Posted on: 03 February 2016, by: Pepperstone Support, category: Market Review
USDJPY: The next major downside level is around 118.07/33 and then base of support area around 116.0.
USDJPY perfectly tracked a bid in US fixed income, which saw the 10y close below a 1.9% support level (August and October lows).
EURUSD was lively but in the end, respected a 1.08985/1/0940 range.
Eurozone data came in better than expected but had little impact on the common currency. German unemployment decreased by 20k in January, better than the forecasted 8k drop. The unemployment claims rate fell to a record low of 6.2% versus 6.3% consensus. Eurozone unemployment rate fell further to 10.4% in December, lowest since September 2011 and beating the 10.5% consensus.
No surprises coming from Germany's Mersch.
GBP cooled off on Tuesday. The key is whether 1.45 now signals a real “sell the rally” opportunity for those who missed the December-January move lower or does it inspire a more broad based covering of positions.
A key factor to watch in coming days will be the extent to which this deal gets the support of other senior Conservatives (notably Boris Johnson, Theresa May, Michael Gove).
UK construction PMI dropped to 55.0 in January, a 9m low and weaker than the forecasted 57.5. Job creation eased to its slowest for almost 2.5 years. Construction firms report lowest business confidence since December 2014.
AUDUSD looked solid above the 0.7050/00 support level. .7150 continues to be a level we’re watching for a topside break.
NZDUSD also held steady in the 0.6490 area, brushing off another sour milk auction. Fonterra’s Global Dairy Trade Index fell by -7.4%, while milk powder prices fell -10.4%. Ahead, look for support to be reached near 0.6430/0.6450 and 0.6600 the level on the topside.