Previous session overview
EURUSD has ended the month of August at high levels above 1.4330. This morning in Asia the Euro remained bid, climbing up to 1.4370 before the European open. This year’s high seen in July is not far away at 1.4440.
Cable, which has underperformed in late August has also gained in the Asian session this morning, rising up to 1.6373 from the day’s opening level at 1.6280. With the rally the pair has breached a 3-week bearish trend-line.
USDJPY had closed the month of August on a low note at 92.80 – losing more than 4 Yen over the course of the past 2 weeks. This morning the Dollar held its ground and rose to 93.30. GBPJPY and EURJPY both faired very strongly rising more than 100 pips each: EURJPY opened the day at 133.10 and climbed to 134.15 while GBPJPY opened at 151.20 to rise as high as 152.72.
The Dollar suffered from the strong performance of the Dow on Monday and market watchers expect this trend to continue into the early parts of September. With this the Euro is likely to rise in search of the July 1.4440 top over the course of the next few trading days.
With Cable breeching the 3-week bearish trend-line from the August spike above 1.70 there is lots of space for a correction up. 1.6360 is first strong resistance, Fibonacci retracement levels lie at 1.6490 and 1.6600 and are likely targets over coming weeks.
It has yet to been seen whether USDJPY can extend its sharp fall towards beyond strong support at the 92.00 level. If the pair can stabilize around 93.00 we are likely to see a return towards 94.40 first. With a stronger Euro and stronger Pound, the Yen-crosses may find some good support and correct some of their losses seen in August. EURJPY has plenty of space up towards 136 and GBPJPY may head back above 155 – to the downside strong support is seen at 131.50 and 149.00 respectively.