Previous session overview The dollar held its ground on the euro and high-yielding currencies Tuesday, finding support as a rating agency’s threat to downgrade the U.K.’s AAA rating spooked investors and increased the desire for the relative safe-haven status of the U.S. unit. The British pound was the session’s big mover, selling off after David Riley, Fitch Ratings’ co-head of global sovereign ratings, told Reuters in an interview Tuesday that the U.K. has the highest risk of major economies of losing its AAA status. The language echoed a Fitch report from late July, but Riley’s remarks proved enough to trigger a round of profit-taking a day after sterling rose to a three-month high against the dollar. In recent action, the pound fetched USD1.6710, down from USD1.6763 in North American trading late Monday. The pound had slipped to a low near USD1.6600 in earlier action. The EUR rose as much as 0.5% against the pound earlier on, but it recently traded up 0.2% to 89.62 pence. The EUR did not mark time with cable on the move instead holding to recent consolidation around the USD1.4980 area; low prints at USD1.4949 again finding bids with highs matching Monday’s at USD1.5021. Market expectation The euro and other high-yielding currencies are expected to take their cues from stocks and commodities during Tuesday trading; if U.S. stocks extend Monday’s rally that sent the Dow Jones Industrial Average to a 13-month high, high-yielders are expected to break out of their morning ranges and gain; if stocks open lower, as is expected, the dollar could strengthen. USDJPY pressed to JPY89.70 area a short while ago as euro-yen retreated from its earlier high as the euro saw LHS pressure around various fixings but flows here, as elsewhere, on the light side. Dollar pair still said to hold demand interest sub JPY89.60 and pair is modestly responsive to risk-appetites still. Exporter offers remain atop JPY90.30 area, beyond the high seen just ahead of the US session as euro-yen supported. Pound again meets decent resistance at USD1.6722 (50% USD1.6844/1.6600), with rate backing off to currently trade around USD1.6710. Rate retains a buoyant tone with continued talk that the 1600GMT fix to see RHS fix interest. Traders note that the earlier sale of E700mln in euro-sterling was transacted for the 1400GMT fix. Movers & Shakers:

USD/CHF +0.28%

EUR/GBP +0.21%

NZD/USD +0.18%

EUR/CHF +0.07%

CAD/JPY +0.06%

EUR/USD -0.21%

AUD/JPY -0.24%

EUR/JPY -0.30%

AUD/NZD -0.31%

EUR/CAD -0.36%

CHF/JPY -0.37%

EUR/NOK -0.38%

GBP/USD -0.43%

GBP/JPY -0.52%

Important levels:

Support Resistance

EUR/USD

1.4895 1.5068

1.4784 1.5131

1.4721 1.5242

GBP/USD

1.6645 1.6878

1.6511 1.6977

1.6412 1.7111

USD/CHF

1.0029 1.0149

0.9982 1.0222

0.9909 1.0269

USD/JPY

89.620 90.190

89.375 90.515

89.050 90.760

Source: Dukascopy

Previous session overview The U.K. pound fell sharply in Asia Tuesday, dragging the euro down with it, due to reported remarks by a senior official at Fitch Ratings that the U.K. is most at risk among major economies of losing its AAA status. Fitch’s co-head of global sovereign ratings David Riley made the remarks in an interview with Reuters earlier in the day. The yen rose slightly against the euro and dollar Tuesday. The euro was at JPY134.44 from JPY134.90 in New York and the dollar was at JPY89.73 from JPY89.99. The rise was mostly due to Japanese exporters, who sold the two currencies against the yen as part of their regular monthly settlement. The euro rallied toward USD1.50 on Monday amidst broad-based US dollar weakness, as well as signs that the Euro-zone largest economy may be pulling the region out of recession thanks to increased trade. The German trade balance surged to 10.6 billion euros in September (not seasonally adjusted), as exports rose 3.8 percent while imports increased 5.8 percent. The British pound may have gained nearly 1 percent against the US dollar and Japanese yen, but the currency generally fell versus the rest of the majors as there are lingering concerns that the Bank of England will continue to expand their quantitative easing program. The Australian dollar edged higher in Asia trade on Tuesday and is tipped to climb further in the near term as economic fundamentals continue to favor appreciation. Market expectation Pound traders flash up that a ‘good name’ was a noted buyer in the USD1.6630/35 area, with rate pushed up to current level around USD1.6655. Offers seen placed toward USD1.6680. The euro also slipped against the dollar, but dealers said the single currency is likely to claw back its losses, as investors’ long-term sentiment suggests the greenback will remain under selling pressure as the Federal Reserve may have no choice but to keep its rates low to boost economic growth. Euro-dollar bids remain at USD1.4950, with resistance USD1.5020/30. Russian sales of euro-dollar into early Europe ease rate back to USD1.4982. European stock markets are expected to open modestly higher Tuesday after the Dow Jones Industrial Average hit a new 2009 high, and strong gains in Asia, as upbeat sentiment after the Group of 20 meeting continued to lend support. Giving a firm signal the government is relaxed with any test of parity against the U.S. dollar, Australia’s Trade Minister said the Australian dollar could rise to parity with the U.S. currency, and the country’s manufacturers will have to learn to live with it. Movers & Shakers:

CAD/JPY +0.84%

NZD/USD +0.80%

EUR/GBP +0.62%

AUD/USD +0.53%

EUR/USD +0.44%

AUD/JPY +0.28%

CHF/JPY +0.21%

EUR/JPY +0.19%

AUD/NZD -0.26%

GBP/JPY -0.42%

USD/CHF -0.44%

GBP/CHF -0.63%

EUR/CAD -0.64%

EUR/NOK -0.70%

USD/SEK -0.77%

USD/CAD -1.07%

USD/NOK -1.13%

Important levels:

Support Resistance

EUR/USD

1.4895 1.5068

1.4784 1.5131

1.4721 1.5242

GBP/USD

1.6645 1.6878

1.6511 1.6977

1.6412 1.7111

USD/CHF

1.0029 1.0149

0.9982 1.0222

0.9909 1.0269

USD/JPY

89.620 90.190

89.375 90.515

89.050 90.760

Source: Dukascopy

Previous session overview The euro logged fresh two-week lows against the yen and the dollar in Asia on Thursday, as weakness in commodity and share prices prompted investors to sell higher-yielding but riskier currencies. The common European currency briefly hit JPY132.81 during early Asian hours, the lowest since Oct. 14. Meanwhile, the yen, which is considered the safest of the major currencies, rose against the dollar, with the greenback touching a one-and-a-half-week low of JPY90.23. Wednesday’s disappointing US new-home sales data added to worries over the US economic recovery. Home sales unexpectedly fell in September, following five consecutive increases. The euro fell to a two week low against the US dollar as weaker-than-expected US data prompted a sell-off in higher-yielding currencies. The single currency continues to extend its losses as it remains a proxy for risk appetite. Sterling fell across the board as lower equities and oil prices encouraged investors to trim exposure to currencies perceived as higher risk. Tuesday’s much weaker-than-expected US consumer confidence data along with today’s lower US new home sales data increased concerns over the extent of the global economic recovery, weighing on equities and triggering flows into currencies such as the greenback and the yen. The Australian dollar was sharply lower late in Asia Thursday while bond futures soared as a correction in risk appetite gained momentum with dealers awaiting a crucial health check on the U.S. economy. Market expectation The yen continues to advance against the dollar, euro and pound on Thursday as stocks are sold off and investors seek to curtail risk. The euro could fall further if commodities prices decline, suggesting the worsening of global economic conditions and boosting the allure of safe currencies such as the yen and the dollar, also, if results of U.S. gross domestic product data for the July-September period due at 1230 GMT disappoint, the euro could drop further, dealers said. For EURUSD bids remain in place toward USD1.4700, stronger between USD1.4685/80. Offers seen placed at USD1.4736 through to USD1.4750. Further offers USD1.4770/80. US GDP is the main focus. EURGBP under pressure again into early European trade Thursday, with traders noting further long positions getting squeezed out, with continued talk that M&A related sales have provided the main downside lead. USDJPY traders are noting bids in the JPY90.20/15 area this morning, with stops coming in below JPY90.00. Technical analysts see the 50% retrace of this month’s rally under pressure at JPY90.17, ahead of the 61.8% retrace at JPY89.66. European stocks are expected to extend their losses Thursday, as traders continue to take the opportunity to book more profits on this year’s rally as they question the pace of the economic recovery and wait cautiously for the release of U.S. third-quarter gross domestic product data. Movers & Shakers:

