Talking Forex Daily Wrap: November 20, 2013

EUR/USD
The pair finished the session sharply lower after it was reported that the ECB said to weigh -0.1% deposit rate if more easing needed. As a result, the Euribor curve bull flattened and 6-month EONIA fwd rate fell to its lowest since early June. Earlier in the session it was reported by Die Zeit that the ECB wants to start publishing governing council meeting minutes soon. Separately, ECB's Weidmann said that there is no easy way out of crisis, printing money definitely not the solution. He also stated that it is not sensible to immediately embark on next round of monetary policy easing after November rate cut, but also added that the ECB technically not at the end of its options.

GBP/USD
The release of dovish minutes from the most recent policy meeting by the BoE failed to weigh on GBP, which instead was driven by touted US names selling the EUR/USD and also reports late in the session that the ECB said to weigh -0.1% deposit rate if more easing needed. The minutes of the most recent MPC meeting revealed that the MPC voted 9-0 to keep QE unchanged at GBP 375bln and 9-0 to keep interest rates unchanged at 0.50%. Furthermore, MPC believe that growth and inflation projections underline there could be a case for not raising bank rate immediately when 7% threshold hit. Technical studies indicate that support levels are seen at the 30DMA line at 1.6065 and then at the 10DMA line at 1.6059. On the other hand, resistance levels are seen at 1.6207/35 and then at 1.6250.

USD/JPY
The USD/JPY failed to benefit from the reports citing an advisory panel which said that Japan’s GPIF should review domestic bond-focused portfolio and that foreign asset ratio should be raised and instead was driven by option related flow. In particular, the 100.00 level said to have been in good size. Of note, the Head of the GPIF Advisory Panel Ito says new law to reform GPIF can be written by spring 2015. In other Japan specific commentary, Japanese trade balance showed the largest trade deficit on record for the month of October, although the Exports were seen at their highest level since 2010. In terms of technical levels, supports are seen at 99.20/14 and then at 99.10. On the other hand, resistance levels are seen at 100.26/39 and then at 100.62.