We are not challenging any of these levels at the moment but they are worth noting for later on tonight.
- AUD/USD: Well chronicled barrier protection at 1.0000 with stops directly above; more barriers seen at 1.0050; stop-loss sell orders below .9870
- EUR/JPY: Heavy stops below 113.80
- EUR/GBP: Rumours that significant selling flows are expected during the London session but no confirmation
- USD/JPY: Corporate selling interest 82.50 through 83.00
- EUR/USD: Stops building below 1.4000; first reports of significant bids around 1.3920
The Asian trading session has gone into sleep mode and nothing is moving.
The Chinese MOFCOM are still on the newswires, telling Japan that it has no right to be commenting on the Chinese trade balance. It has also re-stated that even a 3% rise in the CNY would place a lot of pressure on Chinese exporters. This is posturing because as we know the Chinese domestic market has grown immensely in the last 18 months as have Chinese exports to other Asian nations, so China is no longer overly reliant on exports to the US.
- Yuan should not be scapegoat for US domestic issues
- Countries should not be commenting on other countries trade balances
- China is responsible and will push ahead with its own exchange rate reform based on its own domestic conditions
(Across Reuters newswires)
Dealers say that there has been some moderate EUR/JPY selling in the last couple of hours and that there are relatively heavy stops below 113.80.
Foreign investment continues to flow into China.
Nikkei -0.8%, Sydney -0.5%, Seoul and Shanghai flat. Gold steady at $1380/oz.
The Chinese may be trying to curry a bit of favour before tonights currency report. They have fixed the Yuan at a new record high of 6.6497 against the USD.
Elsewhere the USD is giving back some of its earlier gains against the majors and I suspect that we’ve already seen the range extremes for this session.
The momentum seems to be waning and I don’t think we are going to see the same volatility that we saw yesterday. Jananese MoF and BoJ officials continue to fill up the newswires with lots of comments but until they actually do something their credibility will continue to suffer.
On the order front, talk of stops below .9870 in the AUD/USD which might come in for some attention.
The USD continues to make some early gains in Asia with the AUD/USD now back below .9900
Someone pass a pinch of salt please.
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