Risk sentiment appears to have stabilized in Asia a bit. The steep fall in Nikkei was just a post-holiday catch up. Yen and Swiss Franc are digesting gains but remain the strongest for the week. Sterling is indeed the worst performing so far, worse than even commodity currencies. Selling in European crosses is clearly weighing on the Pound. Overall, the markets could turn cautious for today, as bigger risk of FOMC meeting just lies ahead on Wednesday. Technically, EUR/GBP's rebound suggests that pull back from 0.8612 has completed. It might be ready to resume the rise from 0.8448, subject to reaction to 0.8612 resistance. At the same time, GBP/CHF is pressing 1.2656 support. Sustained break there should indicate that rise from 1.2467 has completed after rejection by 1.2790 near term structural resistance. In this case, GBP/CHF would target a test on 1.2467 support. That, together with break of 0.8612 resistance in EUR/GBP, could confirm return to weakness in Sterling in general. In Asia, at the time of writing, Nikkei is down -1.81%. Hong Kong HSI is down -0.75%. Singapore Strait Times is up 0.35%. Japan 10-year JGB yield is up -0.0064 at 0.044. China is on holiday. Overall, DOW dropped -1.78%. S&P 500 dropped -1.70%. NASDAQ dropped -2.19%. 10-year yield dropped -0.061 to 1.309. |
