GBP/USD today

The greenback is weak across the board. The GBP/USD pair is breaking above a declining channel resistance just like the EUR/USD. It is looking to rally to the previous high near 1.5500, and may extend to 1.5700.

EUR/USD today

The EUR/USD is surging towards 1.30/1.31 area as noted in yesterday's post. The European session saw the EUR/USD surge more than 100 pips. This came after some consolidation in the Asian session.

EUR/USD tumbling to fresh 4-year lows

The German naked short-selling ban has triggered concerns that the crisis in Europe is one of yet unimagined scope and size, says Trader. This has sent EUR/USD tumbling to fresh 4-year lows, and the trader says selling on any rally is favored ahead of a break below 1.2000. EUR/USD now at 1.2200.

GBP/USD ...Today

GBP/USD breaches key 1.4860 support and slips quickly to 1.4840. Trader chartists say a sustained break of this level calls the end of GBP/USD's recovery from its post-election lows of 1.4450, and opens risk back towards this area. The spot now trades at 1.4847.

GBP/USD ...a veiw

GBP/USD reversed sharply to the downside Wednesday after the BOE's dovish Quarterly Inflation Report notes trader. The trader says the spot has key support at 1.4860 and failure here will confirm that the recent rebound is complete, 1.5055 was a corrective top and a decline back to last week's 1.4475 lows is underway. Further out, the trader remains bearish on GBP/USD looking for a move towards 1.2800 in the 1Q of 2011. GBP/USD now at 1.4870.

GBP/USD ...todat

Allow for near-term corrective upside in GBP/USD says trader, with risk seen toward 1.5120 and possibly 1.5290. However trader remains long-term negative on the spot with targets of 1.4370 and 1.4255, the latter being the last line of defence ahead of the 2009 low of 1.3500. GBP/USD now at 1.4988.

GBP/USD downside risk toward 1.4700

GBP/USD remains in a clearly defined 1.51 to 1.5550 range notes trader with its 21 DMA at 1.5340 continuing to be a pivot point. While below here the trader says there is a high probability of a downside break which would be a serious blow for sterling bulls as it opens downside risk toward 1.4700. GBP/USD now at 1.5184.

EUR/USD outlook is bearish

There may be some upside in EUR/USD as the Greece story pauses, says trader, but the medium term outlook is bearish. Says EUR shorts may well scale down positions as the austerity package looks credible and as uncertainty gradually drops, especially if German lawmakers approve the deal. However, says the euro area still needs a weak currency and low key rate for long to survive. Thus targets 1.2500 in six months. EUR/USD stands now at 1.3235.

euro down trand

The Greek bail-out package may have been agreed over the weekend, but there are still reasons to believe in a stronger USD despite this solution, says trader. Says the balance sheet of the Fed is about to turn, ie the selling of mortgages and a decreased supply of dollars. Adds the market might want to hold on their dollars, which could be why the month end buying of EUR didn't occur this time. Thus doesn't see risk aversion being the only prime driver of the euro. EUR/USD now at 1.3232.

trend

The USD is slipping as the EUR continue to bounce on hopes that the details of Greece's bailout package will be announced over the weekend. Reports that Greece is signing up to a EUR24bn austerity package and assurances from European Commission President Barroso that a deal is close helped sentiment. The immediate focus is now on U.S. 1Q GDP data 1230 GMT. This should confirm that the recovery is on track with the economy expanding by 3.3% annualised. The JPY came under pressure as the BOJ singled further monetary easing even though its inflation forecasts suggest that deflation is coming to an end. The USD is up at Y94.18 while the EUR is up at $1.3297. The GBP is up at $1.5378, helped by opinion polls showing that the Conservatives are taking a more commanding lead ahead of next week's general election. This could reduce fears of a hung parliament.

USD/JPY's moving averages

USD/JPY's moving averages are back to bullish and with prices holding above these this week a cautious upside probe should be allowed for either today or Monday says trader. However she cautions to watch for signs of topping in the rate and for a trading strategy favors selling around 94.00, with a stop above 94.85 for downside targets of 93.60 and 92.60. USD/JPY now at 94.15.