USD/NOK +1.85%

USD/SEK +1.84%

AUD/NZD +1.43%

USD/CAD +1.33%

EUR/NOK +0.95%

GBP/CHF +0.77%

EUR/AUD +0.75%

USD/CHF +0.74%

EUR/CAD +0.44%

EUR/USD -0.88%

EUR/GBP -0.93%

GBP/JPY -0.93%

USD/JPY -0.97%

AUD/USD -1.62%

CHF/JPY -1.69%

EUR/JPY -1.84%

CAD/JPY -2.27%

AUD/JPY -2.58%

NZD/USD -3.01%

Important levels:

Support Resistance

EUR/USD

1.4658 1.4807

1.4600 1.4899

1.4508 1.4957

GBP/USD

1.6285 1.6467

1.6195 1.6558

1.6104 1.6648

USD/CHF

1.0213 1.0300

1.0160 1.0333

1.0127 1.0386

USD/JPY

90.203 91.383

89.786 92.146

89.023 92.563

Source: Dukascopy

Previous session overview The dollar slipped a tad against the yen in Asia Wednesday due to profit-taking, but it may rise briefly later in the day as Japanese fund players are expected to launch their buying for new trust funds. The profit-taking sent the dollar to JPY90.68 at 0450 GMT from JPY90.71 in New York Tuesday. The Dollar Index, a trade-weighted basket of six currencies, was at 75.52 from 75.54 overnight. But expected trust fund-related buying is likely to turn the dollar around later in the day, dealers said. EURUSD closed in NY around USD1.4940/45, having been pressed to lows in that session of USD1.4883 following the failure to take out the much reported barriers at USD1.5000 (USD1.4994/92 Asia-NY highs) with BOC countering any hopes for an early rate hike, which prompted strong short covering buys in dollar-Canada, seen as the catalyst for the general dollar correction. Early trade in Asia was confined to a range of USD1.4940/20 before strong sales of euro-yen by exporters after the Tokyo fix again took rate under USD1.4900 before meeting demand on the dip at USD1.4888. Sterling extended gains, hitting a fresh four-week high against the US dollar, boosted as the greenback came under broad selling pressure with solid US corporate earnings lifting demand for perceived higher risk currencies. The Australian dollar was lower late Wednesday as the currency’s extended rally showed signs of exhaustion, prompting the need for a temporary pause, traders said. Market expectation EURUSD traders note sell interest seen in place between USD1.4945/65, with stops above USD1.4975. If stops triggered may again expose USD1.5000. Failure in the USD1.4945/65 area may allow for a pullback toward the USD1.4885/70 area ahead of USD1.4860/40. GBPUSD currently trades at USD1.6390, with demand seen at USD1.6385/80, more at USD1.6370 and ahead of USD1.6355/50. Offers USD1.6440/55, a break above here may open a move toward USD1.6490/00. USDJPY remains under downward pressure stemming from low U.S. interest rates, pair may rise briefly in coming few days, getting tailwind from buying by Japanese institutional investors to launch new Toshin, which usually happens toward end of month, said analysts. Some traders said that players are hesitant about buying the euro aggressively due to European officials’ complaints about a high euro, but Europe’s interest rates which are higher than the U.S.’s will likely make players push the euro up eventually. Looking ahead, players will pay attention to releases of earnings reports from U.S. firms such as Morgan Stanley later in the global day. If results show firm business performance, stock prices will rise and the euro is likely to follow suit, dealers said Movers & Shakers:

USD/CAD +1.73%

EUR/CAD +1.39%

USD/NOK +0.86%

USD/JPY +0.63%

USD/SEK +0.61%

GBP/JPY +0.59%

EUR/NOK +0.51%

CHF/JPY +0.38%

EUR/AUD +0.31%

EUR/JPY +0.30%

AUD/JPY -0.02%

GBP/USD -0.04%

EUR/CHF -0.09%

AUD/NZD -0.23%

EUR/GBP -0.30%

EUR/USD -0.35%

NZD/USD -0.40%

AUD/USD -0.65%

CAD/JPY -1.07%

Important levels:

Support Resistance

EUR/USD

1.4877 1.4990

1.4823 1.5049

1.4764 1.5103

GBP/USD

1.6309 1.6470

1.6239 1.6561

1.6148 1.6631

USD/CHF

1.0083 1.0168

1.0041 1.0211

0.9998 1.0253

USD/JPY

90.235 91.225

89.665 91.645

89.245 92.215

Source: Dukascopy

Previous session overview The euro remained stronger against the dollar in morning New York trading Tuesday, but has pulled back from overnight highs near the psychologically important USD1.50 mark after weaker-than-expected U.S. housing data dented risk appetite. However, the common currency’s retreat is likely to be temporary, and currency moves throughout the session are likely to track the stock market and its response to corporate earnings, analysts said. U.S. housing starts in September increased 0.5%, less than the 2% increase economists had expected. Housing permits also dropped 1.2%. Economists had expected permits to increase by 2.8%. The euro rose to USD1.4994 in overnight trading as investors piled into risky trades buoyed by strong U.S. corporate earnings and a tough statement on inflation from the Australian central bank. Minutes from the Reserve Bank of Australia’s Oct. 6 meeting indicated the RBA could again raise key interest rates as early as November, analysts said. The RBA was the first central bank of a major economy to raise key interest rates. The central bank tightened its rates to 3.25% from 3.00% in October. The Australian dollar rose to its highest level since August 2008 before pulling back by the U.S. session. Market expectation Analysts said data this week may not have a lasting impact on currency markets. Instead, investors are watching for the euro to break through the USD1.50 mark, they said. This level may prove a challenge for the euro given that there are major orders to buy dollars just ahead of the USD1.50 mark. But once the euro finally breaks through USD1.50, the move upward toward USD1.5050 could come very quickly, analysts said. The common currency could reach USD1.50 Tuesday. USDJPY gains extended to near to JPY90.40 area after the pair found a base around JPY90.12 just a short while ago, some bids showing up ahead of earlier reported demand interest at JPY90.00, traders say. Flows modest in the pair as market tries to determine the next moves for the yen, recent yen longs across all pairs set in the wake of the elections now largely squeezed out, the traders assert. Offers placed at a relatively distant JPY91.00/10. EURGBP stretched to lows of stg0.9084, with traders linking sterling demand to strong cable buys from a UK clearer, this rate pushing up to USD1.6490. Earlier talk placed bids at stg0.9075/70, but now getting flashed that there a ‘lot of stops positioned from below stg0.9080. Recent talk noted large stops under stg0.9070. Movers & Shakers:

NZD/USD +1.00%

GBP/USD +0.92%

AUD/USD +0.74%

GBP/CHF +0.43%

GBP/JPY +0.42%

EUR/USD +0.35%

AUD/JPY +0.24%

AUD/NZD -0.26%

EUR/AUD -0.40%

USD/CAD -0.47%

USD/CHF -0.49%

EUR/NOK -0.50%

USD/JPY -0.51%

EUR/GBP -0.58%

USD/SEK -0.60%

USD/NOK -0.84%

Important levels:

