EUR/JPY makes fresh five-year high

<p>The FX markets kicked off after the US Thanksgiving holiday with a broadly stronger than expected CPI reading from Japan that came in at +0.9% […]</p>

The FX markets kicked off after the US Thanksgiving holiday with a broadly stronger than expected CPI reading from Japan that came in at +0.9% year-on-year. This, along with some month end rebalancing flow, took EUR/JPY to 139.73 – its highest level since October 2008.

AUD initially made fresh multi-month lows on a statement released by Australian treasurer Joe Hockey that the Australian government has rejected a proposal for ADM’s proposed AUD3.4 billion takeover of Graincorp sighting national interest.

Today’s focus will certainly be on the eurozone inflation report for November, which is expected to rise 0.1% to 0.8% year on year. Last month’s dismal reading has prompted the ECB to surprise the markets with a rate cut which has been followed with discussions about the possibility of a negative rate scenario within the EU as the ECB continues with the mantra of ‘will do whatever it takes’ taken from Mario Draghi on June last year.

I expect month end rebalancing and positioning adjustments to be the main driver in the FX market space this afternoon, especially as liquidity will be at a premium with most of the US market taking advantage of a long weekend following the Thanksgiving celebration.

 

EUR/USD

Supports 1.3580-1.3500-1.3425 | Resistance 1.3630-1.3685-1.3710

 



USD/JPY

Supports 101.60-100.15-100.80 | Resistance 102.80-103.00-103.75

 



GBP/USD

Supports 1.6260-1.6220-1.6140 | Resistance 1.6380-1.6450-1.6500

 

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