GBP/USD fairly quickly toward 1.5500

GBP/USD has so far failed to test the 1.5400 tag Friday but any move above here is likely to see stops triggered which could propel the rate fairly quickly toward 1.5500 says a trader. He favors buying between 1.5375 and 1.5325 with a stop below 1.53, taking profit ahead of 1.55 where he says small shorts may be worth a look. GBP/USD now at 1.5370.

EUR/USD continues to decline

EUR/USD continues to decline, with EUR/JPY also recently hitting intraday low, as risk flees markets on worries of Greek sovereign debt, which investors worry is also spreading to euro zone periphery, including Portugal, Spain and Italy, says trader. EUR/USD at 1.3285 from 1.3364 late Mon, according to EBS via CQG. EUR/JPY down more than 1.25% on day. "The situation there just continues to get worse and worse," Oubina said of Greece and the euro zone periphery.

EUR/USD DOWN TO 1.3000

As the Greek bail-out fails to give the EUR any serious support, Barclays Capital says it is looking for a slide to 1.30. The bank reckons that while there is a lot of risk premium factored into the EUR, the possibility of an imminent debt restructuring and associated contagion is probably not. "For now, we maintain our target for EUR/USD at 1.3000, under the assumption that Greece will pull through the April/May redemption period but that medium-term financing risks will keep the euro weak," the bank says. The pair is now at 1.3317.

EUR/USD pushes lower

EUR/USD pushes lower, as Friday's rebound after Greece asked for the bailout stalls. EUR/USD now at 1.3328, just off the day's 1.3317 low, and off the 1.3372 level seen late Friday in NY. The activation of the EMU/IMF package would add more uncertainties to already fragile markets, says BNP Paribas. Says Greece asking for the package is a sign of failure as private funds couldn't finance its deficit. Also, this will now put the focus on other countries, such as Portugal.

GBP rising vs USD

GBP rising vs USD, JPY due to buying from non-Japanese hedge funds, as they likely have many short positions that must be covered, say senior dealers at major banks in Tokyo. "There were still some investors who haven't been able to adjust their positions to market conditions after Sunday's Greece announcement," one says. Greek Finance Minister George Papaconstantinou said Sunday he expects final terms of IMF, EU rescue package to be ready by early May. But Mizuho Corporate Bank's senior dealer Satoshi Tate says it's too early to become bullish on GBP because risk from upcoming U.K. elections remains; if ruling party unable to maintain majority in parliament at coming elections, government may face difficulty eliminating budget deficit, a negative factor to U.K. bonds. Dealers say GBP/USD may rise to recent high of 1.5525 vs last 1.5450. GBP/JPY may rise to psychological resistance of 146.00 vs last 145.54.

Euro Today

The euro's descent against the dollar is accelerating, hitting a new low for the day at 1.3528 weighed by nerves over Greece. On a technical basis, a sustained break below 1.3483 would be negative. Now 1.3535.

EUR/JPY Today

EUR/JPY is retesting 125.00, which is the upper end of its range since February and also retracement resistance, says Trader. However, with very mixed technical signals around she favors playing the range by selling at 124.90 with a stop above 125.65, and taking profit down at 123.80 and 122.00. EUR/JPY now trades at 124.70.

EUR/USD ...Trend..Still weak

Chances are that the EUR/USD will get some near-term help from the Eurogroup's emergency funding pool for Greece and S&P's decision to drop the country from its negative watch list. But, warns Credit Agricole, "further out, the EUR is likely to weaken as the noose of fiscal/debt worries and relatively slower growth gradually tightens."

GBP/USD Today

GBP/USD made strong gains Tuesday and has started to erode its downtrend says analyst. It's now at 1.5255. The spot faces immediate resistance at 1.5275 and a break above here should trigger a deeper retracement toward 1.5575 and 1.5690. Alternatively, failure to overcome 1.5275 leaves the rate vulnerable toward Tuesday's low of 1.4975. GBP/USD now trades at 1.5215.

