The USD was bid overnight in Asia with EUR/USD falling to test new intra week lows and USD/JPY pushing up to 112.50. This price action was steadily reversed over night, with risk sentiment coming into play as Europe came to market.
Safe haven flows into JPY aided by cross flow in EUR/JPY helped push JPY/USD to Monday’s low print – which lies in the 111.60s. This level was retested later on in the session but rejected as US stocks received a bid roughly an hour after the Wall street open. USD/JPY has a key support level 30 pips or so below the Monday’s – with real money waiting round this area – but whether or not we test will be at the mercy of sentiment in stocks this week.
Much focus was on the DoE’s after last night’s monster API build, the headline figure was also large (13.8mln) but the price action was not one as one might expect and WTI and Brent more than pared the API inspired losses. Crude was still bid when Europe began to filter out of market – sentiment is still clearly bullish crude and today's price action is demonstrative of this.
Looking ahead tomorrow’s highlights include: US Initial Jobless Claims and comments from BoE Governor Carney, Fed's Evans and Bullard.