US yields dominate as we await speech by Fed members this week
City Index March 19, 2012 12:00 PM
<p>EUR/USD Range: 1.3160-1.3188 Support: 1.3100 Resistance: 1.3300 A quiet start to the week with the latest IMM data showing the net short positions were cut […]</p>
A quiet start to the week with the latest IMM data showing the net short positions were cut last week from 116,473 contracts to 99,336. The market still continues to trade in a range with speculation of a 1.3000-1.3300 DNT keeping activity light. Fed speakers will dominate US yields this week and the USDs proceedings with the only distraction from Europe coming in the form of eurozone PMIs on Thursday.
Range: 1.5829 – 1.5850
Sterling continues to hold better levels against most G10 currencies, with a strong close to last week in GBP/JPY which technically ends a four-year downtrend with targets now of 140.00. A close today in cable above the 200-day moving average at 1.5860 is seen as a bullish signal as we await a busy data and event week for the UK. This week sees the release of the CPI data followed by the MPC minutes and the Chancellor’s budget on Wednesday.
The JPY continued to trade with a softer tone with volume reported to be light ahead of the Japanese holiday tomorrow. The key release from Japan this week will be the trade balance numbers on Thursday as repatriation flows loom as we move closer to the end of the Japanese financial year. I expect the market will closely watch the Fed speakers this week with Dudley speaking today and Bernanke and Kocherlakota due up tomorrow.