USD/JPY Eyeing 87.00

The USD/JPY continues to decline towards 87.00. Although the decline appears to be stalled at the moment, the stochastic shows that the momentum is strong, and along with price action, which broke a rising support, shows that further decline is likely.

Sterling drops

Sterling drops to the day's low pretty much across the board as BOE governor King kicks off his testimony to the TSC on a downbeat tone. King said risk to a gradual recovery are on the downside, recovery in the UK's largest export markets have stalled. GBP/USD drops to 1.5485 from around 1.5525, EUR/GBP hits the day's high of 0.8816.

Dollar Falls

The USD is falling after more dovish comments from Fed's Yellen reducing even further any speculation of a US rate hike. Attention will now focus on what Bernanke has to says Wednesday. The EUR is the main gainer as an unconfirmed report that the Dubai government is bailing out Dubai World with $5 billion lifts global sentiment. However, the single currency didn't get any help from the latest Ifo survey from Germany which declined a little rather than showing an expected improvement. The USD is down at Y90.91 while the EUR is up at $1.3662. The GBP is up at $1.5523.

Dollar Higher, Euro Lower

The USD is mostly higher and the EUR is mostly lower as the market waits to see if the meeting of Europe's finance ministers produces any more details of Greek package. News that Dubai World is still battling to reschedule about $22bn of debts is only helping a general rise in risk aversion. Japanese 4Q growth of 1.1% is better than expected but deflation remains a problem. The dollar is up at Y90.06 while the EUR sinks to $1.3595. GBP is down at $1.5669.

big week for UK data

It's a big week for UK data notes Trader with Tuesday's CPI likely to trigger an exchange of letters between BOE governor King and the Chancellor. Wednesday's MPC minutes should give more insight into the surprisingly dovish Inflation Report with labor market data also on the menu. Thursday brings public sector finances for January which are likely to be key to the full year borrowing requirement since this month is a particularly important one for receipts. Friday brings retail sales which are likely to be distorted by bad weather.

GBP/USD Today

GBP/USD ticking higher as sterling garners support from the strong February Rightmove housing price data, which showed asking prices have jumped by 3.2%, the biggest monthly move in almost three years. However, BNP Paribas notes viewer traffic declined, suggesting that higher asking prices are unlikely to translate into a lasting stabilization of the housing market. For GBP/USD the bank sees support at 1.5550, but says once this gives way then risk is toward 1.5220. GBP/USD now trades at 1.5686.

Dollar Gains...

All the fundamental dials turned in the USD's favor last week. Unexpected policy moves by China, disappointment over Greece and hints of higher U.S. rates will now ensure a more extended rally for the U.S. currency than even the most bullish had expected. Risk aversion has returned with a vengeance and the dollar's safe haven status is back.

EUR/JPY Today

EUR/JPY rising as Europe investors covering shorts, may extend gains to 123.50, says trader at Tokyo bank. Resona Bank dealer Keiichi Iguchi echoes view, saying "the euro had fallen very sharply in recent days, providing a window of opportunity for investors to cover shorts now." Other JPY crosses like AUD/JPY climbing in tandem; selling of JPY also pushing USD/JPY up.

EUR/USD Today

EUR/USD's selloff reached its channel bottom at 1.3540 and some near-term consolidation should now be allowed for says Trader. However, while the spot remains capped by double Fibonacci resistance at 1.3950-60 she says an immediate downside bias will remain with a target of 1.3405. For a strategy trader favors shorts from 1.3725, adding at 1.3805 with a stop at 1.3860, taking profit between 1.3580-60. EUR/USD now at 1.3722.

EUR/USD climb above 1.3730

EUR/USD rises as short-term players in Asia covering short positions, but unlikely to climb above 1.3730 given that sell-orders from Europe investors have been placed around that level, says trader at Tokyo major bank. Adds market could become subdued ahead of EU leaders' meeting on Thursday, limiting further gains for pair. Notes some players hope EU may find solution for sovereign debt worries in some member nations, but "the outlook is very uncertain and players seem unwilling to bet on one particular trading direction."

