Currency Tech

EURUSD R 2: 1.2650 R 1: 1.2450 CURRENT: 1.2175 S 1: 1.2125 S 2: 1.2000

USDJPY R 2: 95.00 R 1: 93.70 CURRENT: 92.68 S 1: 89.00 S 2: 88.00

GBPUSD R 2: 1.4950 R 1: 1.4725 CURRENT: 1.4632 S 1: 1.4550 S 2: 1.4400

AUDUSD R 2: 0.8800 R 1: 0.8575 CURRENT: 0.8433 S 1: 0.8380 S 2: 0.8130

Market Brief

The USDJPY traded at 92.64 after it reached 92.81, the strongest since May 18 was poised for a two-week advance after Fed's Hoenig's call for an increase in the interest rates to 1%. He also added that the first step toward a more normal policy is to move policy rates off zero, back toward neutral. With the improvements in market conditions and liquidity, and with an improving outlook, the FOMC would be prepared to raise the funds rate target to 1% by the end of summer. The JPY fell against most of its peers before a report tomorrow that's forecast to show US payrolls grew the most in May since 1983, boosting risk appetite. US stocks rose yesterday, giving the S&P 500 Index its first back-to-back gains since April rising 0.4% to 1,102.83. South Korea's won weakened after North Korea said war may break out. The USDKRW rose 0.4% to 1,202.50 as the won posted the biggest decline among Asia's top traded currencies and the MSCI Asia Pacific Index fell 0.3%. The Kospi stock index gained 0.1% after the Korean GDP rose 2.1% (prev. 1.8%). The USD Index was little changed at 87.15 posting its highest close in more than a year after the jobs and service sector data from the US.The AUDUSD traded at 0.8448, set for a 0.3% decline this week while AUDJPY traded at 78.45 and NZDUSD traded at 0.6848 while NZDJPY at 63.57 halting two days of gains as Asian mining stocks fell, damping demand for higher-yielding assets. AUDUSD headed for a weekly decline before a report forecast to show the US economy added the most jobs in May since 1983. The market is still looking to sell equities on rallies and the EUR isn't able to bounce, having a negative effect on the Aussie and Kiwi while a strong payrolls number may be negative for equities and negative for risk currencies while helping the USD strengthen. Demand for AUD weakened as metals prices slid after China's plans to curb its economy threaten to reduce demand for copper after prices slumped 15% in two months. Demand for NZD may be bolstered by speculation the RBNZ will raise interest rates from a record low when it meets on June 10.

The EURUSD dropped 0.7% to 1.2163 from 1.2249 yesterday, after trading as high as 1.2327 and EURJPY fell 0.1% to 112.76 approaching a four-year low as signs that Europe's sovereign-debt crisis will damage the region's banks and slow its economic growth boosted the USD's refuge appeal. The EUR dropped against most of its major counterparts on speculation the ECB will provide more liquidity to the financial system. The EUR also fell as retail sales in EU tumbled 1.2% (prev. 0.5%), the biggest drop since October 2008. The ISM non - manufacturing index held at 55.4, initial jobless claims dropped to 453,000, more than predicted while ADP Employer Services showed addition of 55,000 jobs, fewer than forecast. Factory orders in Germany due on June 7 probably fell 0.2% in April, evidence that the debt crisis is taking a toll on the EU economy.