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Global FX: Majors Settle In Minor Territory

Published 06/24/2013, 10:58 AM
EUR/USD
The pair managed to recoup overnight losses and settled the session only in minor negative territory, after a move lower by USD/JPY through overnight lows in the closing hours of trade, as well as Vodafone/Kabel Deutschland deal, supported the grind higher. In terms of EU-related commentary, the release of the latest IFO survey did little to boost sentiment and stocks, as well as bonds in Europe remained under pressure for much of the session. ECB's Weidmann said that euro-zone states and the private sector should not count on the current phase of low interest rates continuing forever. While it was also reported that Greece needs a further reduction in its sovereign debt level and participation by government creditors should be considered a taboo, according to German Chancellor Merkel's economic adviser. Finally, technical support levels are seen at the 200-DMA line at 1.3072, 1.3050 and then at the psychologically important 1.3000 level. On the other hand, resistance levels are noted at 1.3161/77 and then at 1.3200.

GBP/USD
Similarly to EUR/USD, the pair also settled in minor negative territory, as ongoing concerns over the liquidity crunch in China continued to undermine investor appetite for riskier assets. In terms of UK related commentary, the Treasury announced on Sunday night it had reached deals with all cabinet ministers for budget cuts worth a total of GBP 11.5bln ahead of the chancellor's spending review statement on Wednesday. The Chancellor will commit tens of billions of GBP to big infrastructure projects as he seeks to shift away from spending cuts and onto recovery. Technical support levels are seen at 1.5290/73 and then at the 21-DMA line at 1.5268. On the other hand, resistance levels are seen at 1.5450, 1.5531 and then at the 10-DMA line at 1.5585.
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USD/JPY
The pair failed to sustain the price action observed overnight and settled lower as market participants remained wary of risks posed by the ongoing unwillingness by the PBOC to boost liquidity in the financial system. In terms of Japan specific commentary, PM Abe’s LDP secured an overall majority in the 127-seat Tokyo metropolitan assembly, ahead of the July 21 upper house election.

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