YEN is mixed

1-month ATM USD/JPY implied volatilities down slightly at 12.60%/13.30% vs 12.65%/13.35% as rise in spot market prompts some players to sell USD downside hedges. One player sold 1-week USD-put/JPY-call contract with Y89.30 strike price, face amount of $50 million, says options trader at major Tokyo bank. Says "the dollar-yen's outlook is mixed. So even if implied volatilities fall on spot gains, the pace of decline is likely to be moderate" as players may scoop up options on dips.

EUR/USD Today

The euro's over-two-month downtrend was extended earlier to $1.3647, but it has snapped back to trade as of this writing just below weekly resistance at $1.3740, which is now the nearest stop for intraday trades. New downtrend lows would point the euro to $1.3523. Take profit at $1.3582. If trades are stopped above $1.3740 then look for a move up to $1.3847.

GBP/USD Towards 1.5710

GBP/USD has blown away support at 1.5835 and the next target is the October 2009 low of 1.5710 says Trader. Below here 1.5625 should give support and may even trigger a rebound says the bank, otherwise any drop below 1.55 implies a major shift in sterling sentiment. GBP/USD now at 1.5766.

EUR/USD could towards 1.3485

A break of 1.3800 level in EUR/USD could trigger a move lower towards 1.3485, said Michael Hewson, market analyst at CMC Markets in London. "In the long term, the euro has potential to hit 1.3480 and even lower, but not ahead of (Friday's) employment report in the US," he said. The market is "fixated" on the sovereign debt problems faced by not just Greece, but Portugal and Spain, he said. "As regards the ECB, Trichet didn't really add anything new. He simply reiterated the old mantra of the stability pact." EUR/USD was at 1.3922 from 1.3905 late Wed.

ECB-decision press conference

In the post-ECB-decision press conference, Trichet stressed that the consolidated budget deficit of the euro zone, at 6% of GDP, remains well below the analogous figure elsewhere in the developed world. He cited IMF estimates that the deficits in both the US and Japan will be over 10% of GDP this year. Trichet had earlier sketched an outlook for the euro zone's economy that was identical in most respects to the one he presented a month earlier. He said growth is likely to stay moderate and uneven this year, thanks to rising unemployment, low investment and a high degree of uncertainty. The outlook for inflation, too, remains comfortable, Trichet noted.

EUR/USD ticked down

EUR/USD has ticked down to 1.3833 as ECB's Trichet reads prepared remarks on key euro zone interest rate, from 1.3849 before the press conf. Investors will be listening after Trichet's prepared remarks for any clues on how the ECB might address sovereign debt issues in Greece and other euro zone economies.

USD/JPY Trend 93

USD/JPY may rise above Wednesday's high at 91.28 later, vs 90.98 last, if U.S. weekly jobless claims for week through Jan. 30 due at 1330 GMT show improvement, "as the market's really focused on the U.S. jobs market as a signal for the timing of any Fed interest rate hike," says Shinichi Hayashi, FX dealer at Shinkin Central Bank. Ahead of  non-farm payrolls for January, expected to show no jobs lost compared to 85,000 shed in December, says "an improvement in the weekly claims, even though it's not a major indicator, would probably brighten the outlook for Friday's data." Jobless claims expected to total 460,000, down from 470,000 in previous week. Meanwhile, if payrolls do beat expectations Friday, says "dollar/yen could easily rise back above 93.00, which is where it was before the last payrolls report (released Jan. 8) brought the negative surprise that pushed it down."

EUR/USD downward pressure

While EUR may not see sharp swings vs USD,JPY for rest of week, as even after U.S. non-farm payrolls Friday, players may remain hesitant to place big bets before outcome of G7 Saturday, common currency may continue facing trouble next week, analysts say. "Once we get past the U.S. jobs report Friday and the G7 this weekend, the focus will return to the sovereign debt problems, and so I think the downward pressure will stay on the euro in the longer term," said Trader. On top of lingering concerns over Greece's fiscal problems, EUR-negative uncertainty over Portugal, Spain also mounting, dealers say.

