ASIA session review: Yen gets stronger

Data released:

07:00 GMT Germany Gross Domestic Product s.a (QoQ) (Q4) 0.4% 0.4% 0.3% 

07:00 GMT Germany Gross Domestic Product n.s.a (YoY) (Q4) 1.3% 1.3% 1.1% 

09:30 GMT UK BBA Mortgage Approvals (Jan) 50.0K 47.9K 47.1K 

The dollar steadied against its rivals in Asian trade on Tuesday with major currency pairs sticking to tight ranges as traders awaited economic data later in the session for more clarity on the pace of the U.S. economic recovery.

The immediate focus for the dollar is U.S. data later in the day, including house price index and consumer confidence. Over the past few weeks markets have had to contend with negative surprises on U.S. hiring, retail sales and housing.

Traders will also be looking to Thursday, when Federal Reserve Chair Janet Yellen speaks to the Senate Banking Committee in her semi-annual testimony about monetary policy.

EURO

The shared currency retreated from session high. 

A surprise improvement in German business morale on Monday pushed the euro close to that high, but it gave up gains after European Central Bank Governing Council member Ignazio Visco said the ECB is ready to consider cutting its deposit rate into negative territory if needed.

Earlier on, German GDP figures for the last three months of 2013 left no room for surprises, expanding in line with expectations 0.4% inter-quarter. 

EUR/USD remains above $1.3700, above recent low on $1.3685 with support comes at $1.3700 (channel lien from Feb 6), then - at $1.3660, below - on $1.3550 (Feb 2 lows). Resistance comes at recent high on $1.3770. Above resistance comes at $1.3820 (Dec 30 highs) and $1.3850 (channel line).

POUND

The sterling tests fresh weekly highs near $1.6700.

Data wise, Mortgage Approvals tracked by BBA rose to 50K in January, surpassing both estimates and December’s reading at 47.9K and 47.1K, respectively. 

BOE's MCCafferty said that market expectations of first BOE rate hike in Q2 2015 "not unreasonable"

GBP/USD holds near $1.6700. Initial resistance is at $1.6720 (Feb 21 highs). Strong resistance comes at last Monday’s highs on $1.6820.

YEN

The yen advanced the most in more than a week against the dollar amid speculation a depreciating Chinese yuan will damp global growth, boosting demand for the Japanese currency as a haven.

A Reuters poll last week showed most economists still expect he BOJ to ease monetary policy further by the summer, to give the economy a lift as the effects of the government's stimulus begins to wane. But respondents remained sceptical that the central bank will achieve its 2 percent inflation target by early next year.

USD/JPY fell as low as Y102.20. Initial support comes at Y102.00, then - at Y101.20 (Feb 6 lows), then - at Y101.00. Initial resistance comes at recent highs on Y102.80. Above resistance comes at Jan 31 high on Y103.00.

DATA AHEAD

At 14:00 GMT US issue Dec Housing Price Index, followed by Feb Consumer Confidence at 15:00 GMT.

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