Support Resistance

EUR/USD

1.4870 1.5024

1.4772 1.5080

1.4716 1.5178

GBP/USD

1.6288 1.6483

1.6168 1.6557

1.6094 1.6677

USD/CHF

1.0069 1.0195

1.0024 1.0276

0.9943 1.0321

USD/JPY

90.380 91.155

89.990 91.540

89.605 91.930

Source: Dukascopy

Previous session overview The euro nearly touched the psychologically important USD1.50 mark in Asia on Tuesday as falling U.S. interest rates prompted market participants to sell the greenback, while firm regional share prices encouraged them to buy the common currency instead. The U.S. currency also fell against the yen, partly because of Japanese exporters’ selling. The volume of such sales is usually high on the 5th, 10th, 15th, 20th, 25th and 30th of every month because they tend to settle accounts on these days. The greenback was at JPY90.20 from JPY90.56 in New York, and dealers said it may soon fall below JPY90.00 again. The Dollar Index, which measures the currency’s value against six major units, was at 75.19 from 75.37 overnight. The euro, whose gains make exports from the euro zone more expensive, has risen about 20% versus the dollar since early March and to roughly the same degree against the Chinese Yuan, which closely tracks the U.S. currency. The European currency was trading near a 14-month high of USD1.4950 against the dollar Monday. The British pound rallied against the dollar to a four-week high at USD1.6436 in late trading on Monday. Earlier in European morning cable dropped to USD1.6240 partly due to BOE’s Adam Posen was quote in a newspaper interview that ‘he is ready to back an increase in the Bank’s 175 billion pound quantitative easing program next month.’ However, the strength in stock markets around the globe increased the demand for perceived riskier assets. The Australian dollar rallied to fresh 15-month highs above USD0.9300 on Tuesday as the Reserve Bank of Australia signaled there were increased inflationary risks over the medium term. In minutes of its Oct. 6 board meeting, the RBA said inflation concerns were the trigger for its decision to lift interest rates by 25 basis points to 3.25%. It also foreshadowed upward revisions to its inflation and economic growth forecasts in a coming quarterly policy statement. Market expectation Pound currently seen resting on the broken resistance at USD1.6425, with bid interest seen placed to USD1.6420. A break here may allow for a deeper pullback toward USD1.6505/395 with stronger interest remaining in place at USD1.6375. Above USD1.6450 may open a move toward USD1.6470/80 ahead of USD1.6500. For EURUSD offers remain in place to USD1.5000, with talk of a mix of offers and stops placed between USD1.5005/10. Support seen placed at USD1.4965 through to USD1.4950, stronger at USD1.4920 and USD1.4880/70. Looking ahead, players will pay attention to the earnings reports of U.S. firms to be released later the global day. If the reports show good results, U.S. stock prices will rise and the dollar will decline, said analysts. The next key risk event for the U.K. pound will come Wednesday from the minutes of the most recent Bank of England monetary policy committee meeting, at which the MPC left interest rates and asset purchases on hold. Data to be released on Tuesday include machine tool orders in Japan, PPI in Germany; PSNCR in U.K; building permits, housing starts, PPI and PCE in U.S.; leading indicators and BOC rate decision in Canada. Movers & Shakers:

NZD/USD +1.15%

AUD/USD +1.09%

GBP/USD +0.73%

EUR/USD +0.64%

AUD/JPY +0.30%

CHF/JPY +0.10%

CAD/JPY +0.08%

EUR/CHF -0.24%

EUR/CAD -0.24%

EUR/AUD -0.45%

USD/SEK -0.78%

USD/JPY -0.78%

USD/CAD -0.86%

USD/CHF -0.87%

EUR/NOK -0.92%

USD/NOK -1.55%

Important levels:

Support Resistance

EUR/USD

1.4870 1.5024

1.4772 1.5080

1.4716 1.5178

GBP/USD

1.6288 1.6483

1.6168 1.6557

1.6094 1.6677

USD/CHF

1.0069 1.0195

1.0024 1.0276

0.9943 1.0321

USD/JPY

90.380 91.155

89.990 91.540

89.605 91.930

Source: Dukascopy

Previous session overview The dollar is stronger against the euro in early New York trading Friday as investors take end-of-week profits and higher-yielding currencies take a breather after big run-ups over the past week. But even though the dollar is being given a brief respite from its recent drubbing, the euro will rise again, analysts said. The dollar continued to strengthen against the yen after analysts said key technical levels on Thursday were tripped, which sent the dollar higher against the yen. The pound also continued to strengthen against the dollar, as investors who had shorted the British currency are now being squeezed out of the market as new investors flood into the pair, analysts said. Meanwhile, U.S. Treasury Secretary Timothy Geithner said in a television interview that the U.S. dollar would retain its role as the world’s reserve currency, but acknowledged maintaining its status entails “special obligations and responsibilities” to keep the dollar’s value from eroding. Market expectation Investors are looking toward several pieces of data to be released Friday, including the Treasury International Capital report, industrial production numbers and consumer confidence data. Strong economic data could give the euro a boost if investor’s trade based on risk, with rosier data supporting an economic recovery and higher-yielding assets over the safe-haven dollar. The TIC data is expected to show buying of U.S. Treasurys lent support to foreign inflows into the U.S. though analysts will be watching to see how much money U.S. investors are sending abroad, as the global economy recovers and investors abandon the dollar to chase higher yields overseas. EURJPY pullback from highs above JPY136.00 seen in the European morning are so far contained ahead of JPY135.50, with technical analysts saying the outlook is positive after yesterday’s break and close above the Ichimoku cloud, today seen as pivotal at JPY133.81. On the topside, the rally has so far stalled in line with the August 24 high at JPY134.09. A break above this area may expose the next tech level at JPY136.44 (76.4% retrace August-October sell-off). EURUSD continues to pivot around USD1.4880, following earlier reports of semi official demand seen around this area. However, rate did manage to extend intraday lows to USD1.4868, currently back around USD1.4884. Bids earlier reported in place between USD1.4865/60, more between USD1.4845/40. Offers remain in place at USD1.4925. Movers & Shakers:

EUR/CAD +1.00%

USD/CAD +0.98%

GBP/JPY +0.95%

GBP/CHF +0.76%

USD/SEK +0.72%

GBP/USD +0.51%

EUR/JPY +0.47%

USD/JPY +0.44%

EUR/NOK +0.43%

AUD/USD -0.14%

EUR/GBP -0.47%

NZD/USD -0.53%

CAD/JPY -0.55%

Important levels:

Support Resistance

EUR/USD

1.4876 1.5001

1.4797 1.5047

1.4751 1.5126

GBP/USD

1.6113 1.6452

1.5888 1.6566

1.5774 1.6791

USD/CHF

1.0108 1.0188

1.0074 1.0233

1.0029 1.0267

USD/JPY

89.758 91.443

88.691 92.061

88.073 93.128

Source: Dukascopy

Previous session overview The yen weakened against the euro and dollar in Asia Friday as firm Asian equity markets and commodity prices prompted speculators to dump the safe-haven Japanese currency in favor of higher-risk units. The euro rose to JPY136.03 during the morning session, its highest level since August 24, after closing at JPY135.51 in New York late Thursday. As of 0600 GMT, the single currency stood at JPY135.71. Meanwhile, the dollar rose to JPY90.99, its peak since September 25, helped by recent rises in yields on U.S. Treasuries. At 0600 GMT, the greenback traded at JPY90.96. The euro dollar pair fell recording a low of USD1.4914 and a high of USD1.4967, having the union currency trading around USD1.4925. Yesterday the pair extended its gains against the green back breaching the USD1.4960 levels then getting back to the USD1.4925 levels. Regarding the GBPUSD, it is consolidating between USD1.6400 and USD1.6310 recording a low of USD1.6319 and a high of USD1.6398, having the royal pound trading around USD1.6335. The pair extended its gains yesterday as it rallied from the USD1.6000 levels to the USD1.6330 levels. The Australian dollar was mostly unchanged late Friday, after retreating from an earlier fresh 14-month high. Traders said buying of the Australian dollar against the yen provided the early catalyst for gains, while others cited a front page article in The Australian newspaper on the growing potential for parity with the U.S. dollar. Market expectation The euro shows some vulnerability Friday, with some profit-taking seeming likely going into the European session, followed by fresh buying perhaps next week. Traders said the euro may rise further against the yen and the dollar if U.S. economic data and corporate earnings come in stronger than expected, increasing risk appetite for high-yielding currencies. The single currency’s next upside targets are at USD1.5000 and JPY136.50, they said. Players’ attention will now turn to U.S. industrial production data due at 1315 GMT to gauge whether the U.S. economy is on its way to recovery. August’s University of Michigan consumer confidence index due at 1355 GMT and Bank of America’s earnings will also be studied by the market, traders said. European stock markets are expected to open higher Friday, with investors generally bullish ahead of more corporate earnings figures which, so far, have mostly surprised to the upside and painted a brighter picture of the global economy. In Australia, the minutes from the RBA’s last policy meeting due Tuesday are likely to further reinforce expectations for more rate hikes. Movers & Shakers:

