Another record high in EUR/JPY
EUR/JPY edges to new record high at 151.66 on contrasting comments from BoJ and ECB officials. One the one hand, BoJ Governor Fukui said that Japan doesn’t face an immediate inflation threat, which is inline with the message that BoJ will only remove policy accommodation gradually. On the other than this is contrasting to ECB President Trichet’s comment that ECB will need to be “strongly vigilant” on inflation. USD/JPY is boosted mildly higher by cross weakness in yen. However, dollar softens mildly against Sterling and Swiss Franc.
USD/CHF
Daily Pivots: (S1) 1.2392; (P) 1.2463; (R1) 1.2507; More.
USD/CHF edges further lower to 1.2395 today. At this point, intraday bias remains on the downside as long as USD/CHF stays below 1.2440 minor resistance and further decline is in favor towards 1.233 low. Break will confirm fall from 1.2768 has resumed for 1.2291 support first.
In the bigger picture, previous break of 1.2404 cluster support (61.8% retracement of 1.2182 to 1.2768 at 1.2406) and medium term rising channel (now at 1.2424) indicates that USD/CHF’s medium term rebound from 1.1919 should have completed after meeting upside target of 61.8% retracement of 1.3283 to 1.1919 at 1.2762 and hence deeper decline is in favor to follow towards key support 1.2182.
Firm break below 1.2182 will argue that year long down trend from 1.3283 has possibly resumed with a test of 1.1919 low to follow first. On the upside, however, sustained trading above 1.2523/36 resistance will argue that previous break of the channel line was a false break and put focus back to 1.2768 high.
Read full report (EUR/USD, GBP/USD, USD/CHF, USD/JPY) here.
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