- WSJ report that CIT have reached a tentative agreement to avoid bankruptcy.
- Japan on holidays but trader’s appetite for risk increases on the back of the CIT news.
- UK house price data showing falls bottoming out.
- NZ June Servises Sector Index falls 1.2 points to 45.
- Australia Q2 PPI -0.8%, worse than expected.
- UK Telegraph reports German propert giant, Hypo Real-Estate, may need 10 bio EURin fresh capital to stay afloat.
- Talk of Asian Bank still defending option barrier at 1.4200.
- Gold higher at 940.
- Morgan Stanley upgraded Kospi target to 1650 from 1340.
Very strong start to a Monday morning with the news that CIT may have avoided banruptcy. The news seemed to have increased trader’s risk appetite on a day where volumes were light due to Japanese holiday.
JPY cosses were in demand, with EURJPY moving thru the 133.50 level with ease, triggering stops in the process for a good strong run above 134.00. EURUSD followed with no sign of sovereign names selling at 1.4150. However, with the talk of an Asian Central bank defending 1.4200, saw the move up, limited to 1.4180. USDJPY also saw a good run up on the back of the cross buying taking out the technical resistance at 94.45 before finding some resistance at 94.70 from Japanese sell orders that have been left with locals.
AUDJPY demand was high today. Stops were taken out above 76.00 early morning as AUDUSD traded in one direction, straight up. Not even worse than expected PPI number could make an impact. AUDUSD remained above 8050 for the remainder of the day. Next level on top 8100-25, where strong selling is noted.
Ranges:
EURUSD 1.4095 – 1.4180
GBPUSD 1.6317 – 1.6413
USDJPY 94.14 – 94.68
EURJPY 132.75 – 134.19
AUDUSD 8000 – 8084
Goodluck,
Sam
