FX Flows

From the FXWW Chatroom: Bit cautious as Asia walks in – UST yields down, stocks down, should we sell UsdJpy? To be honest, it was an unusually start. No early bird – UsdJpy, which closed at 108.42 in New York didn’t go much lower unlike other days. Usd crept higher slowly towards 108.60’s. Most of the buying came from Tokyo names. Intraday resistance at 108.65 then at 108.86, the 200-Day SMA. Nikkei was negative at open, then recovered to flat. 10-year UST yield was up 1bp at the Tokyo open.

There is an article in Nikkei, where it said one of the two new BOJ board members, economist Kataoka is noted for favoring monetary easing to stoke inflation.

EurUsd drifted lower from 1.0735 high. Small recovery in yields helped little and there is also some unconfirmed talk of offers near 1.0750, linked to strategic macro positioning ahead of this weekend’s France elections. There are some small option strikes maturing today from 1.0750 to 1.0800.

Again, disconnect between Canadian dollar, commodity currencies and oil futures. UsdCad climbed towards 1.3400, some talk of unwinding of Cad-crosses (GbpCad and AudCad). Sell orders are mild, stops above 1.3415.

Iron ore futures continued to slip for third consecutive day this week, putting some pressure on AudUsd. New York closed at 0.7560, the pair lowered to 0.7529. Another cause for lower AudUsd was linked to AudNzd. Some strategic accounts are positioning ahead of tomorrow’s New Zealand Q1 CPI which is expected to be higher. AudUsd printed 0.7525 low – next support is 0.7523, the 100-Day SMA.

Shocking Cable. Although we did drift lower from open, some guys are still trying to cut short Gbp-cross positions, very painfully. Some chatter of renewed sellers at 1.2880.

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