Technical Analysis: EUR/USD, GBP/USD, USD/JPY, and USD/CAD

European leaders urged Greek Prime Minister George Papandreou to swiftly spell out how he intends to stick to the terms of a bailout plan after he handed voters a veto over the week-old package.Crisis talks  were under way in the French resort of Cannes on the eve of a Group  of 20 summit after Papandreou was summoned by European counterparts to explain his call for a referendum that risks delaying aid the country needs to avert default. In Athens, Greek lawmakers debated a confidence motion that could bring down his government.The stewards of the euro “won’t accept” a break from last week’s agreement, Luxembourg Prime Minister Jean-Claude Juncker told reporters in Cannes. German Chancellor Angela Merkel said “we have to get to the point where we know exactly what comes next.” The confusion sowed by Papandreou threatens to unravel an    Oct. 27 crisis-fighting strategy and may scupper Europe’s hopes of using the G-20 meeting as a showcase for that plan and to seek financial assistance for their efforts. The summit will open officially tomorrow with a lunch-time discussion on Greece and the euro-area debt crisis.



GBP/USD

U.K. stocks rose, rebounding from the biggest three-day drop since September, before leaders from the Group of 20 meet in France to tackle Europe’s debt crisis.Randgold Resources Ltd. led a rebound in commodity producers, climbing 7.7 percent after the company forecast higher gold production. Xstrata Plc and Antofagasta Plc both rallied more than 4 percent as base metals advanced. Next Plc jumped 6.5 percent after the retailer reported faster sales growth.The benchmark FTSE 100 Index  jumped 62.53, or 1.2 percent,to 5,484.1 at the close in London, after earlier falling as much as 0.7 percent. The FTSE All-Share Index rose 1.1 percent, while Ireland’s ISEQ Index gained less than 0.1 percent.“So often in the past we’ve seen markets rally ahead of important meetings,” said Angus Campbell , head of sales at Capital Spreads in London. “Today is a classic example of optimistic buying ahead of a major meeting of global leaders.”The FTSE 100 had tumbled 5.1 percent over the previous three days as investors awaited details of how euro-area leaders will fund the expansion of the region’s rescue fund to 1 trillion euros ($1.4 trillion) and as Greek Prime Minister George Papandreou called a referendum on the latest bailout.Policy makers held emergency talks today on the eve of the G-20 summit in Cannes, France, and may tell Papandreou there is no alternative to budget cuts imposed in the bailout plan hammered out last week.



USD/JPY

Japan, the second-largest foreign lender to the U.S., will probably boost Treasury-bond holdings to an all-time high after selling yen and buying dollars this week to weaken its currency from record strength.The CHART OF THE DAY  shows Japan’s holdings of Treasuries surged after the previous three times starting September 2010 it intervened to curb yen gains. Japan may have spent record amounts this week in driving down the yen by as much as 4.6 percent on Oct. 31, after the currency touched the highest since World War II. Japan’s stake in U.S. government securities rose 2.4 percent to $936.6 billion in August, according to U.S. Treasury Department data. “Japan intervened in the market against the dollar so their Treasury holdings should rise dramatically again,” said Tomohisa Fujiki, an interest-rate strategist in Tokyo at BNP Paribas Securities Japan Ltd. “Intervention should support Treasuries.”The Bank of Japan’s projection of deposits held by financial institutions at the central bank indicated that about 8 trillion yen ($102 billion) was spent by the central bank in the Oct. 31 intervention, said Yuichi Takahashi, a market economist at Totan Research Co. in Tokyo. An outlay of that size would be the largest ever, based on Ministry of Finance data going back to 1991.Japan sold 4.51 trillion yen for its August intervention,according to the Ministry of Finance. The yen’s decline to 78.17 per dollar on Oct. 31, its biggest daily drop since the government stepped into foreign-exchange markets in September 2010, came after the currency climbed to a record 75.35 earlier that day. It traded at 78.05 as of 5:52 a.m. in Tokyo and has strengthened 4.1 percent over the past six months.



USD/CAD

Canada’s dollar  rose from the lowest level in almost two weeks on increased demand for riskier assets after the Federal Reserve acknowledged U.S. economic  growth “strengthened somewhat” in the third quarter.The Canadian currency tracked North American stocks and commodities including crude oil as European leaders prepared to tell Greek Prime Minister George Papandreou after his call for a referendum that he has no alternative to the budget cuts imposed in the region’s bailout plan.“The main issues for the loonie are still oil, which is down from its highs, and worries about Greece,” said Rahim Madhavji, president of Knightsbridge Foreign Exchange Inc. in Toronto. “You can feel confident the Fed will do something if things get bad.”Canada’s currency , known as the loonie for the image of the aquatic bird on the C$1 coin, climbed for the first time in four days, appreciating 0.7 percent to C$1.0136 per U.S. dollar at 5 p.m. in Toronto. It slid earlier to C$1.0224, the weakest level since Oct. 20. One Canadian dollar buys 98.66 U.S. cents.