Currency Tech

EURUSD R 2: 1.2250 R 1: 1.2025 CURRENT: 1.1970 S 1: 1.1780 S 2: 1.1640

USDJPY R 2: 95.00 R 1: 93.70 CURRENT: 91.65 S 1: 89.00 S 2: 88.00

GBPUSD R 2: 1.4725 R 1: 1.4550 CURRENT: 1.4500 S 1: 1.4320 S 2: 1.4140

AUDUSD R 2: 0.8575 R 1: 0.8380 CURRENT: 0.8193 S 1: 0.8060 S 2: 0.7960

Market Brief

The JPY weakened against all of its most-traded counterparts as Asian equities ended two days of losses, boosting demand for higher-yielding currencies. The USDJPY gained after Fed Chairman Bernanke said the US recovery is moving at a moderate pace. The Fed will raise its benchmark interest rate from a record low before the US economy returns to full employment or inflation surges, Bernanke said adding that the US economic recovery began sometime last summer. He also added that the US economic recovery is moderate-paced, boosting investor confidence after concern over Europe's debt crisis drove US stock indexes to seven-month lows. The US has supplanted China and Brazil as the most attractive market, with investors betting money on Obama's leadership of the US economy. EURJPY rose as he said the region's leaders are committed to avoiding a default and their bailout plan covers the obligations of Greece, Portugal and Spain for a number of years. The USDJPY rose to 91.69 while EURJPY climbed to 109.68 after touching 108.08 yesterday, the strongest since November 2001. Nikkei 225 rose 0.4%, Kospi gained 1%, Shanghai Composite Index added 0.3% and S&P/ASX 200 Index advanced 1%.The AUDJPY rose 1.3% to 75.01 while AUDUSD gained to 0.8191 and NZDJPY advanced 1.2% to 60.88 while NZDUSD strengthened to 0.6638 snapping a two-day drop as gains in commodities prices and Asian stocks revived demand for higher-yielding currencies. The NZDUSD also gained amid speculation the RBNZ will raise the cash rate to 2.75% from a record low 2.50% on June 10, according to majority of economists. The kiwi's decline below 0.6600 yesterday suggests the market does not see a potential rate hike as providing much lift to the currency. The Aussie still headed for the biggest quarterly loss since 2008 as a report showed business confidence fell 8 points to 5, below its average of 7 points for a third-straight month. The AUDUSD has dropped 11% this quarter, the most since the last quarter in 2008. The currencies advanced as crude oil rose for the first time in three days after Bernanke's comments on the US recovery and after Hungary's government pledged to control its budget deficit, easing concerns it faces a Greece-like debt crisis. RBA's Jillian Broadbent said today the nation's economic recovery has been V-shaped and that there remains considerable uncertainty over the global economy.

The EURJPY rose to 109.67 after touching 108.08 yesterday, the weakest since November 2001 while EURUSD traded at 1.1962 after it sank as low as 1.1877, the weakest since March 2006 and commodity producers led Asian stocks higher after Fed Chairman Bernanke said the US economic recovery is intact. The EURUSD pared this month's drop as its RSI yesterday fell under the 30 threshold that indicates a currency may have fallen too rapidly and a reversal may be imminent. The EUR is starting to look oversold and getting into a strong support zone between 1.16 and 1.20, which suggests a bounce. Parity between the EUR and the USD is unlikely, Portugal's Economic Minister said today. Gains in the EUR were limited as forecasts suggest the ECB will leave its interest rate at a record low 1% until the Q2 2011. The ECB is going to leave rates lower for a lot longer while in the meantime the market is speculating on when the Fed is going to be hiking rates as they next meet on June 10.