Currency Updates:
U.S. Dollar Trading (USD) volatility was seen in most pairs overnight with the USD large losses against the Euro on Friday pared back and the USD/JPY gains reversing as well. Nothing major was released and stocks were unchanged so the movement was put down to month end adjustments as other currencies gained heavily with the AUD particularly strong.
The Euro (EUR) the weakness against the USD was amplified against the Yen which slumped over 200pips overnight with a dramatic reversal after running up to Y110 in recent weeks. The move looks like profit taking but the downgrade of Greece to selective default has caused some uncertainty going into Europe with many investors wanting to know what this would mean for credit markets. Looking ahead, February Eurozone Consumer Sentiment forecast at -20.2 vs. -20.7 previously. Also ahead US January Durable Goods Orders forecast at -1% vs. 3% previously.
The Japanese Yen (JPY) the USD/JPY had its first significant pull back falling from Y81.50 in Asia to test Y80 in late US trade Monday. The recent rally has had a lot of coverage and the most dramatic fall was in the EUR/JPY which has rallied the most. As long as we hold above USD/JPY Y80 then the move higher is still holding.
The Sterling (GBP) the GBP/USD traded in the same style as the Euro falling slightly back on the day but holding steady on the EUR/GBP cross. 1.5900 is seen as the resistance point whilst support in the lower 1.5800 region has held so far.
Australian Dollar (AUD) the underperformance of the Aussie was reversed yesterday with the pair the best performing currency in the US session gaining heavily across the board. Resistance is seen at 1.0800 which has held the top of the recent range.
Oil & Gold (XAU) Gold came under profit taking and tested support at $1760 which held and so far Tuesday has grinded back above $1670. OIL/USD reversed to $107.50 in line with other markets that came under profit taking pressure. Iran tensions are still the main driver of the elevated prices.
