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EUROZONE ISSUANCE

EGB Supply for W/C Jul 26

USDCAD TECHS

Pullback Considered Corrective

US TSYS SUMMARY

What a Short, Strange Trip It's Been

GLOBAL POLITICAL RISK

Pfizer, Moderna Jabs Retain High Trust; AZ, Sputnik Lower

AUDUSD TECHS

Trend Indicators Remain Bearish

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Spot last deals ~10 pips softer at Y110.85, with G10 FX pairs generally sticking to relatively tight ranges during Thursday's Asia-Pac session.

  • The JPY continued to be the funder of choice on Wednesday, allowing USD/JPY to register fresh YtD highs, with a modest extension to Y111.12 witnessed ahead of Thursday's Tokyo fix before the pair faded from best levels. A more tentative round of trade for equities has seemingly limited follow through over the last 24 hours or so.
  • A quick reminder that as the 2021 high/technical bull trigger was broken through (Y110.97) on Wednesday, a flurry of demand prompted a Y111.10 print. However, a lack of follow through resulted in a sharp reversal in fortune with no headlines behind the move. The JPY lurch higher coincided with sizeable spike in JPY futs volumes, with just shy of 2,000 contracts changing hands inside 60 seconds at 1236BST/0736ET, roughly $225mln cash equivalent. USD/JPY then retreated back to Y110.66. The then pair spent the majority of the session grinding back towards the Y111.00 mark.
  • Initial resistance is now located at today's Asia high, with any break there set to expose resistance in the form of the 26 Mar '20 high/1.0% 10-DMA envelope (Y111.30/32). Initial support is seen at the 21 Jun low (Y109.72)
  • There are plenty of notable option expiries rolling off at today's 10AM NY cut: Y109.95-110.00 ($2.1bn), Y110.65-75 ($1.3bn-USD puts), Y111.20-30 ($1.8bn), Y111.75 ($1.4bn).
  • The proximity to the expiring options with strikes of Y111.20-30 may be providing some headwinds for the cross.