US Labour holiday and market undecided with no fresh flows post- NFP data led Asian and European sessions having a quiet day.

EURUSD closing above 1.2855 resistance supported the bullish picture on the horizon over the weekend but market failed to push the price beyond 1.2920 level due to corporate supply after 1.2900 option barrier was taken out.

USDCHF / EURCHF heading south after the news suggesting that “German Banks May Need to Raise $135 Billion on Regulations” and let’s see if the news bad enough to take EURUSD lower as well..

1.2830-1.2925 would be a safe range (1.2875 spot ref.) while 1.2865 appears as a good intraday level to watch today.

USDJPY failing to take the resistance levels out and heading south after each rally makes us feel like a new “EURCHF” status.  A possible double bottom test on its way at 83.6s as market long in xxx-jpy  post NFP with decent stop orders located below the support.

Good Luck All.

Asian and NY investors managed to keep the post-Friday optimism limited yesterday.

The scope of stimulus by BoJ did not impress the market players and that led USDJPY failing to break 86.00.
Equities ticking lower in US and for the rest of Europe on a UK Bank Holiday brought risk aversion / take profit related selling pressure to xxx-jpy in addition to BoJ disappointment.

Directional sellers capping the topside in USDCHF around 1.0310/30 area in Asian session yesterday help to boost the Franc strength on a risk averse day and pair traded down to 1.0237. The good support still remains solid between 1.0215-1.0230 for the pair which held it firmly last week.

EURUSD, despite further QE belief in the market, printed the lows in a stop-loss rush price action this morning at 1.2633 after 1.2775 resistance held it firmly yesterday.  We hear good demand starting around the good support of 1.2620.  A daily close below this support changes the outlook for EURUSD and opens the further downside risk for 1.2475/1.2490 area.  Short position stop orders reported above 1.2750 on the topside.

I believe we trade in a 1.2615-1.2685 range in Asian session today.

Good Luck All.

CABLE-currently sitting on very decent 1.5540-60 support. Watch that one carefully though, that is the third attempt on that support line as you can see. A break of that line would suggest a move to 1.5400-30 area.

USD/JPY-yet again, the resistance held yesterday, 85.80-00. Now the resistance moved to 85.40-60. Move through 85.60 would finally open up to test higher. I am quite bullish on these levels.. but the trade seems rather crowded and the last few attempts been quite disappointing.

EUR/JPY-that might be pointing out the obvious. But 108.90-00 still acting as a massive support and even though there is rumors of S/L below it and it trades heavy almost every morning, we don’t seem to be able to break it. On the chart you see it is building a wedge, with the levels at 108.90-00 and 110.20-40. As long stuck within there, especially in Asia, I doubt we will see any follow through. But keep an eye on it..

Any of the levels mentioned here, could be the trigger for the breakout we are all waiting for….

Good Morning,

U.S. manufacturing and inflation data increased the worries that a double-dip recession could be at hand. The greenback weakened against the majors while Oil fell below $77 after US data curbing the expectations for the strength of US economy and future demand growth.

Above in addition to Chinese data in Asian session yesterday increased the pace/momentum of EURUSD rally after the break of 1.2765 and pair printed 1.2955 as o/n highs.  With a possible tp and fresh sellers between 1.2950/1.2985 area, the first knee-jerk asian opening may drag EURUSD down to 1.2875/85 support while the topside target of the broken Head&Shoulder formation on daily charts in the last of week June,2010 still suggests a test of 1.3055.  The weekly support level is also yesterday s good resistance level in Asia at 1.2745/50 area.

Despite equity markets in US ended almost  flat on Thursday following positive developments at BP Plc and Goldman Sachs, I reckon we are going to see the decouple of USD trading vs. majors and EM/Commonwealth currencies.

AUD failing to break of 0.8860 and getting squeeze down to 0.8825 just before recovering to yesterday Asia highs at 0.8840 after Sydney close shows the overall choppy conditions. 0.8650/65 downside target with 0.8715 holding the first line, I think it s not a bad idea to sell above 0.8825 with a tight stop around 0.8875…

USDJPY traded heavily on the back of JBG in Asia and 2Y US-JP spread  later on the day brought extra supply to the pair to break 88.00 and print 87.23 lows.  87.05/87.75 may dominate the Asian session while a pullback in GBPJPY and AUDJPY may put some extra pressure to the pair.

Have a great weekend.

Good morning,

US June retail sales, was weaker than expected, with the headline number declining 0.5% and ex-auto sales declining 0.1% in line with expectations. Also, the minutes of the June 22-23 FOMC meeting revealed relatively modest downward revision to the 2010 growth forecast and noting it could take five years to return to normal conditions.

US equities paused the recent rally on the back of above while XXX-JPY drifted lower due to growth concern related risk aversion in addition to forthcoming Japanese regulation limiting the extent of yen selling by margin traders. A break of 88.05 in USDJPY may squeeze the short term long market down to 87.50 to test the support line.

EURUSD printed the highs at 1.2778 with weaker momentum and triggered the stop-loss orders above 1.2760 while fresh supply waits for another leg higher to fill the demand just above 1.2800. I think 1.2710- 1.2745 may be our tight range before Chinese numbers with a risk of 1.2680 support break which may push market lower for a retrace to 1.2585/1.2620 area.

AUD failed to break 0.8865 resistance despite a high print of 0.8871 and feels heavy after the rising risk aversion o/n.  Real money supply was rumored to be above 0.8840 yesterday which also supports the price action. A range of 0.8795/0.8865 is possible with a risk of 0.8715 if further risk aversion dominates Asian session post-Chinese data later on the day.

Good luck.