Cable takes out 1.4500/Mar highs, but with limited follow through as yet. JPY lows bottom out ahead of 112.00 and ahead of the BoJ. Pre FOMC trade cautious anticipated.
A familiar Monday session, with cagey trade seen in most FX pairings ahead of the multiple event risks ahead, headlined by the FOMC meeting on Wednesday. The BoJ meeting on Thursday is now expected to produce fresh stimulus measures, but this did not stop some profit taking going through, with 111.90 highs in Asia retraced through 111.00, but losses shallow from here despite Wall Street trading in the red. The crosses have been following in kind, with the exception of GBP, which has seen a firm bid tone develop in the wake of president Obama’s backing of UK remaining in the EU. Along with the polls moving towards a vote to stay, specs pushed cable higher, taking out the 1.4500 level and also the mid-March highs at 1.4514. Stop loss buying through here was limited, so a pullback seen since, but the mid 1.4400s finds fresh demand. EUR/GBP lows from Asia held though, and we may see a near term top in place. Elsewhere, AUD trade was extremely tight in the low .7700s, with bids coming in under this figure level. CAD is a little livelier, though the spot rate is finding good sellers above 1.2700, but strong bids below 1.2650 as oil prices are starting to look a little heavy – in spite of ongoing verbiage from the major oil producers. Data was thin on the ground, with a slightly softer IFO, but was of little consequence to EUR trade.