GBP/JPY +3.51%

GBP/CHF +2.22%

GBP/USD +1.82%

AUD/JPY +1.71%

USD/JPY +1.67%

EUR/JPY +1.37%

USD/CAD +1.31%

CHF/JPY +1.27%

EUR/CAD +1.03%

USD/SEK +1.00%

EUR/USD -0.29%

EUR/AUD -0.33%

NZD/USD -0.49%

EUR/GBP -2.06%

Important levels:

Support Resistance

EUR/USD

1.4876 1.5001

1.4797 1.5047

1.4751 1.5126

GBP/USD

1.6113 1.6452

1.5888 1.6566

1.5774 1.6791

USD/CHF

1.0108 1.0188

1.0074 1.0233

1.0029 1.0267

USD/JPY

89.758 91.443

88.691 92.061

88.073 93.128

Source: Dukascopy

Previous session overview The dollar is stronger against most major rivals in morning trading Thursday as go-go markets that pushed the Dow Jones Industrial Average past 10,000 and beat the greenback overnight to fresh 14-month lows now seem to be taking a breather. Better-than-expected U.S. consumer price index data, along with an improvement in weekly jobless claims numbers, both released Thursday morning, failed to revive risk appetite that has sapped out of the currency market in early New York trading. Disappointment that Goldman Sachs’ results weren’t as strong as some had expected added to the reversal and supported the dollar. The U.K. pound also is recovering strongly, as investors who had bet against sterling are now being squeezed as sterling hits key trading triggers put in place by short-term investors. The pound has suffered in recent sessions amid expectations that the Bank of England will be one of the laggard central banks in tightening monetary policy. The Dollar Index, based on a trade-weighted basket of six currencies, is at 75.722, up from an overnight low at 75.211, a fresh 14 month low, and from 75.551 late Wednesday. The European Central Bank is satisfied with the impact its unconventional policy measures have, even in the face of “subdued” lending developments, ECB President Jean-Claude Trichet said Thursday. Trichet said part of what was happening was due to weaker demand for credit, while unconventional policy measures, which would include easy access to central bank funds for banks, helped to shore up lending. Market expectation Euro rally is pausing for breath, having almost reached resistance levels at USD1.4968/72, which was level that capped topside in November 2007 and latter the measured move of bull-flag break on Oct 6. Some pullback not ruled out, and initial support seen at USD1.4832/45 and 10-day support line at USD1.4778. EURJPY technical traders are noting the pullback in the cross found a base in line with the Ichimoku Cloud top after the break above in the European morning. Subsequent 100-point bounce is bringing the 61.8% retrace of the August-October sell-off into play at JPY135.04. Key area to watch seen placed as the October highs just shy of JPY135.50. USDJPY stalls ahead of tech resistance around JPY90.80 (61.8% Fib of JPY92.53/JPY88.02 move) - Japanese exporter interest noted around that level, traders say. Canadian currency watchers believe that while a short-lived period of correction could ensue for the Canadian currency following two weeks of steady gains, its ultimate target remains the parity mark with the U.S. dollar, last achieved in July 2008. Movers & Shakers:

GBP/JPY +2.75%

AUD/JPY +1.68%

GBP/USD +1.54%

GBP/CHF +1.49%

CHF/JPY +1.23%

USD/JPY +1.18%

EUR/JPY +1.04%

CAD/JPY +0.89%

USD/NOK +0.73%

EUR/NOK +0.57%

AUD/NZD -0.03%

USD/CHF -0.05%

EUR/USD -0.15%

EUR/CHF -0.20%

EUR/AUD -0.63%

EUR/GBP -1.66%

Important levels:

Support Resistance

EUR/USD

1.4866 1.4973

1.4799 1.5013

1.4759 1.5080

GBP/USD

1.5931 1.6054

1.5855 1.6101

1.5808 1.6177

USD/CHF

1.0106 1.0206

1.0068 1.0267

1.0007 1.0305

USD/JPY

88.863 89.933

88.316 90.456

87.793 91.003

Source: Dukascopy

Previous session overview The euro rose to a fresh 14-month high against the dollar in Asia on Thursday as hawkish comments by Reserve Bank of Australia Governor Glenn Stevens and strong Asian shares fueled appetite for riskier currencies. Governor Stevens said early in the Asian morning that the Aussie dollar is being supported by the nation’s economic outperformance compared with its global peers. U.S. and European short-term investors took the comment as a cue to take risk and bought higher-yielding currencies, dealers said. The euro climbed to a high of USD1.4967, its highest level since Aug. 13, 2008, compared with its level in late New York hours of around USD1.4910. The Dollar Index, which gauges the currency’s value against six majors including the euro, declined to 75.21, also a fresh 14-month low. The Pound also took advantage of a weaker USD and further by positive readings in UK unemployment which was steady at 7.9%, however Jobless claims only rose by 20.8K, the smallest rise since May 2008. The Australian dollar surged to fresh 14-month highs Thursday buoyed by signals from the Reserve Bank of Australia that interest rates will continue rising over coming months. Market expectation As risk appetite grows, the yen and dollar are taking losses against the euro and U.K. pound Thursday. Strength in equities reflected by the break suggests the euro and risk-sensitive currencies, such as the Canadian and Australian dollars, can continue their appreciation against the greenback, analysts said. European stocks are expected to open higher Thursday, supported by fresh confidence in the global economic recovery as the third quarter earnings season proceeds. EURUSD found the impetus to move above Wednesday highs at USD1.4948 to take out suggested barriers at USD1.4950, the move peaking in Asia at USD1.4961. Further demand into early Europe has extended move to USD1.4967. Offers are reported in place from around USD1.4970, with further interest seen positioned ahead of option barriers at USD1.5000. Support at USD1.4920. GS and Citi Q3 earnings are in focus, along with EZ and US inflation data. GBPUSD early Europe take rate up to USD1.6116 but offers placed ahead of USD1.6120 so far able to counter the early upside pressure. System stops, as reported in a recent bullet (0249EDT), placed on a break above. However, technical traders suggest that area between USD1.6125/35 should provide some resistance. Further offers noted toward USD1.6150 ahead of USD1.6180. Support seen placed at USD1.6080/70. Traders said the euro could reach USD1.5000 and JPY134.00 later in the day if U.S. economic data and earnings reports slated for release later in the global day prove good, lifting U.S. stocks further. Some traders expected markets to remain buoyant despite a slew of U.S. earnings reports and data on the slate for later Thursday. Movers & Shakers:

AUD/JPY +1.38%

CHF/JPY +1.18%

CAD/JPY +1.13%

GBP/JPY +1.03%

EUR/JPY +1.01%

NZD/USD +0.93%

AUD/USD +0.88%

GBP/USD +0.52%

EUR/USD +0.51%

USD/JPY +0.49%

EUR/CAD -0.13%

GBP/CHF -0.17%

EUR/CHF -0.19%

EUR/AUD -0.36%

EUR/NOK -0.63%

USD/CAD -0.64%

USD/CHF -0.69%

USD/SEK -0.97%

USD/NOK -1.14%

Important levels:

