EURUSD
Strong support from China and even Japan at the Portuguese and Spanish bond auctions last week supported the EUR and obvious short covering on short EUR positions on a break of 1.30 brought the EURUSD to test 1.34.
Can EUR keep getting lucky? At least for the time being I think it probably can. Also supporting is the talk that Germany is loosening its hard stance on the European rescue fund for member countries needing bailouts. But watch this space. This can't be popular nor affordable if you are a German or French? Someone has to pay.. so medium to long term still see EUR weakening but perhaps for now, it could stay supported.
If it can try past 1.34, I see probably a chance to test 1.37. Support 1.33 and 1.30.
AUDUSD
Market still wants to buy but the floods are scaring the bulls and profit taking on long positions continue to keep a lid on AUDUSD near parity.With the Euro situation improves with more risk being taken on, likely we see AUDUSD test parity again but care near 1.0250. A rate hike is unlikely now for the short term or even Q1 in Australia though some are saying the floods will cause inflation. Recontstruction will be swift and that's worth alot of money into the economy. I think a little unclear for now. No reason to jetison AUD really based on interest rates deifferentials.
Support : 98.40, 96.50 Resistance: 1.0000 and 1.0250
USDJPY
Boring range trading on the wide but seems USDJPY has been nudging the range to the topside. I sense this could see test of top at 85 in Q1. Otherwise, range holds.
GBPUSD
Following talk about the PM Cameron saying it needs to fight inflation, GBP is finally catching up. Bid bid bid is what I see. Pivotal is 1.53 for medium term. It could possibly test the 1.6000 but be careful of UK Housing which seems to be turning south. Good chance for longs to get out on rallies.
So rates picture should continue to keep GBP supported in the next days.
Support : 1.55, 1.53. Resistance 1.60
