Global FX: Euro Up On USD Selling

The single currency rose against most others, as the USD Index broke a firm level of support at 81.03 -- marking the 200-DMA. After printing a high in the European morning at 1.3335, the JPY continued to claw back lost ground overnight, leading to downside cross pressure on the EUR as better-than-expected industrial production figures failed to prop up the EUR/USD at the midpoint of the day. However, as the US came to market, USD selling was the primary theme, breaking the pair above the 61.8% Fibonacci level of the February-April slide. A raft of ECB speakers due tomorrow should take focus, as the political situation in Greece continues to deteriorate after minority parties express dissatisfaction with the PM Samaras announcements on the state broadcaster’s closure.

GBP/USD
The wake of the stronger jobs data in the UK lifted GBP/USD to a European morning high of 1.5684, running into touted offers at the June-6 high. This also led the EUR/GBP cross to a three-week low at 0.8470. Later in the session, amid broad USD selling with no tier 1 data to distract, the pair marched higher and into February 13th’s high at 1.5690. The 200-DMA 1.5703 remains unthreatened, which could prove a major level to confirm any medium-term trend in the pair. The nearing horizon of Carney taking the helm at the Bank of England continues to be eyed by participants, with prospects of forward guidance and additional monetary activism from the central bank seen as the longer-term trend catalyst.

USD/JPY
The JPY weakened modestly alongside the recovery off the lows in the Nikkei 225, however a failure to firmly breach 97 to the upside withdrew some momentum from the pair as attention turns to chatter of a 95 digital option expiry due in tomorrow's session. Continued selling at the highs touted from Swiss names prevented the pair from staging too much of a turn around. The downside accelerated as participants remained unwavered by the BoJ’s release overnight assuring their confidence in the Japanese economy. The USD-index breaking the 200-DMA further weighed on the pair, as yesterday’s low at 95.59 broke. Nonetheless, June-7th’s low at the 95.00 remains unthreatened. US advanced retail sales tomorrow will prove the next yardstick for the US economy, ahead of the Federal Reserve rate decision next week.