Previous session overview
  • The dollar is up against the euro and lower against the yen Monday as markets lose hope for any significant progress at the upcoming Group of 20 meeting, U.S. car makers appear on the verge of bankruptcy and banking sector fears loom.
  • The euro fell to more than a one-week low of USD1.3158 and a two-week low of JPY126.43, while the dollar declined as low as JPY95.96 overnight, also a one-week low.
  • This all comes ahead of the European Central Bank meeting on Thursday, which may be encouraging traders to hold back on investing in the euro until its outcome becomes known.
  • Sterling holds its ground after the latest BOE competitive reverse gilt auction is covered 2.03x against 1.4x at the same event last Wednesday. GBP USD is unchanged after the auction results at USD1.4153; however, the pound is a little stronger against the single currency, with EUR GBP trading down to the day’s low of 0.9279 from around 0.9287.
  • Monday morning in New York, the euro was at USD1.3193 from USD1.3298 late Friday, while the dollar was at JPY97.05 from JPY97.91. The euro was at JPY128.05 from JPY130.20. The U.K. pound was at USD1.4202 from USD1.4286, and the dollar was at CHF1.1487 from CHF1.1438.
  • Leaks of the draft G20 communique indicate there won’t be a fresh round of coordinated stimulus spending coming from the April 2 summit.
Market expectation
  • Pound easing lower again looks set to challenge support at USD1.4135/30. Through here and rate can extend to retest earlier lows around USD1.4110, with demand noted between here and USD1.4100. This area seen as the last hurdle before a challenge can be seen on strong support levels at USD1.4085 and USD1.4065.
  • EURUSD notched a low at USD1.3118 before rebounding on some modest bargain hunting, the pair not seeing massive volumes on the slide, traders say. Focus now on the USD1.3100 area of tech support, the level the euro was roughly trading at as the FOMC announced QE, the news that set the pair screaming higher on March 17.
  • The dollar is not quite a yen lower on the day near JPY97. It’s technically weak on the daily chart below JPY97.13 and so is likely to dip to JPY95.99-JPY95.33 support. If trades are stopped above JPY97.13 expect a move up to JPY98.11.

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