EUR/USD Today

ECB rate call at 1245 GMT, Trichet press conference at 1330 GMT, may keep downward pressure on EUR/USD, with pair possibly targeting 1.3700 if automated stop-loss selling orders around recent low at 1.3851 tripped, says Hideaki Inoue, chief manager of forex and financial products trading at Mitsubishi UFJ Trust and Banking. ECB expected to keep policy rate at record-low 1.0%, Trichet expected to highlight rocky road to fuller euro-zone recovery. If EUR/USD does fall sharply, Inoue says that could weigh heavily on EUR/JPY, possibly dragging pair as low as 124.00 vs last 126.30. Meanwhile, says EUR likely to stay top heavy for rest of Asia session after worse-than-expected NZ unemployment data, Australia retail sales "have added to the overall negative atmosphere surrounding the euro."

EUR/USD Sell over 1.4000

The EU response to the Greek budget may help EUR/USD to blip over 1.4000. But, says Trader, start considering going short again over that threshold. "Both Greek credit default swaps and yield spreads indicate that EMU woes are far from receding," the bank says. The pair is now at 1.3977.

EUR/USD may 1.3900

The prospect of a drop in EMU services PMI in January will not help EUR/USD, says Trader. Aside from the Greek debt situation, the bank says equity markets have also encouraged the euro to slip. However, if the S&P can stay above the 1070 lows seen earlier in the week and the EU manages to cap concern over fiscal policy, EUR/USD may find support at 1.3900, the bank says. EUR/USD is at 1.3974.

AUD/USD move to 0.8000

It looks like China may have let out the last of the air out of the AUD's bubble. For most of 2009 the Australian currency forged ahead. But now, concerns over China are casting a long shadow and RBA rate hikes will come much slower than expected. Instead of staging a recovery back up to the $0.90 level the AUD may now be headed down to $0.80. AUD/USD is at 0.8883.

market today

EUR/USD marks fresh intraday high at 1.3990, rising on coattails of GBP/USD, which gains after automated buying orders from model funds triggered at 1.6010, 1.6020. Says "we could see a bit more of this kind of technically driven rise in euro-dollar, but the resistance should still be pretty heavy around 1.4000."

EUR/USD ....1.4050

EUR/USD up tad as slight rebound in Asian bourses (Nikkei closed up 0.3%) buoys demand for risk-sensitive assets; pair could rise further later, possibly to 1.4050, if European Commission tempers concerns over Greece's finances in official assessment due later of country's plans to shrink budget deficit, says Trader, senior FX dealer. "My feeling is that there's a greater chance that the commission may issue some kind of supportive statement about Greece today, and that would give the euro some (more) support." EUR/USD last 1.3968.

GBP/USD below 1.6100

GBP/USD testing, bouncing and closing above the 1.5880-30 area targeted by Trader, suggests strong demand in that area, says the bank. However, while the old-range lows near 1.6080-1.61 cap the rate and momentum lacks a bullish divergence signal, a move on the October low of 1.5710 could be seen later in the week. GBP/USD now at 1.5916.

USD/CAD Today

A key day reversal in USD/CAD Monday, accompanied by evidence of divergence, suggests there will be no breakout this week by USD/CAD from its 3-month trading range says Trader. The pair now trade at 1.0588. The bank looks for a shallow correction toward 1.0555-30 where signs of a base should appear and then be followed by another run toward the late November highs of 1.0750.

Coming G7

Currencies may be discussed during this week's meeting of the Group of Seven leading industrial nations, but exchange rates are unlikely to be at the heart of talks on the global economic outlook and the necessity to better coordinate macroeconomic policies, a French finance ministry official said Tuesday.




The official added that the G7 won't necessarily issue a final statement.



"These discussions will mostly be informal....it is possible that the G7 will feel the need to communicate on currencies, but it will only do so if it has a particular message to convey on exchange rates," the official said.



"Currencies will come up in the talks when issues of policy coordination are discussed," the official added.



