Nikkei leads risk off in Asia

<p>The FX markets are trading with a risk off theme as European traders arrive at their desks on Friday. The Nikkei is trading 2.3% lower […]</p>

The FX markets are trading with a risk off theme as European traders arrive at their desks on Friday. The Nikkei is trading 2.3% lower into the close, with the dollar index breaking the February low and testing the technical support level seen at 79.05.

There seems to be no clear signal for the risk off sentiment although liquidity conditions in China still seem to be making the market nervous despite rumours that the PBOC have indicated that they are prepared to resume money market operations if rates increase further. Although I suspect that this measure will be a last resort as they will not want to be seen fuelling credit growth.

In other news RBNZ’s Wheeler added to finance minister’s William English’s concerns over the NZD saying that higher interest rates will push the NZD even higher, hurting exporters. he added that intervention was an option if needed but resources were limited.

There is talk this morning that large diversification flows are pushing the proud pound and euro higher as today’s data focus is likely to be the German IFO survey and the Q3 GDP reading from the UK. The US session brings us the volatile durable goods data reading.

 


EUR/USD

Supports 1.3770-1.3740-1.3680 | Resistance 1.3840-1.3910-1.4000

 


USD/JPY

Supports 96.80-96.30-95.80 | Resistance 97.50-97.95-98.30

 


GBP/USD

Supports 1.6180-1.6115-1.6060  | Resistance 1.6250-1.6300-1.6380

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