FX Views (Asia): USD See-Saw Ride Continues

As markets in Tokyo kicked off the end of the trading week, USD appeal vs. JPY persisted but ceased to exist against the rest of G10 FX – yen down about -.2%, kiwi up close to +0.5%, & aussie higher by about  +0.3% versus the greenback, at time of writing.

Earlier in NY, Greek bailout optimism and positive US data jumpstarted the current risk rebound but officials’ commentaries in the Asia a.m. boosted NZD/USD, AUD/USD, and USD/JPY gains:

* RBNZ's Bollard said economic performance understated & GDP could be 10% higher
* AU Treasury's Parkinson: Hard to see fall in Aussie & AUD likely to stay at current level
* JP Fin. Min. Azumi says he plans to strengthen cooperation on Europe issue
* BOJ Jan 23-24th meeting minutes showed members agreed further policy easing was needed.

China’s MNI February Flash Business Sentiment Survey added more fuel to the ‘risk on’ fire (data compiled by Market News International released exactly one week earlier is based on about 80% of the official survey):

* Overall Business Conditions suggest a rise 58.16 from 55.95 in Jan.
* New Orders suggest a rise to 63.54 from 60.92 in Jan.
* Production fell to 58.45 from 60 in Jan.

G10 FX: USD broadly offered despite Dallas Fed Pres. Fisher’s comments negating early QE3 implementation – ‘Fed adjusts policy on economic developments’, ’Fed adjusts policy on economic developments’, & ‘Fed members will take note of improved data'. Unsubstantiated headlines suggesting a bond swap of the ECB’s current holdings for new ones has buoyed sentiments but could be setting up for disappointment if such reports remain unconfirmed.

JPY softer with USD/JPY now resting just above the 79.00 figure, likely a result of both $/¥ long interest from the spec community and decent $/¥ supply from liquidations of hedges by Japanese investors. Meaningful resistance may be found on an approach towards weekly Ichimoku cloud tops up around 79.70/75.

* Update - Potential stops from FX VIEWS: Greece on the front page but JPY price action dominating behind the scenes...posted 02.10.12 for USD/JPY short levels triggered for a total loss of about -110 pips.

NZD well bid vs. USD to around the 0.7375/80 pivot, also the Feb. 13th highs, but losing some positive momentum into the 0.764 fib level (0.8425 to 0.8240 decline) around 0.8380/85. Immediate support may be found around the convergence of the 55, 100, & 200-hr SMAs around 0.8330 which looks to be the next key downside pivot.

 * Update - Potential NZD/USD short positions from FX VIEWS: A diamond in the rough for kiwi shorts?...posted 02.15.12 around 0.7375 slightly in the black by about +10 pips.

EUR mostly unchanged against USD since the Friday open around 1.3130 as the pair failed to post hourly closes above its 100-hr SMA for the ninth time in as many hours. Asian sovereigns rumored to have offered EUR/USD around 1.3150.

* Update - Potential EUR/USD shorts from FX VIEWS: Greece assisting, risk missing, & USD rebounding...posted 02.14.12 for a half a position at around 1.3150 (remaining half around 1.3225 never met) slightly in the back by approximately +20 pips at the moment.

GBP for the most part hasn’t taken part in the USD sell-off seen during Friday’s Asia session. Furthermore, the technical picture evidences some slight negative divergence on 1-hr charts. Momentum (RSI) has moved lower since NY market hours despite marginal price increases suggesting elevated technical potential for GBP/USD weakness to follow. Fundamentally, UK Jan. Retail Sales is due out at 0930GMT which may see GBP longs lighten positions ahead of the key data release.

* Update - Potential GBP/USD shorts last updated in FX VIEWS: FED, ECB lax policy...posted 01.27.12 about -55 pips in the red but upside stalling ahead of the 0.618 fib level for the 1.5925/1.5645 decline.

AUD firmer but upside has stopped just short of the 1.0800 figure so far. Decent demand near the 200-hr sma around 1.0750 supported the pair earlier in NY.

EM FX: Seemingly improved prospects for a Greek bailout supporting EM ccys against USD & EUR. However, any setbacks in Athens could see USD pare Thursday’s losses although there still remains some scope for further EUR downside vs. the EM FX space as it would increase the chances for hard Greek default sooner rather than later.

TRY: Mounting Greek bailout optimism underpinning TRY strength. EUR/TRY was soundly rejected by the 21-day SMA ahead of the 2.3400 figure as the pair bears down on the psychologically significant 2.3000 figure ahead of the technically key 2.2940 multi-month lows.

* Update - Potential EUR/TRY shorts from Emerging Markets FX Insider posted 25. Oct. 2011 and last updated in Emerging Markets FX Insider - Low U.S. & Euro...posted 02.07.12 at around 2.4750 are currently about +1650 pips in the black alongside positive carry value since Oct. 25th 2011.

SGD: Singapore's Jan. Electronics Exports plummeted -10.9% y/y vs. expected -7% and non-oil exports fell -2.1% vs. expected -1.6% y/y. USD/SGD rejected on nine consecutive hourly attempts back above broken trend-line support & now resistance (currently 1.2625) since Thursday’s Asia open. The 100-hr sma (currently 1.2610) also comes in near the stubborn trend-line, potentially creating a pocket of s/t technical resistance around the 1.2610/25 zone.