Support Resistance

EUR/USD

1.4866 1.4973

1.4799 1.5013

1.4759 1.5080

GBP/USD

1.5931 1.6054

1.5855 1.6101

1.5808 1.6177

USD/CHF

1.0106 1.0206

1.0068 1.0267

1.0007 1.0305

USD/JPY

88.863 89.933

88.316 90.456

87.793 91.003

Source: Dukascopy

Previous session overview The dollar stayed near 14-month lows on Wednesday after U.S. retail sales topped estimates, adding to confidence stemming from better-than-expected earnings from major companies and good economic data overseas. The dollar is lower but above its weakest levels of the day against most widely-traded currencies early Wednesday, as global risk appetites have been further strengthened by positive corporate earnings reports and economic data. Recent upside earnings surprises from the likes of Intel Corp. (INTC) and J.P. Morgan Chase (JPM) gave a significant boost to global risk sentiment overnight, leading to extensions of rallies for many equity markets as well as further advances for commodities like oil and gold. The positive mood was helped by news from China that its exports hadn’t declined as much as the market had anticipated. Instead of falling 21% in the year to September, they were down by only 15.2%, a big improvement on the 23.4% fall registered in August. The Shanghai Composite Index reflected this with a 1.2% rally on the day. U.S. data was also guardedly positive, as September retail sales declined less than feared with a 1.5% monthly contraction, assisted by generally upbeat results outside of the auto sector. All this has served to accentuate pressure on the dollar, as global capital idled during previous months of financial crisis continues to flow toward higher-yielding and riskier assets. The euro traded at USD1.4884 versus the dollar, up from USD1.4851 late Tuesday. Earlier, the euro pressed above USD1.49 for the first time in more than a year. Market expectation EURUSD with stocks set to open in solid positive territory; risk appetite is picking up - euro presses back over USD1.4900, with eyes on a retest of the o/n highs near USD1.4020. Mix of offers in the USD1.4905/20. Barrier said to be in place at USD1.4950, with offers ahead and stops over USD1.4955/60. EURJPY pullback from US highs at JPY133.75 extending under JPY133.40, with traders seeing light bids now in the JPY133.20/15 area, more into JPY133.00. Topside remains in focus after the break back into the Ichimoku Cloud this week, the top of which is seen as key resistance at JPY133.95. USDJPY dragged lower by a combination of overall dollar weakness as well as light talk of central bank selling. Traders remind that with Asian central banks intervening regularly to prevent their currencies from rising too quickly vs the dollar, these CBS in many cases are choosing to then leg the position by selling USDJPY. This allows them to increase their yen reserves (larger trading partner) while they also increase their overall reserves. Traders also note frustration that USDJPY could not vault JPY90 and stalled at JPY89.90 earlier. Traders said, the weakness in the Greenback continues to press into tech support and new oversold territory. A correction is sorely needed and could happen at any time; with US data due today and into the end of the week there is potential for data to be seen as negative for equities. Should equities and commodities pullback the shorts could run for the exits en masse creating a sharp rally in the USD. Traders said if the bears decide to take a break and cover it will be a drop in Gold that is the precipitating event. Movers & Shakers:

GBP/JPY +1.27%

GBP/USD +1.25%

GBP/CHF +0.92%

AUD/JPY +0.52%

AUD/USD +0.51%

CHF/JPY +0.35%

EUR/JPY +0.33%

CAD/JPY +0.33%

EUR/USD +0.32%

AUD/NZD +0.28%

EUR/CHF -0.01%

EUR/AUD -0.19%

USD/CAD -0.30%

USD/CHF -0.33%

USD/SEK -0.49%

EUR/NOK -0.62%

USD/NOK -0.92%

EUR/GBP -0.93%

Important levels:

Support Resistance

EUR/USD

1.4783 1.4896

1.4716 1.4943

1.4669 1.5010

GBP/USD

1.5781 1.6012

1.5630 1.6091

1.5551 1.6242

USD/CHF

1.0184 1.0268

1.0147 1.0316

1.0099 1.0353

USD/JPY

89.460 90.220

89.070 90.590

88.700 90.980

Source: Dukascopy

Previous session overview The euro rose to a 14-month high against the dollar in Asia Wednesday amid the broad greenback weakness due to growing expectations the Federal Reserve will keep interest rates low for at least the next year. The yen also rose against the U.S. unit and the two currencies could rise even further later in the day because of a dearth of dollar-supportive factors, dealers said. U.S. Federal Reserve Vice Chairman Donald Kohn said overnight in a speech in St. Louis that he expects “the persistence of economic slack, accompanied by stable longer-term inflation expectations, will keep inflation subdued for some time.” The dovish comments sent the yield on the benchmark 10-year Treasury down to 3.32%. The lower interest rates, coupled with the latest sign that they are likely to stay depressed well into next year, prompted players in Asia to offload dollars, dealers said. That caused the greenback to weaken broadly against its rivals, particularly against currencies offering higher yields such as the euro and Australian dollar, dealers said. The Pound was stronger initially on improving UK RICS Housing (at 22, two year high) and Retail Sales figures (2.8% for September), although upside momentum was limited following speculation that UK inflation had been at its lowest level in 5 years. The Australian dollar forged its way to a fresh 14-month high late in the Asian session Wednesday as renewed greenback weakness and surprising resilience in regional equities markets bolstered risk appetite. At 0500 GMT, the Australian dollar was trading at USD0.9135 up from USD0.9076 late Tuesday and just off its intraday high of USD0.9144, its highest reading since Aug. 6, 2008. Against the Japanese yen, it was trading at JPY81.27, down from JPY81.645. Market expectation The euro is higher and seems likely to hold recent gains, even after Tuesday’s disappointing euro-zone economic data. EURUSD Asian traders note that the USD1.4900 is suggested to hold barrier interest, adding that a major Japanese name has been a noted seller ahead of this level through the overnight session. Rate has been able to extend gains into early European trade but falters at USD1.4899. Rate currently trades back around USD1.4885. The U.K. pound rebounded during U.S. trading Tuesday, though analysts said sterling still remains under near-term pressure. Dealers said that unless upcoming U.S. economic data and corporate earnings reports log surprisingly strong results and because U.S. share markets to rally, pushing up long-term U.S. interest rates, the dollar will likely continue weakening for the rest of the weak. U.S. September retail and food sales are due later at 1230 GMT. Economists expect sales to fall 2.1% on-month, after climbing 2.7% in August. Players will also be watching the third quarter earnings report from J.P. Morgan Chase. Continued worries over U.K. fiscal policy, including its high deficits, and investor belief the BOE will continue to keep interest rates low, will encourage traders to forsake sterling for the higher-yielding currencies backed by better economic fundamentals, said analysts. Movers & Shakers:

GBP/USD +1.19%

AUD/USD +0.76%

EUR/USD +0.66%

GBP/CHF +0.55%

NZD/USD +0.39%

AUD/NZD +0.37%

EUR/CAD +0.13%

GBP/JPY +0.13%

EUR/CHF +0.03%

AUD/JPY -0.28%

USD/SEK -0.28%

EUR/JPY -0.38%

CHF/JPY -0.39%

CAD/JPY -0.51%

EUR/GBP -0.51%

USD/CAD -0.52%

USD/CHF -0.63%

USD/NOK -0.82%

USD/JPY -1.03%

Important levels:

Support Resistance

EUR/USD

1.4783 1.4896

1.4716 1.4943

1.4669 1.5010

GBP/USD

1.5781 1.6012

1.5630 1.6091

1.5551 1.6242

USD/CHF

1.0184 1.0268

1.0147 1.0316

1.0099 1.0353

USD/JPY

89.460 90.220

89.070 90.590

88.700 90.980

Source: Dukascopy

Previous session overview The euro hit its highest levels against the dollar since September 2008 in early New York trading Tuesday, as investors chase higher yields despite some discouraging economic reports from the euro zone. Worse-than-expected overnight euro-zone data failed to halt the common currency’s march toward USD1.50, a level that is a target for traders. The allure of higher returns in the euro, the Australian dollar and other better-yielding currencies, fuelled by positive third-quarter corporate earnings, led investors to shake off the disappointing German data, said Stuart Bennett, senior currency strategist at Calyon in London. The ZEW economic expectations index for Germany fell to 56 from 57.7 in September; economists had forecast the expectations index to be unchanged. The current German economic conditions index remained “very poor,” the ZEW institute said, with a modest increase of 1.8 points to a level of -72.2, a reading not as good as economists expected. Germany Reports from some of the euro zone’s biggest economies Tuesday underscored warnings that the region’s economic recovery could be dogged by setbacks. The euro hit USD1.4876 in early New York trading, a level not seen since September last year. It has since given back some of those gains, but remains sharply higher on the day. Market expectation Pound recovery off pullback lows around USD1.5785 (38.2% USD1.5708/1.5829) seen extending to USD1.5815, the rate in late European morning trade able to move above earlier Asian highs at USD1.5825 to USD1.5829. Offers now seen placed to USD1.5820, with interest extending now to USD1.5830, a break to expose stronger area between USD1.5845/50. Support remains back at USD1.5785/80. EURJPY attempting to regain a foothold above JPY133.00, though as yet the move comes with a lack of momentum as the European high remains untested at JPY133.25. Offers still noted into JPY133.30 with technical analysts then seeing trend line resistance from the August highs at JPY133.65. The 76.4% retrace of the September-October sell-off comes in at JPY133.95, followed closely by the top of the Ichimoku Cloud at JPY134.00. A close above the Cloud base (JPY132.86) still needed to take the focus away from the downside. Traders are noting that Loonie has de-coupled from recent commodity driven price action and is moving more from an assumption that the BOC will move quickly to raise rates. Traders think that, the relentless USD selling is putting the USD into record oversold territory as sentiment and technical’s now push into areas almost never seen in any market; the Greenback is reaching a euphoria/frenzy for sellers. Most traders are bearish but are shaking their heads wondering where the correction is. Should Gold, Oil or Stocks have a correction it will likely take the USD the other way as late sellers will cover; look for caution to be the rule this week and more two-way action is likely. Movers & Shakers:

