Markets chose to be 8216 risk on 8217 once again

Markets chose to be ‘risk on’ once again due to recent positioning concerns, as investors acknowledge that a general soft landing globally may be avoided. Broad-based upbeat manufacturing readings around the globe reaffirmed the conviction that concerns over a global economic slowdown may be overdone.

 
EUR/USD

Range: 1.3273-1.3334
Support: 1.3225
Resistance: 1.3350
The single currency remains under pressure, breaking through its 100-day moving average at 1.3290 in early European trading. The view is that the latest LTRO will lead to increased use of the euro as a cheap currency for carry trades with commodity based currencies seen as having the largest rewards. With a lack of data released today, the market will be looking for any headlines from the second day of the EU summit.

GBP/USD
Range: 1.5918 – 1.5967
Support: 1.5850
Resistance: 1.6000
Sterling continues to trade constructively as technical support holds despite broader dollar strength. The 200-day moving average at 1.5900 is still sighted as good support as EUR/GBP continues its decline from 0.8500 with barriers in cable seen at 1.6000 and the level to break for a move to 1.6150.

USD/JPY
Range: 81.09-81.60
Support: 80.00
Resistance: 82.00
The yen was the main mover again overnight as we attempt to challenge the highs seen at the beginning of the week at 81.65.The Tokyo fix saw solid demand today as we slowly grinded through the 81.50 level with the market also speculating that a EUR/JPY flow was in the market as reports suggested that Japanese brewer Asahi is to acquire European group Starbev.