EURUSD
Portugese and Spanish bond auctions turned out as a bullish factor for EUR with China's support (apparently). The market took this opportunity to keep pushing EURUSD higher to test above 1.34 in Asian morning trade but this has given way to retreat 100 pips to settle on the low end of 1.33 in late Asia trading. The 1.33-1.34 still looks like a good resitance area as mentioned over the past days. If 1.3330 doesn't hold, suspect EUR favour may be over and short lived. We may see this retrace back to the 1.3150 area or lower to test 1.3050 again over the next 2 days.
Support: 1.3330, 1.3150 and 1.3050. Resistance: 1.34
AUDUSD
AUD sped on th eback of the better risk atmosphere following the good bond auction in Eurozone to test Parity again last night. But it does appear, there's still doubts over the impact of the Queensland floods. Now economists are talking about a hit of above 1% to GDP and that's a ouch!.
The important thing to note is that if the floods cost more then expected, the pressure on RBA to raise rates in Q1'11 or even 2011 is in jeopardy.
I would take a more careful look at the prospects to Australia going forward. For AUD longs against Asian currencies, be more careful. I may be looking at a top of around only back to 1.0250 if AUDUSD can make another charge past parity. I would look to adopt of profit taking strategy above par and maybe use DCI's to get taken out of my long positions in AUD/Asians.
Support: 98.50, 98.00, 96.50 Resistance : 1.0000, 1.0250
USDJPY
I am increasingly starting to think that for the medium term JPY might weaken and we might see 85 give way. Still need to research and solidify my view on this but for the mean time, still 80-85 range.
GBPUSD
This is a surprise move in terms of its longevity. UK housing prices are weaker and apparently PM Cameron said that they have to fight inflation. That means only one thing - higher rates and weaker housing. From market sources, there had been alot of foreign buyers of UK property in the past few years - Spanish? Portugese and if austerity measures start to accelerate, hmmm.. What is weird is the lack of action by the BOE on interest rate front.. am I expecting them to act too early?Nonetheless I wont' be looking to buy UK property anytime soon.
Nonetheless, market loves GBP now. I would attempt to short GBP before 1.60 for a quick move back down to 1.56 area for short term trade.
Support: 1.5750, 11.5650 Resistance 1.5875 and 1.6000