EUR/GBP +0.70%

EUR/USD +0.51%

EUR/AUD +0.39%

NZD/USD +0.33%

EUR/CAD +0.25%

CHF/JPY +0.15%

EUR/JPY +0.14%

AUD/USD +0.12%

AUD/NZD -0.19%

EUR/NOK -0.19%

AUD/JPY -0.25%

USD/SEK -0.27%

USD/CAD -0.27%

USD/JPY -0.38%

USD/CHF -0.53%

GBP/JPY -0.55%

GBP/CHF -0.71%

USD/NOK -0.71%

Important levels:

Support Resistance

EUR/USD

1.4708 1.4845

1.4624 1.4898

1.4571 1.4982

GBP/USD

1.5734 1.5889

1.5653 1.5964

1.5578 1.6045

USD/CHF

1.0210 1.0330

1.0162 1.0401

1.0091 1.0449

USD/JPY

89.363 90.263

89.016 90.816

88.463 91.163

Source: Dukascopy

Previous session overview The dollar rose against the yen in Asia on Tuesday as Japanese importers bought a larger volume of greenbacks than usual to settle accounts after a three-day weekend. But the trend remains negative for the dollar, which will likely soon resume falling, dealers said. Many short-term investors believe the U.S. Federal Reserve will be forced to keep its interest rate low for now due to the country’s slow economic recovery, despite recent hawkish comments by Fed Chairman Ben Bernanke. At 0450 GMT, the dollar stood at JPY89.90 from JPY89.83 in New York on Monday. The Dollar Index, which measures the dollar’s value against the basket of major currencies, was at 76.17, unchanged from overnight in New York. The euro was at USD1.4782 from USD1.4784 and JPY132.86 from JPY132.76. On Monday EUR rallied from the Sydney close, reaching USD1.4813 where it has consolidated. GBP was under pressure, dipping to USD1.5729, a post-May low, but has recovered to USD1.5820 for little change. PM Gordon Brown added to the view that monetary stimulus should remain in place for several years, given the dire fiscal position. The Australian dollar was modestly stronger but off recent 14-month highs in late Asian trade Tuesday on the back of a broader improvement in risk-sensitive asset prices. Thin trading volumes with U.S. markets mostly closed for a public holiday Monday keeping price action fairly muted though a broad rally in regional equities helped keep the Australian unit in positive territory. Market expectation Major currency pairs are little changed so far Tuesday yet the euro has the favorable odds and the pound and dollar look vulnerable. European stock markets are expected to open lower Tuesday, as investors pause for breath and wait for the release of some high-profile corporate earnings figures this week to provide fresh impetus. For EURUSD offers said to remain in place between USD1.4800/20, a break to open a move back toward USD1.4845 (Sep23 high) with stronger offers noted from here and extending to USD1.4850. This latter level holds option barrier interest, part of which rolls off today. Bids remain in place to USD1.4760/55 with talk of stops positioned on a break below with further stops seen dotted down to USD1.4730. Market participants will be watching the German ZEW economic sentiment indicator for October, due at 0900 GMT, as well as earnings reports from U.S. companies such as Intel Corp. If the results of these data and earnings reports come in stronger than expected, risk tolerance will improve, leading to selling of the safe-haven U.S. unit, said analysts. Later in the week, investors will be watching Wednesday’s release of U.S. retail sales and Thursday’s data on the U.S. consumer price index. The minutes from the most recent meeting of the Federal Reserve’s interest-rate-setting body, the Federal Open Market Committee, will be released Wednesday, and will be pored over by investors, analysts said. Movers & Shakers:

NZD/USD +1.23%

EUR/GBP +0.87%

CAD/JPY +0.73%

AUD/USD +0.51%

EUR/USD +0.50%

EUR/NOK +0.29%

CHF/JPY +0.29%

AUD/JPY +0.20%

EUR/JPY +0.18%

USD/JPY -0.31%

GBP/USD -0.38%

EUR/CAD -0.55%

USD/CHF -0.61%

GBP/JPY -0.68%

AUD/NZD -0.72%

USD/SEK -0.95%

GBP/CHF -0.98%

USD/CAD -1.03%

Important levels:

Support Resistance

EUR/USD

1.4708 1.4845

1.4624 1.4898

1.4571 1.4982

GBP/USD

1.5734 1.5889

1.5653 1.5964

1.5578 1.6045

USD/CHF

1.0210 1.0330

1.0162 1.0401

1.0091 1.0449

USD/JPY

89.363 90.263

89.016 90.816

88.463 91.163

Source: Dukascopy

Previous session overview The dollar is likely to continue to sink next week amid growing appetite for non-U.S. assets and signs of apparent official resignation at the dollar’s decline. Mounting faith in economic recovery has reduced the dollar’s safe-haven appeal, while global interest-rate dynamics have fostered the use of the dollar as a funding currency for riskier investments. The lukewarm lip-service paid to the dollar’s decline in recent statements by some international monetary officials doesn’t pose much of an obstacle to the U.S. currency’s slide, either. Moreover, if companies continue to report encouraging results in the slew of corporate earnings reports on tap next week, the euro and other higher-yielding currencies should gain ground on the dollar. The dollar received a day of respite Friday, rising against the euro and yen as investors took profits and adjusted positions ahead of the long weekend due to holidays Monday in the U.S., Canada and Japan. However, the rally isn’t expected to last. The Swiss National Bank must be sighing with relief as confidence in the global economic recovery rises and investors start selling low-yielding currencies, such as the Swiss franc, in favor of higher-yielders, such as the euro. Market expectation Against this background, analysts expect the euro to trade between USD1.47 and USD1.50 in the coming week, while the U.S. currency fluctuates between JPY87.50 and JPY91.0. EURGBP pullback off earlier traded highs at stg0.9350 sees rate meeting demand interest around the broken resistance area at stg0.9325/20. Rate currently trades around stg0.9328. Move seen as cable extends its recovery off earlier lows at USD1.5728, moving up to USD1.5835 but holding just shy of earlier Asian highs at USD1.5843. Offers are noted between USD1.5845/50. Through here and earlier highs at USD1.5883 may move back into view. USDJPY - pullback from earlier highs just shy of JPY90.50 now extending towards JPY90.00 where light bids are noted, in line with expiry interest for the NY cut today. A break below to expose retracements of the bounce from last week’s JPY88.01 lows to today’s high at JPY89.88, JPY89.52 and JPY89.23. Topside stops still noted at JPY90.50/70. The prospect of U.S. rates remaining at ultra-low levels for a while longer yet is one important element, along with rising risk appetites, in the dollar’s increasing use as a funding currency, whereby investors borrow dollars on the cheap and use them to finance bets in riskier currencies and other assets. These trends have in recent days brought the dollar to the brink of some significant levels against the euro, yen, and other currencies. Moving beyond these levels in the near term would likely add further impetus to the dollar’s downtrend, according to most currency watchers. Movers & Shakers:

CAD/JPY +1.07%

CHF/JPY +0.61%

AUD/JPY +0.58%

EUR/JPY +0.48%

EUR/NOK +0.45%

AUD/NZD +0.38%

EUR/GBP +0.38%

AUD/USD +0.30%

USD/NOK +0.24%

USD/JPY +0.23%

EUR/AUD -0.07%

NZD/USD -0.08%

USD/SEK -0.11%

EUR/CHF -0.13%

GBP/USD -0.17%

USD/CHF -0.33%

GBP/CHF -0.48%

EUR/CAD -0.53%

USD/CAD -0.73%

Important levels:

