FXStreet (Mumbai) – The Japanese currency witnessed sharp gains in Asia mainly driven by Greece concerns while upbeat Japan’s CPI print also supported the upside, pushing USD/JPY closer towards 123 handle. The Antipodeans were heavily sold-off with Aussie largely weighed by Greece risk. While the Kiwi lost ground on the back of RBNZ’s comments.
Key headlines in Asia
Japan’s CPI print averts deflation fears, National core CPI rises 0.1% y/y in May
NZ Trade surplus surprisingly expands in May
USD/JPY drops below 10-DMA, eyes 123
Dominating themes in Asia – centered on JPY, AUD, NZD
A busy Asian session with dampened investors’ moods highly dominated by Greece debt woes as the Euro group suspended meeting yesterday urging Greece to submit new proposals. Among Asian stocks, Australia’s benchmark ASX extended weakness and traded -1.50% lower at 5548. While Nikkei traded flat at 20767, recovering early losses.
Across the Fx space, the dollar-yen pair was offered largely on yen strength following a touch better than expected US Japanese CPI data while looming Greek talks continued to underpin the safe-haven bids in yen.
While both the Antipodean currencies kept losses, with the Kiwi halting tis recovery and falling back below 0.69 barrier after RBNZ stated that the NZD still remains at unsustainable levels. While the Aussie remains undermined by Greece tension as traders favored the reserve currency.
Heading into Europe – centered on EUR, GBP
Nothing much to report in the European session on data front, with the 2 tier data in German import prices and EZ Money Supply data to be published at 6GMT and 8GMT respectively. While EU Economic Summit continues for the second day.
On Greece front, the gathering of the euro zone finance ministers, along with representatives of the creditors — the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) — failed to reach any tangible progress. They told Greece to prepare a new set of proposals and suspended their meeting “indefinitely.”
ANZ economists noted, “The focus now turns to the resumption of talks on Saturday morning.” “What is apparent is that there is a strong political desire to get a deal done, with EU President Juncker saying that the parties would keep going until the last minute to try to get an agreement.”
The deadline for a deal to be reached is June 30, when payments to the IMF are due.
Later in the North American session, we have Revised consumer sentiment data to report with a flat reading expected in June, standing at 94.6. Also, Bank of England (BOE) Governor Carney is expected to deliver a speech at the 2015 Conference on Inclusive Capitalism, in London at 14.15GMT.
EUR/USD Technicals
Carol Harmer of Charmer Charts.com believes, “Euro is flat at the moment, and making no real moves on the upside or the downside….so still look for levels to sell. Up around the 1.1230/40 area would be a good place to re-enter short positions… Now if we fail to make any headway on the topside at all, and go back below 1.1220 I afraid sellers will gain the upper hand and we would then be looking at the market coming back to the 1.1160/55 support which held again yesterday.“
“However a break below 1.1150 and once more the sellers will be coming in aggressively and they will be looking for the market to come quite a bit lower overall..1.1118 is the first target with 11092/92 looking to be the 2nd. Please remember the 11035 overall target. Now if there is any news on Greece and 1.1280 breaks we’re looking at the 1.1395/1.1419 resistance.”
(Market News Provided by FXstreet)