Daily FX Commentary

Our team of forex experts analyse the currency markets and offer their insights on which market-moving events are likely to impact the performance of some of the most popularly traded forex pairs in the UK, including GBP/USD, EUR/USD and USD/JPY. 

16th December 2010 - 8:12am

 

EUR/USD

 

Range: 1.3208 – 1.3257 

Support: 1.3171 

Resistance: 1.3280 

The euro was driven sharply lower by rising US Treasury yields and poor auctions yesterday, and opened today in Asia at $1.3213 with little trade as markets starts to wind down for the year. An early rally on easing yields peaked at $1.3236 as model funds took the opportunity to sell, pushing the pair back to $1.3208 where reports of some Sovereign demand halted further falls. Bids are placed at $1.3200, $1.3180 and $1.3165 with stops set on a break of $1.3160.

 

 

GBP/USD

 

Range: 1.5544 – 1.5603 

Support: 1.5533 

Resistance: 1.5662 

Pound's retreat from 1.5910 extended sharply lower on Wednesday, after grim employment data in the UK, and the pair plummeted about 250 pips on the day to find support at 1.5530 and pick up over the Asian session, reaching 1.5570 high. Resistance now lies at 1.5655/65 (Dec 6/8 low) after breaking through the initial resistance of 1.5570 (session high) and then we look for 1.5710/20 (Dec 9/13 lows). On the downside, support levels lie at 1.5530/40 (Dec 15 low/session low) and then 1.5485 (Nov 30 low) and 1.5345 (Sept 10/14 lows).

 

 

USD/JPY 

 

Range: 84.03 – 84.38 

Support: 83.50 

Resistance: 84.51 

Although the market continues to recover with prospects for a material base looking more and more encouraging following the recent break back above the daily Ichimoku cloud, inability to establish any meaningful upside momentum beyond 84.00 suggests that the recovery could be on hold for a bit, with the market now in the process of consolidating. Ultimately however, while the pair holds above 82.00 on a close basis, we retain a constructive outlook. Only a daily close back below 82.00 will negate and open the door for a resumption of the broader underlying downtrend, while a break and close back above 84.40 will mark and end to the consolidation and open a fresh upside extension towards 86.00.

 

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