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>

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.

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.

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.

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