ASIA session review (07.08.2013): Yen gains

The yen rose to the highest in almost seven weeks against the dollar as the Bank of Japan started a two-day meeting amid speculation it will refrain from adding to stimulus that’s helped weaken the currency 11% this year.

The pound weakened for a second day against the dollar before Bank of England Governor Mark Carney gives a review of implementing forward guidance to signal the future direction of interest rates.

The euro dropped for a fourth day against the yen before German data that economists said will show industrial production rose in June.

EURO:

The euro consolidates within the narrow range as European stocks opened slightly lower, following a selloff on  Asian markets.

EUR/USD is back under $1.3300. Initial resistance remains at $1.3340. Above gains will extend to and $1.3400/15 (Jun 18 highs). Below $1.3200 support comes at $1.3160 (Jul 25 lows).

POUND:

The pound under pressure before Bank of England Governor Mark Carney gives a review of implementing forward guidance to signal the future direction of interest rates.

GBP/USD Below $1.5300 support is around $1.5260 (Monday’s lows) and the key one - at $1.5100 (Aug 2 lows). Above $1.5375 resistance is around $1.5416 (Jul 26 highs) and $1.5480 (Jun 25 highs).  

YEN:

The yen strengthened versus all of its major counterparts as Asian and European stocks declined, increasing demand for safer assets.

The yen will appreciate to 92 per dollar by year-end, Cole said, citing RBC forecasts.

USD/JPY is near  session lows on Y97.00. Below losses may widen to channel line from Jul 7 at Y96.80 and Y96.20. Initial resistance comes at Y98.80 (Monday’s hourly high) and Y99.90 (channel line from Jul 7), then - Y100.80 (Jul 19 highs).

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