Moody s downgrades six German bank groups

Moody’s downgrades six German bank groups. Moody’s has takes multiple actions on German banks’ ratings; most outlooks now stable. Moody’s German bank action means long-term debt and deposit ratings for six groups and one German subsidiary of foreign group have declined one notch. Moodys’ rationale for German bank downgrade: “driven by the increased risk of further shocks emanating from the euro area debt crisis.”

 
EUR/USD
Range: 1.2455 – 1.2516
Support: 1.2421
Resistance: 1.2520

Euro-dollar closed in NY at 1.2452, the rate recovering off a late pullback low of 1.2425 in line with US equities. A continuation of this recovery faltered as Moody’s announced a downgrading of Austrian banks, then six German banks on both announcements rate dipped to 1.2440, meeting decent demand interest at this level before pushing higher. Release of stronger than expected Australian GDP data provided a boost to risk, though sales of euro-aussie provided a partial counter as euro-dollar was pulled higher by the rally in aussie-dollar. Once the euro-aussie sales faded the rate was able to move through 1.2500, despite supply seen from two Asian sovereign names, cited for the move above 1.2510 as the rate extended recovery to 1.2516. The rate held above 1.2500 into early Europe. Offers now seen from 1.2520 through to 1.2550 with stops above.

GBP/USD
Range: 1.5377 – 1.5438
Support: 1.5380
Resistance: 1.5440

Cable closed in NY at 1.5385, just off late recovery highs of 1.5388 with move up aided by euro-sterling extending its corrective pullback off earlier highs of 0.81405 to 0.8089. Cable initially dipped back to 1.5375 before edging higher, the recovery led initially by euro-dollar. The move up was given a lift, as risk in general was boosted by the release of stronger than forecast Australian GDP data, cable pushed to a high of 1.5433. Euro-sterling was taken back above 0.8100 in Asia, the rate correcting from 0.8091 to 0.81095. Cable offers seen placed from 1.5433 to 1.5440, more into 1.5450 with stops above. Stronger offers noted into 1.5465, a break to expose 1.5525. Support 1.5380-1.5370. Euro-sterling offers 0.8115-0.8120, support 0.8090-0.8080.
USD/JPY
Range: 78.61 – 78.95
Support: 76.50
Resistance: 79.00

Dollar-yen closed in NY at 78.75 having been shoved to a recovery high of 78.97 as market reacted to FinMin Azumi’s post teleconference comments suggesting he had been given the go ahead to counter ‘extreme FX moves’. The rate corrected back to 78.56 before settling between 78.70-78.80 into the close. The rate initially marked overnight lows at 78.60 into Asia, reacting to a generally softer dollar, but rate quickly picked up fresh demand that returned rate toward Tuesday’s high, topping out at 97.95 before settling back on 78.80. Offers remain on approach to 79.00 with bids seen between 78.60-78.50. Suggested 77.50 is now key level to any triggered intervention.