- China and Australian holidays lead to another quiet session
- Stop-loss hunts in early interbank trade see EUR/GBP gap 50 pips higher then retrace
- Regional stockmarkets +1%, at 2-year highs
- France and China reportedly in on-going FX talks
- Japan’s August wage growth flat
- Irish pensions may help government
If there were any option-related stops above 1.3800 in EUR/USD then they were small ones as the market traded to a high of 1.3807 in early interbank trade but then quickly slipped back. Most of the buying was cross-related as firstly EUR/JPY broke above a technical resistance level and then there was an unseemly stop-loss hunt in EUR/GBP. Ranges: EUR/USD 1.3747/1.3807, EUR/CHF 1.3422/65
EUR/GBP closed in NY at .8700 but gapped to a high of .8755 in early interbank and there will undoubtedly be questions asked as to who did what to whom! Cable fell to 1.5775 as the cross action took place but of course everything returned to normal once the evil deed was done. Ranges: Cable 1.5775/1.5826, EUR/GBP .8700/55
EUR/JPY firstly broke above technical resistance at 114.75 and then above option barriers at 115.00 after a USD/JPY buying flow went through the market and briefly raised questions about possible BOJ action (not this time). Ranges: USD/JPY 83.25/86, EUR/JPY 114.63/115.28
The AUD/USD was quiet with a public holiday in Sydney ensuring many players were not in the market. Most are awaiting the RBA’s rate decision tomorrow so the AUD was fairly quiet consolidating below important resistance. Range: .9692/.9727
Markets: Nikkei +0.8%, HK +1.2%, Kospi +0.6%. Gold $1317/oz.