Financial regulation will also be discussed, with the latest proposals by the Obama administration to curb the size of banks and their risks likely to feature high on the agenda, the official added.



The G7 meeting is taking place in Iqaluit, northern Canada, Feb. 5 and Feb. 6.

EURO no favors

The EUR will not get any more favors now, according to Forex Focus by Nicholas Hastings. As events later this week are likely to show, while hopes of a U.S. economic recovery are improving, the prospects for the euro zone will only get worse even if the European Union caves in and comes to Greece's rescue. Add to this a continued level of global risk aversion and a further decline in the foreign assets held by U.S. mutual funds and a EUR down at $1.3000 looks very likely.

AUD/USD Today

AUD/USD could come under further pressure from offshore though should find good support at 0.8500, says GFT strategist Boris Schlossberg. "The Aussie remains the highest yielding currency in the G-20 universe and will no doubt eventually find support at the 0.8500 level or below from longer term value players. For the time being however, the utter surprise of the RBA action is likely to pressure the unit with traders testing the 0.8700 figure, especially if risk aversion flows accelerate as the night progresses." Pair last 0.8791.

RBA keep rates at 3.75%

USD/JPY, EUR/JPY fall alongside AUD/JPY as AUD hit by RBA decision to keep rates at 3.75%, dealers say; move disappointed players who had expected bank to raise rates 25 bps. USD/JPY goes as low as 90.61, EUR/JPY to 125.85. Still, Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow, tips USD/JPY to be supported at 90.30 rest of day, EUR/JPY at 125.70; USD generally higher vs EUR, AUD after RBA outcome and that may help USD/JPY. Also says players waiting to see what Paul Volcker, chairman of Economic Recovery Advisory Board, has to say about newly-proposed U.S. financial regulations in testimony before Senate Banking Committee later.

EUR/USD could drop to 1.3000

EUR/USD could drop to the 1.3000-1.3500 range over the next few months, according to Steve Barrow, head of G10 strategy at Standard Bank. Concerns over Greek sovereign debt are likely to abate somewhat, but investors unwinding their longer-term positive bets on the common currency because of concerns over slow growth and fiscal issues in other euro zone countries will weigh on EUR/USD, Barrow says in a note to clients. "It looks as if euro weakness has almost developed a momentum of its own," Barrow says. EUR/USD was at 1.3923 from 1.3866 late Fri, according to EBS via CQG.

Next Friday's Payrolls

The markets are eagerly awaiting Friday's first showing of US 4Q GDP, and Lloyds Banking Group's economics team are looking for a 4.6% annualised rise. However, the bank asks whether it matters at all in the context of Wednesday's FOMC decision to keep rates lower for an extended period. Instead, the bank wonders whether next Friday's payrolls are key.

Yen move 95

Look for USD/JPY to push higher towards Y95 in one month, says Trader. Notes JPY is weakening after both the slightly-hawkish FOMC statement as well as the latest disappointing retail sales from Japan showing a 0.3% fall on the year last month - the 16th consecutive month of contraction. The pair is now at Y90.38.

EUR/JPY Today

EUR/JPY fell to it lowest level in nearly nine months Wednesday; however, Trader says there's more downside to come. Now at 125.60, she says a weekly close below the 50% Fibonacci retracement target of 125.65 should add to bearish momentum, which is already the strongest in a year. For a strategy, Elliott favors selling at market, adding at 126.50 with a stop above 128.55 for short-term targets of 124.45 and 122.45.

GBP/USD Today

GBP/USD has held up well since Tuesday's poor 4Q GDP showing, and a London-based trader says this is in no small part thanks to a large bid out of Asia around 1.61. On Tuesday the spot based at 1.6093, so far today the low has been 1.6113.

Yen .......... a veiw

USD/JPY likely to hold above 88.00 through end of February, as risk aversion surrounding China economic outlook not likely to last long, says FX analyst. "The yen may be rising now (versus the dollar) on worries about Chinese monetary tightening, but it's hard to imagine that China will rush to tighten monetary policy so sharply" as would choke off its economic recovery, he says. USD/JPY resistance over that period 93.00 vs last 89.23 on EBS. Meanwhile, if signs of U.S. economic strength emerge in weeks ahead, rekindling speculation for Fed rate hike later this year, USD/JPY in March could rise to 95.00 while unlikely to slip below 90.00.

