Markets open the week with a a slight tone of risk-off despite an RRR cut from China, and constructive data from the US from the positive week with Core CPI tracking higher, and PCE, the Fed’s preferred measure of inflation following suit. USDJPY is currently negative as of the weekly open, finding offers at 114.00, bringing spot down to a current level of 112.30. Key levels for the yen are the 114.80 high, and the 111.00 level, in which the BoJ was rumoured to have sold JPY to reduce the pace of the appreciation at peak deterioration of sentiment, which was also defended last week. The AUDUSD remains relatively flat, hovering around the weekly open post RBA announcement, after announcing no change, with spot currently trading at 0.7125. Resistance for the Aussie is sighted at 0.7250 with lows in the near term at 0.7080 as support. Akin to the AUD, the NZDUSD pair has been flat across the weekly open so far, currently rangebound between 0.6560 0.6750.
In regards to European FX, the EURUSD has traded lower from the range breakout seen in early February, and returned to trade in the range, with spot currently at 1,0885, offered off the back of expected increased dovishness from the ECB from Monday’s soft EU CPI release. 1.1050 is near term resistance, with support sighted at 1.0800. For cable, price action in spot has been stabilizing post-brexit referendum shocks, and extreme skew on the options side, with spot now currently trading at 1.3940, pulling back from 1.3840 lows. Highs at 1.4000 presents as short term resistance. The combination of a retracement from Brexit risk premium pricing in, and EUR downside has brought the EUR/GBP cross lower also, with highs set at 0.7930 and spot currently trading lower to 0.7800; nearest support seen at 0.7720.
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