UBS Spot Desk – Yen Southbound – FXWW Chatroom

EURUSD remains rangebound with no clear direction. Intraday moves are quite volatile due to a lack of liquidity, and this is likely to continue for a while. Stay flexible and keep it tight, getting properly involved only at the extremes.

USDCHF and EURCHF had a very quiet start to the week, remaining in reasonably tight ranges. The pair tested support just below 0.9500, which it has held a few times so far. The 100-day moving average at 0.9600 should provide resistance; go short there. EURCHF remains a sell on rallies to 1.0320 as long as the cross stays below 1.0350.

EURGBP is inching lower and cable trading rangebound to start to the week. The pair broke through resistances at 1.50 and 1.5030 on Friday but ran out of steam just above 1.5050 and headed lower. Buy near 1.4925/30 with stops just below 1.4900, targeting 1.5050.

USDJPY is clearly trending south in the short term, trading out of the daily Ichimoku cloud at 118.94. The yen remained strong overnight despite the PBoC’s RRR cut, which should have normally supported risk. Sell ahead of 119 with stops through the 100-day moving average of 119.31. Next support lies at 118.33, the March 26 reaction low.

AUDUSD traded up to 0.7840 at the open, boosted by PBoC’s RRR cut over the weekend, but soon shed most gains due to lack of follow-through buying in China equities. Fade rallies to 0.7830-50, for 0.7750. NZDUSD was supported on the PBoC cut but could not gain much due to the lack of follow-through buying in China equities. Fade rallies to 0.7740-50, for 0.7650. Support lies at 0.7610 ahead of 0.7650 and resistance at 0.7740 before 0.7790.

Gold remains a buy on dips, targeting at least $1215 early next week. Silver should firmly head toward $16.70 and generally fair better than gold on a move higher.

Platinum is facing resistance but volumes are light. Palladium backed off a few times but is now bid, likely headed for resistance at $785.

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