Support Resistance

EUR/USD

1.4678 1.4784

1.4623 1.4835

1.4572 1.4890

GBP/USD

1.5763 1.5997

1.5678 1.6145

1.5530 1.6230

USD/CHF

1.0276 1.0356

1.0234 1.0395

1.0195 1.0437

USD/JPY

89.003 90.233

88.216 90.676

87.773 91.463

Source: Dukascopy

Previous session overview The dollar rose against the yen and the euro in Asia Monday, building on gains posted Friday after U.S. Federal Reserve Chairman Ben Bernanke said the Fed is ready to tighten monetary policy once a recovery takes hold in the world’s largest economy. With Japan’s financial markets closed for a local holiday, the dollar also remained supported by a better-than-forecast report on the U.S. trade balance in August released Friday. But currency analysts say the greenback’s prospects remain poor, and it should move lower against main rivals in coming days. The dollar is out of favor with currency traders because ultra-low interest rates in the U.S. - expected to remain in place for some time yet - have resulted in greater investor interest in other higher-yielding currencies. At 0505 GMT, the dollar traded at JPY90.18, compared with JPY89.83 late Friday in New York. The Euro edged lower following Bernanke comments and further weighed upon as a report showed German Exports had declined unexpectedly. This was also reflected in a narrowing of the German trade balance to 8.1 mln from previous 14.1 mln. The British pound tumbled against the greenback on Friday after Bernanke’s hawkish remarks on dollar. In addition, market expectations that Britain will be the last amongst major countries to withdraw its extremely easy monetary policy due to its poor economic performance also put extra pressure on sterling. The Australian dollar was weaker in late Asian trade Monday as the greenback rallied amid thin liquidity and on the back of continued speculation the U.S. Federal Reserve may be closer to tightening policy. The U.S. dollar continued to strengthen against the major currencies on the back of a speech delivered by Fed Chairman Ben Bernanke last week highlighting a readiness to tighten policy when appropriate. Market expectation The euro, pound and dollar are higher against the yen Monday, but otherwise are trading in tight ranges. Many investors are sidelined with Japanese markets closed and as many U.S. traders were expected to be away for Columbus Day later. Most currency watchers are reluctant to impart much lasting significance to the dollar’s rally on Friday’s accumulation of positive influences. The dollar is generally seen as facing too many obstacles in the near term, including the unlikeness of any imminent turn to tighter policy by the Federal Reserve. For EURUSD bid interest remains in place between USD1.4680/70, a break to open a deeper move toward USD1.4650. Further demand noted in place below USD1.4630. Tokyo holiday overnight and a Federal holiday in the US (stock markets open) expected to provide for subdued trading conditions. Monday will be holiday in Japan and Canada. Movers & Shakers:

USD/SEK +0.58%

AUD/NZD +0.53%

GBP/JPY +0.53%

USD/JPY +0.49%

CHF/JPY +0.46%

CAD/JPY +0.44%

EUR/JPY +0.43%

AUD/JPY +0.41%

GBP/CHF +0.13%

EUR/CHF -0.03%

EUR/USD -0.10%

AUD/USD -0.13%

EUR/GBP -0.16%

NZD/USD -0.64%

Important levels:

Support Resistance

EUR/USD

1.4678 1.4784

1.4623 1.4835

1.4572 1.4890

GBP/USD

1.5763 1.5997

1.5678 1.6145

1.5530 1.6230

USD/CHF

1.0276 1.0356

1.0234 1.0395

1.0195 1.0437

USD/JPY

89.003 90.233

88.216 90.676

87.773 91.463

Source: Dukascopy

Previous session overview The dollar was higher early Friday in New York, extending gains made overnight on the back of comments by Federal Reserve Chairman Ben Bernanke on the eventual tightening of U.S. monetary policy. A better-than-expected report on the U.S. trade balance in August released early Friday also gave the dollar support. The U.S. trade deficit unexpectedly narrowed for the first time in four months, with exports rising to their highest level of the year and imports easing despite higher oil prices. The weak dollar aided the narrowing in the trade balance. Bernanke said in a Thursday evening speech the central bank would be ready to tighten monetary policy and shrink its bloated balance sheet once the economy improves. Loose monetary policy and ultra-low interest rates encourage investors to use the low-yielding dollar to fund bets in riskier assets, such as commodity-backed currencies like the Australian dollar. The dollar lost ground Thursday after a perfect storm of events, including better-than-expected U.S. corporate earnings, a no-surprises day of central bank meetings and rising equities teamed to heighten risk appetite. Market expectation Despite the two-way nature of overnight action the USD is holding on to slight gains in most pairs as the Bernanke comments showed clearer that the Fed is going to respond to support the USD when needed; the oversold condition needs to be corrected and the bears have their warning shot this morning. Should the USD fall back and press again toward new lows traders think the buyers will step in quickly. In traders view, the late sellers are the only ones pressing the Greenback lower at this point and the relief rally could happen at any time. Pound is under renewed pressure in US dealing as bids in the USD1.5935/30 area are cleaned out, earlier noted demand into USD1.5900 now looking vulnerable to a test. Stronger bids said to come in at USD1.5860 with stops below. EURJPY edging back towards the JPY131.50 area after flirting with a JPY130 handle into the US session as dollar-yen dropped below JPY89.00. Technical traders are encouraged after another strong bounce back from the 200-day moving average this week; with Ichimoku resistance now back on the radar at JPY132.28. Traders had suggested large German bond redemption for today may have had a negative impact, though as yet slippage is fairly well contained. Expiry interest seen higher up at JPY133.00 for the NY cut. The Australian dollar is trading near the high for this year uptrend against the dollar, which is USD0.9095 recorded on Thu. Decisive trading above USD0.9103 would point the Aussie up to a wide band of weekly resistance between USD0.9166 and USD0.9292. If trades are stopped below USD0.9103 look for a dip to test USD0.8913. In that case take profit at USD0.9039 and at USD0.8976. Movers & Shakers:

CAD/JPY +2.07%

AUD/JPY +1.06%

USD/JPY +1.03%

AUD/NZD +0.82%

EUR/JPY +0.63%

USD/CHF +0.53%

CHF/JPY +0.50%

EUR/GBP +0.39%

GBP/JPY +0.23%

EUR/CHF +0.13%

USD/NOK -0.20%

GBP/CHF -0.27%

EUR/USD -0.40%

EUR/AUD -0.45%

EUR/NOK -0.59%

NZD/USD -0.77%

GBP/USD -0.80%

USD/CAD -1.01%

EUR/CAD -1.42%

Important levels:

Support Resistance

EUR/USD

1.4713 1.4826

1.4653 1.4879

1.4600 1.4939

GBP/USD

1.5963 1.6133

1.5872 1.6213

1.5792 1.6304

USD/CHF

1.0231 1.0321

1.0187 1.0367

1.0141 1.0411

USD/JPY

88.353 88.988

87.936 89.206

87.718 89.623

Source: Dukascopy

Previous session overview The dollar regained lost ground against the yen and euro in Asia Friday after U.S. Federal Reserve Chairman Ben Bernanke said the Fed is ready to “tighten monetary policy” once a recovery takes hold, prompting Asian hedge funds to buy the greenback. But broad dollar-bearishness may continue, traders said, adding that the U.S currency may fall back to JPY87.00 in the near term, while the euro could rise to USD1.4850. In a speech in Washington during the Asian morning, Bernanke said that “we will need to tighten monetary policy” when an economic recovery takes hold, while also acknowledging that the Fed continues to believe that a loose monetary policy will be needed for an extended period. The comments prompted Asian hedge funds and speculators to buy the dollar, as the remarks reversed some of the recent pessimism on the U.S. economic outlook, dealers said. The dollar climbed to an intraday high of JPY89.32, compared with JPY88.42 late Thursday in New York. The Euro rallied higher, supported by a positive reading in German Industrial Production and a decision by the ECB to leave monetary policy unchanged, with President Trichet that current levels were appropriate with it being too early to draw conclusions. The Pound rose against a broadly weaker US dollar, supported after the Bank of England kept interest rates unchanged as widely expected and reiterated it would keep its asset-buying program under review. The pound, however, failed to extend gains on the view that ongoing weakness in the economy might require more stimulus from the BoE. The Australian dollar was stronger late Friday, but pared gains made in an earlier run to a fresh 14-month high on speculation the Federal Reserve may be close to tightening policy. Market expectation The dollar is rebounding Friday after Federal Reserve Chairman Ben Bernanke said the central bank needs to tighten its grip on monetary policy when economic recovery is in place. Traders said the U.S. unit may resume falling as the Fed is likely to keep its interest rates low over at least the next 12 months. Some signs of interest in buying back currencies against the dollar have appeared already on Friday. Pound Technical traders are highlighting a potential bearish sign as the 55-day and the 100-day moving averages look close to staging a negative cross. The 55-day crossed above the 100-day in May, with cable subsequently staging a strong rally from the USD1.40’s on to a USD1.66 handle. EURUSD picking up increasing talk of stops in the USD1.4690 area, though for now EURUSD is slowly extending European highs. Offers are at USD1.4755/60, more around the Asian peak at USD1.4795/00. European stocks are expected to open lower Friday as the main markets in the region take a breather after edging back close to their 12-month highs this week. Movers & Shakers:

