MORNING SLICES (Abbreviated) Fundys – The lack of economic releases in the overnight session failed to prevent the markets from moving significantly with currencies selling off across the board in favor of the flight to safety lure of the Yen and USD .
A G8 meeting will take place in Italy next week (Wednesday to Friday), and interest in the FX market is centring on the Chinese delegation led by President Hu Jintao. In the past week the financial media have reported that China wants a discussion about the USD’s role as reserve currency. Understandably the Chinese are worried about what the US imbalances will mean for the USD in the long term, especially considering that the bulk of China’s FX reserves are invested in USD assets.
JPY traded on a firmer footing, with risk appetite waning amid fresh concerns over the global growth outlook after the recent U.S. employment numbers. Ahead of the G8 meeting the dollar’s reserve status is the subject of fresh debate, which has also encouraged a reduction in risky positions and beneficial for JPY due to a general flight to low yield currencies.
Euro price action remains choppy; 100-Week SMA key
Dollar/Yen eyes retest of critical trend lows
Cable bearish reversal week could open deeper setbacks
Dollar/Swiss carving out meaningful base
Dollar/Cad gains seen extending to previous support turned resistance
Australian Dollar stalling by longer-term moving average
New Zealand Dollar supported by 10-Week SMA for now
EUR/USD – The market remains locked in a multi-day [...]
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