IMF Outlook

The IMF presented a brighter outlook for this year, with the world economy forecast to expand at a 3.9% pace instead of the 3.1% estimate given in October. Global growth is expected to continue to pick up in 2011, with the forecast edging up to 4.3% from 4.2%. "Policies need to foster a rebalancing of global demand, remaining supportive where recoveries are not yet well-sustained," the IMF said in its update to the World Economic Outlook.

Focus Yen

Economic outlook for China, U.S., considered leading force in world economy, still key focus for markets, rather than S&P's cut to Japan outlook, says senior market economist. USD/JPY last 89.63, almost same levels before S&P's decision came earlier; pair hit 90.45 after S&P's remarks. Says "yen-selling caused by S&P's decision was largely limited. JGB players -- mostly Japanese -- are not in a rush to buy overseas assets for a flight-to-safety by selling (our own) country's debt and the yen." Amid uncertainty over possibility of China's additional monetary policy, U.S. banking regulations proposed by Obama administration, "investors are not in a position where they want to sell the yen, considered now as a safe haven." Says attention rather on how China, U.S. economic conditions will affect stock, currency markets down the road.

USD/JPY Today

USD/JPY sold off sharply ahead of its 9-day moving average at 90.79, but is still not oversold and momentum is decidedly bearish, says Trader. She now looks for a drop to the 61% Fibonacci retracement target of 88.25 some time this week, and to position for such a move would sell at market, with a stop above 90.65. USD/JPY now at 90.11.

EUR/JPY Today

EUR/JPY slumped to a near nine-month low of 126.12 in Asia Tuesday and Trader looks for more downside ahead. She says moving averages have crossed to bearish and although the cross is very oversold, bearish momentum is now at its strongest since April '09. While keeping an eye out for the authorities she favors small shorts at market, adding at 128.00 with a stop above 128.55, looking for 126.15, 125.75 and 124.35 on the downside. EUR/JPY now at 127.10.

Yen .......... a move

USD/JPY shoots up to around 90.20 from 89.60 after S&P cuts Japan sovereign 'AA' long-term outlook to negative from stable, but traders say JPY selling is knee-jerk and exaggerated by thin trading; USD/JPY likely doesn't have much more upside. Past Japan sovereign rating cuts haven't hurt JPY and other Japan assets for long, because majority of Japanese debt held by domestic investors who largely ignore rating agencies.

GBP/USD Rally

GBP/USD's upside correction is looking tired says analyst. The rally halted ahead of its 61.8% retracement target of 1.6460 Tuesday and while further gains toward the 1.6655-1.6745 pivot levels cannot be ruled out, analyst says this view is less likely. Instead, a break below 1.6230 would further alleviate upside pressure and open risk toward the 200 DMA at 1.6169 and then 1.6120 and the recent low of 1.5896. GBP/USD trades at 1.6272.

EUR/USD .......Trend

EUR/USD may be down, but it may not be out, suggests Trader. Points to the good reception for Greece's auction of 13-week T-bills Tuesday, suggesting investors are willing to give Greece and the euro the benefit of the doubt. Also, the bank's economic surprises index point to upside surprises for euro-zone data, but downside ones for US numbers. "The market seems too bearish on Europe's short term economic prospects compared to the US's," the bank says, suggesting PPI and housing starts data from the US later Wednesday could well bear this out.

Forex Focus : YEN

Once again, the JPY has been providing a safe haven in an uncertain world, according to Forex Focus by Trader. But, it is only a matter of time before the Japanese currency is stripped of its haven status and resumes its role as the carry trade funding currency of choice.

EUR/JPY Today

EUR/JPY's sustained drop below 130.00 Wednesday bodes ill for the cross, with key support at 129.00 already breached and 127.00 the next target, says Trader. Now at 128.90, Elliott favors selling rallies to 129.35 and 129.70, with a stop above 130.50 to target 127.25.

