Dukascopy Afternoon Forex Overview – Sept 10 09

Previous session overview

The USD is mixed to start New York after a quiet and firmer start in Asia. Overnight data was largely due in Europe leaving early Asian trade very light and order-driven.

Asian equities were mixed with the Nikkei 225 rising more than 2% helping to keep pressure on the USDJPY but the rate continues on the JPY92.00 handle in early New York.

President Obama’s speech on health care reform hasn’t been a market mover yet this morning as traders are largely focused on weekly unemployment data due out shortly; traders expect the DJIA to open lower as futures are lower suggesting that the USD will have a relief rally as traders move out of risk assets should today’s data be seen as negative for equities.

The USD is heavily oversold at this point so a rally to end the week would not be out of the question.

GBP posted a 15-day high this morning in New York at USD1.6601 after the BOE held rates steady as expected; the rate fell off instantly to trade USD1.6540 area suggesting the move was stops and fast-money types meeting willing sellers. Low prints at USD1.6479 saw short-covering some desks report.

EURO rallied a bit on follow-on buying from yesterday posting a high at USD1.4587 but that drew sellers and the rate dropped to lows at USD1.4518.

Market expectation

EURJPY drops to JPY133.40, as rate gets pulled lower by dollar-yen’s move that has triggered a reported barrier at JPY91.50. A break and clear below JPY133.40 to open a deeper move toward JPY132.80, where a stronger demand is reportedly placed.

EURUSD – “Everybody” had offers around USD1.4600, traders declares, explaining the fall back in the euro to USD1.4575 area after high prints were seen again just a bit above the figure. Pair still holds USD1.4585 area currently and flows have slowed markedly after being described as quite heavy into the highs. Intra-day stops thought to be parked under USD1.4560 now.

Pound traders flash up that stops reside on a break of USD1.6670. Rate currently trades around USD1.6648 after reported resistance to USD1.6660 capped most recent rally extension at USD1.6659.

Source: Dukascopy