ASIA session review: Dollar gains further

The dollar extended its biggest weekly gain versus the yen since 2009 and added versus other main currencies, having surged after Federal Reserve Chairman Ben S. Bernanke outlined the case for U.S. stimulus to be withdrawn as the economy keeps improving.

The yen weakened against all its 16 peers today as stocks rose, reducing demand for the safety of Japan’s currency.

The yen has fallen 3.2% this week against the euro, poised for the biggest slide since the period ended April 5, the same week the Bank of Japan introduced unprecedented stimulus. Japan’s Nikkei 225 (NKY) Stock Average added 1.7%.

EURO: remain under pressure after selloff caused by Bernanke’s speech. Weak European data added pressure on the common currency.

EUR/USD  tried to rebound after yesterday’s selloff. Above $1.3300 and $1.3400 (initial resistance, Jan 14 highs) resistance comes at $1.3480, then - near $1.3540 (channel resistance line from May 29). Support is around $1.3170 (Jun 10 lows) and $1.3100 (Jun 6 high).

Offers: 1.3255,1.3270,1.3280,1.3300,1.3320,1.3350

Bids: 1.3200,1.3190,1.3180,1.3170,1.3150,1.3130,1.3115,1.3100

POUND:

U.K. retail sales including fuel rose by 2.1% last month after slipping by 1.3% in Aprily.

Sterling has strengthened 3.3% in the past three months, the best performer after the euro among 10 developed-market currencies. Europe’s common currency gained 3.5% and the dollar advanced 0.8%.

GBP/USD  remains under pressure with support coming at $1.5380 (June  6 base and 50% of $1.5006-$1.5750).  Initial resistance comes at recent high on $1.5670, extending to channel line at $1.5730. Next resistances could be found at $1.5765 (Feb 7 high) and $1.5800 (psychological level).

Offers: 1.5530,1.550,1.5575,1.5590,1.5600,1.5620,1.5650

Bids: 1.5480,1.5450,1.5430,1.5420,1.5410,1.5400,1.5380

YEN:

USD/JPY  managed to break above Y98.00. The upside move is targeting Y98.80, for a close above Y99.00 and to reach the psychological Y100.00 the June highs. Minor support placed at Y96.00, ahead of Y95.00.

Offers: 98.20,98.30,98.50,98.75,99.00, 99.15,99.20, 99.30

Bids: 97.75,97.50,97.25,97.00,96.80,96.50

COMMODITY CURRENCIES:

AUSSIE: hit the lowest since September 2010.

AUD/USD remains among the worst performers in the FOREX, having hit a nearly 3-year low at $0.9160 (its lowest since September 2010). AUD/USD has continued to suffer in the wake of a stronger dollar. Currently AUD/USD is trading at the $0.9230. Immediate supports could be found at $0.9162/00 (daily low/ Sep 9 2010 low) and $0.9100 (psychological level), while resistances are seen at $0.9235 (previous support) and $0.9310 (daily high).

DATA AHEAD:

At 14:00 GMT US CB Leading Indicator, as well as Existing Home Sales data and  Philadelphia Fed Manufacturing Survey are expected.

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