Rate squeezed lower from its opening high of $1.6346 in Asia

<p>GBP/USD Range: 1.6281 – 1.6343 Support: 1.6250 Resistance: 1.6400 Rate squeezed lower from its opening high of $1.6346 in Asia, the move lower led by […]</p>

Range: 1.6281 – 1.6343
Support: 1.6250
Resistance: 1.6400
Rate squeezed lower from its opening high of $1.6346 in Asia, the move lower led by yen crosses as market moved into risk aversion mode. Sterling-yen traded sharply down from Y138.60 to Y136.00, taking cable to session lows of $1.6280 with recovery efforts so far remaining very shallow, cable currently trading around $1.6290, while sterling-yen trades at Y136.70. Focus turns to UK inflation data at 0830GMT with most expecting headline y/y inflation to come in at 4.4%. Traders note that cable often gets a pre release push higher but usually gives back gains after release, whether it comes in stronger than expected or not (a few traders suggesting the best vehicle to trade is sterling-yen as seen as most reactive).
Range: 1.4376 – 1.4441
Support: 1.4330
Resistance: 1.4500
Rate initially edged back to mark session highs in Asia at $1.44416 before stalling with market reversing tack to a risk off tone as the situation at the Fukushima plant was moved up to a 7 severity level, the highest on the scale and same as Cherbonyl. This move to risk aversion pressured euro lower via cross sales, euro-yen dropping back from Y122.41 to Y120.16, while euro-Swiss broke down from Chf1.3096 to Chf1.2970. These sales took euro-dollar through the NY base with triggered stops below $1.4420 providing the added momentum to take rate below $1.4400 to $1.43761. Bounce back in the crosses allowed rate to recover to $1.4405/10, with rate currently pivoting $1.4400 into early Europe (release of as expected German CPI having little effect). Asian currencies weakened on profit take sales overnight with no Asian central bank interventions recorded in the moves.
Precious Metals


Gold and silver prices surged to new highs, supported by safe-haven demand, before a drop in risk demand and an easing in oil prices helped undermine bullion prices. The slide in oil prices may have been prompted by talks between the two sides in the Libyan civil war. Gold losses were limited as Fed officials cautioned against an abrupt change in monetary policy. Silver prices moved to near USD42/oz before shedding the bulk of gains by the end of the trading session. Interesting to us, the German government is reviewing its program for issuing silver coins in light of the high prices, according to the Finance Ministry.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.