Some Asian sovereign rebalancing demand later lifted the pair back

City Index February 8, 2011 10:03 PM

<p>  EUR/USD Range: 1.3573 – 1.3647 Support: 1.3500 Resistance: 1.3678 Some Asian sovereign rebalancing demand later lifted the pair back through $1.3600  tripping some stops […]</p>

 

EURUSD
EUR/USD
Range: 1.3573 – 1.3647
Support: 1.3500
Resistance: 1.3678
Some Asian sovereign rebalancing demand later lifted the pair back through $1.3600  tripping some stops through the level but pausing at $1.3615/20 before getting another leg higher to $1.3636, with Middle Eastern demand reported in the move. Further demand now being seen as Europe opens for business as the pair rallies to a $1.3646 high, but enters a resistance zone $1.3645/50 with further offers expected towards Friday’s high of $1.3678. Chinese markets re open tomorrow which should help liquidity in the Far East, and traders will be keeping an eye on developments in Egypt as the Muslim brotherhood threatens to walk away from talks with the government, which could impact on the euro again. On the data front another fairly quiet day ahead but French trade data at 0745GMT and German Industrial output at 1100GMT are likely to attract attention.
GBPUSD
GBP/USD
Range: 1.6112 – 1.6159
Support: 1.6080
Resistance: 1.6185
Closed in NY at $1.6110 and edged higher in Asia this morning on the back of the improved BRC data showing a bounce in the UK retail sales, together with a less widespread decline in housing prices in the RICS data. Cable rallied to $1.6160 ahead of the European opening partly assisted by the euro-dollar. Support seen $1.6090/00 with stops set on a break of $1.6080, $1.6045 and $1.6030. Some talk of hedge fund offers now layered from $1.6160 to $1.6175 with near term technical resistance up at $1.6185. Main focus remains on the MPC decision on Thursday with no 100% guarantee now that rates will remain on hold.
AUDUSD
AUD/USD
Range: 1.0118 – 1.0180
Support: 1.0050
Resistance: 1.0180

Aussie, along with Gold had a quiet Monday. Today’s open in Asia at $1.0135 saw early slippage as stocks eased sending the pair to a $1.0117 low where strong demand surfaced ahead of additional option related interest placed at $1.0110/00. Stops are placed below, and exporter demand resurfaces towards $1.0050. Aussie then bounced back up to opening levels assisted by a euro-dollar rally back through $1.3600 and further gains were later seen to $1.0172, but offers said to start from here towards $1.0200 are now likely to slow the rally for the time being with major focus on Thursday’s employment data and Friday’s testimony from the Reserve Bank.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (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.