Currency Tech

EURUSD R 2: 1.3216 R 1: 1.3030 CURRENT: 1.2940 S 1: 1.2753 S 2: 1.2516

USDJPY R 2: 89.15 R 1: 88.00 CURRENT: 87.45 S 1: 86.96 S 2: 86.23

GBPUSD R 2: 1.5730 R 1: 1.5585 CURRENT: 1.5479 S 1: 1.5336 S 2: 1.5247

AUDUSD R 2: 0.9117 R 1: 0.9036 CURRENT: 0.8975 S 1: 0.8870 S 2: 0.8783

Market Brief

The Yen has been weaker this morning as risk sentiment encountered a nice boost on a combination of positive data. First off, growth data from South Korea's showed an increase in GDP to 1.5% from the previous three months (analysts' expectations were for an increase of 1.3%). The Korean Won appreciated as much as 0.50% against the Greenback and the optimistic growth figures sees another Asian nation (Korea now joins Thailand, Malaysia and India) under pressure to have a re-look at overnight rates during Q3. Secondly, export data from Japan showed that their exports rose 27.7% in June from a year ago, whilst analysts were expecting a gain of 23.5%. Asian equities bounced on these renewed build-ups in risk sentiment and the Nikkei 225 was 72.70 pts higher at the time of writing. Finally, results from the recent European bank stress tests may have released some pressure which were weighing down markets from the past few trading sessions, although the true reaction will be seen in the European session later today. The combo of optimistic news has seen the Yen weaker across the board; the EURJPY hit a seven week high of 113.48 and the USDJPY hit a ten day high of 87.79. The AUDJPY cross was also higher, peaking at 78.72, and the AUDUSD was relatively stable at 0.8950 levels following the release of the producer price index number which showed a contraction during Q2 on both the QoQ and YoY reading (0.3% act v 0.8% exp & 1.0% act v 1.5% exp respectively).Next up we will have the European opening in which we will get a more proper gauge as to how our European counterparts will digest Friday's stress test release. Recall the results were released following the closing bell in Europe and although the US markets did close higher on Friday (the Dow closed 1.00% higher while the S&P closed 1.1%), these gains were more likely attributed to better earnings results rather than the stress test results. Later we will have the release of the new home sales data from the US at 1400 GMT.

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