EUR/USD
The pair finished the session lower after Moody’s Investor Service said that rising French bond yields increase the fiscal challenges facing the nation which in turn resulted in renewed yield spread widening in respect to the benchmark German Bund. In other news, ECB’s Nowotny did not discount that the central bank may cut the borrowing rate in December, while the Bundesbank slashed its growth forecasts. Separately to this, German Economy minister Roesler continued to depress speculation that the ECB will boost size of bond purchases, adding that the ECB isn’t responsible for buying the Euro-zone’s debt because the EFSF was put in place to help peripheral countries reduce interest rates on their debt. Touted selling by Middle Eastern and Eastern European names was noted as the main driver of the move lower during early EU trade, while speculation of renewed bond buys by the ECB is the closing stages meant that the pair was able to stage a decent rebound. In terms of technical levels, supports are seen at 1.3421, 1.3346 and then at the 21Day Lower Bollinger Level at 1.3337. On the other hand, resistance levels are noted at the 10DMA line at 1.3584 and then at 1.3615.
The pair finished the session sharply lower as market participants continued to fret over the stability in the Eurozone. The risk averse sentiment was also augmented by touted selling by a UK clearer. In terms of the UK specific commentary, according to Rightmove, UK home sellers cut asking prices by the most in a year this month as the escalation of the Euro-area crisis deterred buyers and increased uncertainty about the outlook for the economy. Elsewhere, press reports indicated that the number of shoppers heading to UK high streets slumped last month by its biggest amount since the heavy snowfall last December. A sharp north-south divide is also developing, reinforcing fears for the key Christmas period. Finally, technical supports are noted at 1.5613 which is also the 61.8% retracement of the 1.5270-1.6167 move, followed by 1.5545. On the other hand, resistance levels are seen at the 55DMA line at 1.5789, followed by 1.5871 which is the 10DMA line.
The pair finished the session little changed as traders continued to look for safety which in turn boosted the USD, up 0.6%. Of note, minutes of its Oct. 27th meeting showed that some BoJ board members warned of a small risk that Europe’s debt crisis would develop into a repeat of the Lehman shock and hit Japan’s economy. One board member Miyao proposed topping up the asset buying scheme through a bigger JPY 10trl increase in JGB purchases. Some board members said that buying government bonds with short maturities was an effective tool in stabilising exchange rates.