Currency Tech

EURUSD R 2: 1.2725 R 1: 1.2450 CURRENT: 1.2269 S 1: 1.2000 S 2: 1.1800

USDJPY R 2: 93.70 R 1: 92.45 CURRENT: 91.90 S 1: 90.85 S 2: 89.00

GBPUSD R 2: 1.4725 R 1: 1.4550 CURRENT: 1.4315 S 1: 1.4110 S 2: 1.3830

AUDUSD R 2: 0.9275 R 1: 0.9085 CURRENT: 0.8745 S 1: 0.8710 S 2: 0.8575

Market Brief

EURJPY declined for a third day to 112.55 while the USDJPY traded at 92.02 on speculation the nation's investors will shift funds out of the EU amid concerns that Europe's sovereign debt crisis will persist. Japanese investors sold 1.57 trillion JPY ($17 billion) more in foreign bonds than they bought during the week ended May 7, according to the Ministry of Finance. Machinery orders climbed 5.4% in March (prev. -3.8%, exp. 6.3%). The EURUSD dropped to its lowest since April 2006 amid concern European measures to reduce fiscal deficits will undermine the region's recovery. The EUR slid after ECB President Trichet called for a quantum leap in the way EU nations set their budgets and defended his decision to buy bonds from debt-saddled countries such as Greece and Portugal. Traders last week increased bet to a record that the EUR will fall following a 750 billion-EUR bailout to contain a sovereign-debt crisis. The EURUSD dropped to as low as 1.2235, the weakest since April 18, 2006 while EURJPY slid to 112.55. The currency fell 3.1% last week as speculation grew that the EU will break up after France threatened to pull out of the EUR unless Germany agreed to back the EU's bailout plan. The USDCHF climbed to as high as 1.1446, the most since April 29, 2009, USDCAD rose to 1.0439, the most since May 7. Spain's core consumer prices fell 0.1% (prev. 0.2%) in April for the first time on record on Friday while German ZEW investor confidence probably declined to 47.0 in May (prev. 53) according to a report due tomorrow.

The GBPUSD weakened for a fourth day as the UK's average house price fell 0.4% to 420,203 GBP. The BOE said last week that downside risks to economic growth have increased somewhat, citing the impact of the fiscal crisis in Europe. The bank has been taking a very cautious outlook on the economy, and the trend for the GBPUSD is likely to be downward. The GBP slid to 1.4252, the least since March 31, 2009.

The AUDUSD fell to 0.8751, the weakest since May 6 and AUDJPY declined 1.5% to 80.70 while NZDUSD slid to 0.7023 and NZDJPY dropped 1.1% to 64.66 on concern Europe's austerity measures will damp global growth, sapping demand for higher-yielding assets. The AUDUSD also fell before the RBA releases minutes for the May policy meeting when Governor Glenn Stevens raised the benchmark rate for a sixth time in seven meetings but said lending costs are back to average for most borrowers. Expectations are weak that tomorrow's minutes will revive prospects for rate increases and lend strong impetus for the AUDUSD.

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