EUR/USD rally

Positive equities markets failed to offer EUR/USD a cushion Tuesday and the full break of its 200-day MA around 1.4300, and loss of key support at 1.4215 opens risk toward the August 14 low of 1.4080 says Trader. Now trading at 1.4181 and Trader says selling EUR/USD on any rally remains the theme, at least as long as EMU woes loom.

GBP/USD Today

The BOE minutes release, at 0930 GMT, should not reverse the GBP/USD bullish trend, which remains intact above 1.6240 support, says Trader. Topside the bank has targets of 1.6360 and key resistance at 1.6465, which capped Tuesday. GBP/USD now at 1.6260.

GBP/USD Today

GBP/USD has eroded resistance at 1.6348 and 1.6412 and skewed near-term risks to the upside says Analyst. She now sees potential toward 1.6480, 1.6655 and 1.6745. With the pair at 1.6414 she says the rate will stay bid intraday while above 1.6330, failure at the current rate though would alleviate immediate upside pressure and open risk toward the 200-day MA at 1.6160.

Bearish EUR/JPY

Bearish pressure has increased on EUR/JPY says Trader, however, the euro is now slightly oversold so the cross may hesitate around 130.00 Tuesday. That said Elliott still favors the downside and would sell at market, adding at 131.00 with a stop above 132.45 looking for short-term targets of 130.00, 129.60 and then 127.75. EUR/JPY now at 130.33.

The GBP's recent rally

The GBP's recent rally is totally unconvincing, according to Forex Focus by Trader. Much of the rise has been driven by hopes that the Bank of England will hike rates sooner than later. But, even if the central bank does tighten policy, this is hardly likely to be helpful for the currency in the longer run.

USD/JPY Today

USD/JPY support between 90.75-60 is holding out but with US yields falling sharply late last week, this prop will likely be tested repeatedly this week says Trader. Sooner or later that support will give way and once support at 90.45 and the retracement target of 90.35 are overcome, stop-loss selling should drive the rate down to the 88.00 area says the bank. USD/JPY now at 90.95.

EUR/USD ....A Veiw

Look for EUR/USD to remain supported at 1.4450, and offered in the 1.4550/1.4600 area. But, says Trader, a hawkish Beige Book later in the day, nourishing a frontloading of Fed rate hikes, could lead the pair below 1.4400. The pair is now at 1.4484.

EUR/USD Today 11-01-2010

EUR/USD is correcting higher from its 200-day MA at 1.4259, a potential bear-flag has been negated and topside risk toward 1.4570-1.4685 now looks to be the likely outcome says analyst. EUR/USD now trades at 1.4530.

Hopes should help GBP

Bad news for UK Prime Minister Gordon Brown should start becoming good news for the GBP, according to Forex Focus. The greatest threat to UK prosperity is the country's enormous fiscal deficit, which Brown shows little sign of reducing fast. However, a victory for the opposition Conservative Party in elections later this year should mean greater fiscal stability, which should prevent the GBP from falling.

USD/JPY Today

The weekly USD/JPY charts suggest the current rally is running out of steam, says Trader. She looks for more signs of topping Monday, with a drop below the recent low of 91.00. For a strategy Elliott favors selling at 92.25, adding at 93.00, with a stop above 94.00 for short-term downside targets of 91.25, 91.00 and then 90.00. USD/JPY now trades at 92.35.

Buy Euro on Dips Now??

EUR/USD's rise through 1.4500 after the US payrolls could well set the pair up for more gains. "Greece's woes are still looming, but buying EUR/USD on dips should now be favored," the trader says. The pair is now at 1.4511.

EUR/USD Today

EUR/USD is in a near-term corrective rally which has already reached its first targets of 1.4435 and 1.4480 . Trader sees further upside risks toward 1.4570 and 1.4685 but says despite this a negative tone will prevail while the latter holds and only a daily close above the 55-day MA at 1.4741 will change this outlook. EUR/USD now at 1.4432.