GBP/JPY +1.17%

AUD/JPY +1.12%

CAD/JPY +1.07%

USD/JPY +1.04%

EUR/JPY +0.79%

CHF/JPY +0.76%

GBP/CHF +0.44%

USD/SEK +0.43%

USD/NOK +0.38%

AUD/NZD +0.32%

USD/CAD -0.05%

NZD/USD -0.22%

EUR/USD -0.24%

EUR/CAD -0.28%

EUR/AUD -0.34%

EUR/GBP -0.39%

Important levels:

Support Resistance

EUR/USD

1.4713 1.4826

1.4653 1.4879

1.4600 1.4939

GBP/USD

1.5963 1.6133

1.5872 1.6213

1.5792 1.6304

USD/CHF

1.0231 1.0321

1.0187 1.0367

1.0141 1.0411

USD/JPY

88.353 88.988

87.936 89.206

87.718 89.623

Source: Dukascopy

Previous session overview The euro has ceded the gains it made against the dollar Thursday morning after European Central Bank President Jean-Claude Trichet said excessive currency volatility is negative for the economy and financial stability and that U.S. support for a strong dollar is extremely important. The comments initially sent the euro to a session high at enabling to reach a high at USD1.4802, its highest level since Sept. 24. Such rhetoric would normally be expected to quell euro strength against the dollar, but they fell short of expectations Trichet might use stronger language against the euro’s recent strength. That initially prompted a modest relief rally in the common currency. The Australian dollar has leapt higher once again - rising to a 14-month high at USD0.9051, its highest level since August 2008. It has since retreated slightly to the USD0.9021 area. The dollar’s earlier slide against the yen took it to a low at JPY88.15, just above the critical JPY88.00 level where options barriers helped trigger a sharp rebound by the dollar Wednesday. Market expectation EURGBP stops goes off in the cross under stg0.9170 as cable retains a firm tone just off earlier highs. Technical analysts note the break back below the 5-day moving average at stg0.9190, with the next pocket of demand noted at stg0.9150/40. EURUSD euro slips as bund yields edge lower on Trichet comments. Light bids seen at USD1.4740 - not much below that until option expiry at USD1.4700. USDJPY holds mid range with little impetus, so far, to go one way or the other. Bid seen placed near Wed’s lows around JPY88.00, but stops kick in below JPY87.90. Option expiry is below at JPY87.75. Market players will target a return to the double-bottom lows around JPY87.10, if JPY88.00 decisively gives way. On the topside, the pair will need to clear JPY89.00 (option expiry) for upward momentum to mount, traders say. Movers & Shakers:

AUD/USD +1.83%

GBP/USD +1.16%

NZD/USD +1.16%

AUD/JPY +0.90%

EUR/USD +0.79%

AUD/NZD +0.66%

GBP/CHF +0.50%

EUR/CAD +0.29%

GBP/JPY +0.24%

EUR/CHF +0.13%

EUR/NOK -0.18%

CHF/JPY -0.25%

EUR/GBP -0.36%

CAD/JPY -0.40%

USD/CAD -0.51%

USD/CHF -0.65%

USD/SEK -0.89%

USD/JPY -0.91%

USD/NOK -0.96%

EUR/AUD -1.02%

Important levels:

Support Resistance

EUR/USD

1.4665 1.4752

1.4614 1.4788

1.4578 1.4839

GBP/USD

1.5890 1.6008

1.5816 1.6051

1.5773 1.6125

USD/CHF

1.0265 1.0361

1.0217 1.0409

1.0169 1.0457

USD/JPY

87.908 89.288

87.271 90.031

86.528 90.668

Source: Dukascopy

Previous session overview The dollar fell against the yen and the euro in Asia on Thursday as players sold the low-yielding U.S. unit as strong Australian jobs data strengthened the view that the U.S. will lag other countries in raising interest rates. The comparatively slow pace of the U.S. economic recovery - expected to keep the country’s policy rate at an ultra-low 0.00%-0.25% until well into next year - was highlighted by the surprisingly strong Australian jobs report in the morning session. Australia added 40,600 jobs in September, official data showed, with the unemployment rate falling to 5.7%. Economists had expected the number of jobs to fall by 10,000 and the jobless rate to rise to 5.9%. The strong showing contrasted sharply with September U.S. non-farm payrolls, which shed a greater-than-expected 263,000 jobs, pushing unemployment up 0.1 percentage point to 9.8%. At 0450 GMT, the dollar was down to JPY88.26 compared with JPY88.62 late Wednesday in New York. Euro dropped back against the dollar to USD1.4650 low in the NY session, recovering to close around USD1.4690. Traders said the rate climbed to USD1.4705 prior to the Tokyo open, with demand said to be coming from a US macro account, as well as CTA’s. A generally weaker greenback and the strong rally in Aussie then provided uplift as euro-dollar climbed steadily over the morning session to highs at USD1.4774, taking out Tuesday’s NY highs (USD1.4763) along the way. Pound hit a five-month low after yesterday’s surprising fall in UK manufacturing output cast a negative light on the currency. Although there is negative pound sentiment in the market, Britain’s sentiment of their present circumstances, future prospects and willingness to spend has reflected an improvement. A shock rise in Australian jobs numbers pushed the local currency up through the USD0.90 level for the first time since August 2008 in late Asian trade Thursday. The stronger-than-expected employment data defied expectations of a weakening and reinforced speculation about near-term interest rate rises. Market expectation Dealers said the dollar could fall further against its major rivals during the rest of the global day, as sentiment toward the currency continues to sour. Dealers said European and U.S. market participants may later push the dollar down further. The U.S. unit may fall to JPY87.90, while the euro could rise to USD1.4860, said analysts. The greenback may continue to struggle in the coming months, particularly if the lingering problems of U.S. financial institutions toxic assets come to the fore, traders said. For EURUSD offers said to come in at USD1.4775, more at USD1.4800, though with the ECB rate announcement and press conference due later today, traders foresee a quiet morning ahead. A break above USD1.4800 would expose this year’s highs from September just shy of USD1.4850. European stocks are expected to open higher Thursday after the earnings season kicked off late in the U.S. in fine form. ECB President Jean-Claude Trichet could potentially use his press conference to bemoan the dollar’s current weakness. Meanwhile, traders may be looking later on to take profit in the euro against the pound. Movers & Shakers:

AUD/USD +1.43%

AUD/JPY +1.01%

NZD/USD +0.84%

GBP/USD +0.80%

GBP/CHF +0.73%

AUD/NZD +0.58%

USD/SEK +0.48%

GBP/JPY +0.41%

EUR/USD +0.38%

EUR/JPY -0.02%

EUR/CAD -0.04%

USD/CHF -0.07%

CHF/JPY -0.35%

EUR/NOK -0.36%

EUR/GBP -0.42%

USD/CAD -0.42%

USD/JPY -0.42%

USD/NOK -0.74%

EUR/AUD -1.02%

Important levels:

Support Resistance

EUR/USD

1.4665 1.4752

1.4614 1.4788

1.4578 1.4839

GBP/USD

1.5890 1.6008

1.5816 1.6051

1.5773 1.6125

USD/CHF

1.0265 1.0361

1.0217 1.0409

1.0169 1.0457

USD/JPY

87.908 89.288

87.271 90.031

86.528 90.668

Source: Dukascopy