exporter offers still seen into Y90.00 with stops above, ahead of further supply in the Y90.30/35 area.


RES 4: Y92.32 High 27 Oct
RES 3: Y91.31 100-DMA, High 4 Nov, 50% of Aug/Nov decl
RES 2: Y90.75 Ichimoku top, High 4 Dec
RES 1: Y90.30 Base of the Ichimoku cloud

CURRENT LEVEL: Y89.52

SUP 1: Y88.25 21-day moving average
SUP 2: Y87.79 50% retracement of 26 Nov rally, Kijun line
SUP 3: Y87.36 Low 9 Dec
SUP 4: Y87.09 61.8% retracement of 26 Nov rally

CABLE
Opened Asia around $1.6267 and was bought up to mark session highs at $1.6280 in early trade before dropping back as it tracked the react fall in the Aussie dollar following dovish comments from the RBA Dep.Gov. Battellino and weaker than expected Australian GDP data. Cable found support at $1.6240 with rate settling into a $1.6240/50 range for a good part of the session before lifting above $1.6270 ($1.6271 76.4% $1.6280/40) into early European dealing.

Rate was knocked back to $1.6255/50 as early Europe again sold into a late Asian rally, though not as aggressively as has been seen in recent sessions. Rate currently trades around $1.6265. Resistance remains in place between $1.6270/80, a break above $1.6285 to allow for a move on toward $1.6295/00. Support $1.6240, stronger between $1.6205/00 ahead of $1.6195/90. A break here to open a deeper move toward $1.6165/55. UK employment and wage cost data due at 0930GMT.

MORNING FX
BRIEFING
The dollar was again mixed in Asian trade Weds, lower against the euro and little changed against the yen, although off early highs. Euro-dollar fell to a $1.4680 low in NY last night and extended that to $1.4665 in Asia. Euro-dollar bounced back above $1.4700 as short positions were covered. The pair eventually touched a $1.4735 in late morning trade. Dollar-yen rose to a Y88.70 high after the Cabinet Office released its revised GDP estimates for Q3, backing off soon after it hit the high as yen crosses slid on higher risk aversion, eventually hitting a Y88.29 session low, before bouncing modestly.

Cable was under pressure from the start of Asian trade, gapping down 60 pips to $1.6228 and had noticeable trouble tracking euro-dollar's recovery. Fresh selling into Europe has allowed rate to make a brief show under $1.6200. Sterling in focus ahead of today's Pre Budget Report (1230GMT). Ahead of this we have Germany CPI and trade at 0700GMT, France trade at 0745GMT as well as UK trade at 0930GMT. Light calendar again for the US. Risk aversion plays in thin conditions expected to make for volatile conditions.

EURO
Euro-dollar opened Asia around $1.4705 with the early pre Tokyo market taking advantage of thin markets to target stops below the NY low at $1.4680 taking it to an early low of $1.4665. Asian sovereign demand (book balancing mentioned) provided the main recovery drive, the rate recovering to an initial high of $1.4734. Rate consolidated the recovery by holding above $1.4725/20, eventually extending the topside to $1.4736.

Downside pressure returned just ahead of the European open with strong sell pressure taking the rate through $1.4720, pulling back to $1.4692 (61.8% $1.4665/1.4736). Rate currently trades around $1.4695. A break lower and decent support seen in place again toward $1.4680 ($1.4682 76.45) ahead of the overnight low at $1.4665. Further support/demand seen at $1.4650 ahead of stronger area between $1.4625/20 ($1.4626 Nov 3 lows). Resistance seen toward $1.4720 ahead of the overnight high at $1.4736. Above here and the stronger area between $1.4750/60 moves into view.

RES 4: $1.5163 76.4% of decline from July 2008 high
RES 3: $1.5144 High 25 Nov
RES 2: $1.4945 21-day moving average
RES 1: $1.4850/60 5, 55-day moving average

CURRENT LEVEL: $1.4732

SUP 1: $1.4673 Low 8 Dec
SUP 2: $1.4612/25 23.6% of Apr/Dec & 38.2% Jun/Dec advance, 100-DMA
SUP 3: $1.4595 50% retracement of the advance from August 2009
SUP 4: $1.4510 23.6% of March/Dec 2009 rally

YEN
Dollar-yen closed the US session mid-range in the Y88.40 area, with euro-yen ending around Y130.00. The final Q3 GDP growth estimate Wednesday was heavily revised down to +0.3% q/q from the initial estimate of +0.7% q/q. The large revision was caused by the earlier over-estimation of capital spending by corporates. Traders said there was little reaction to the data release, with the early rally coming at the open and led by a Japanese trust bank.

Highs were notched at Y88.70 before a Japanese car company came in to sell euro-yen ahead of Y130.50, knocking the cross back towards Y130.00 and dollar-yen down to Y88.29. Balance of the Asian session was a muted affair, as dollar-yen held a tight range under Y88.50 and euro-yen faltered ahead of Y130.35. Risk sentiment still seen precariously balanced into the European open after a down day for Asian stocks, with euro-yen extending the lows down to Y129.18 at writing. Dollar-yen also on the backfoot as widespread cross-yen sales drive the rate down to Y87.80 at writing.

RES 4: Y92.32 High 27 Oct
RES 3: Y91.55 Top of Ichimoku cloud, 100-day moving average
RES 2: Y91.31 High 4 Nov, 50% retracement of Aug to Nov decline
RES 1: Y90.50/75 Base of Ichimoku cloud, High 4 Dec

CURRENT LEVEL: Y88.34

SUP 1: Y88.05 Kijun line
SUP 2: Y87.79 50% retracement of 26 Nov rally, Tenkan line
SUP 3: Y87.09 61.8% retracement of 26 Nov rally
SUP 4: Y85.89 Minor low 30 Nov

CABLE
Opened Asia around $1.6284 and came under strong sell pressure in the period between the NY close and the Tokyo open, the market taking advantage of the thin conditions to target and trigger stops through $1.6250. Rate dropped to session lows of $1.6224 before picking up demand interest into the dip. Rate recovered, aided by reported Asian sovereign demand, but failed to make a show back above $1.6280.

Rate consolidated for most of the session between $1.6540/75 before fresh selling into early Europe saw rate trade to an initial low of $1.6199. Rate recovered to $1.6220 but move was short lived as a UK clearer executed a sterling-yen sell order which provided the weight to take rate back below the figure and on to lows of $1.6167. Rate has since recovered back above $1.6200 but underlying tone remains negative with focus turning toward UK trade data at 0930GMT, ahead of more important Pre Budget Report (PBR) at 1230GMT. Support from that traded low at $1.6167 with stronger interest close behind at $1.6155/50. Below here and next support between $1.6130/20. Resistance $1.6220 ahead of $1.6250

RES 4: $1.6878/85 High 16 Nov, Top of the Bollinger band
RES 3: $1.6722/47 High 3 Dec, 25 Nov
RES 2: $1.6575 21-day moving average
RES 1: $1.6405 5-day moving average

CURRENT LEVEL: $1.6263

SUP 1: $1.6227/55 Low 8 Dec, Current base of the daily Bollinger band
SUP 2: $1.6155 61.8% retracement of $1.5708 to $1.6878
SUP 3: $1.5905 200-day moving average
SUP 4: $1.5682/07 38.2% of the 2009 range, Low 13 October
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