Global FX: Single Currency Little Changed

Commentary by a prolific Fed watcher Hilsenrath who suggested that Fed officials are unlikely at this meeting to change their USD 85bln per month bond-buying program failed to support the pair, which settled the session little changed. In terms of euro-zone-specific commentary, it was reported that Bundesbank expects German economy to 'improve markedly' in Q2, while German think tank DIW said that it expects German unemployment to reach 6.9% in 2013 and rise to 7.0% in 2014. Separately, Greek PM Samaras has dismissed talk of an early election over the abrupt closure of state broadcaster ERT. Furthermore, according to a senior euro-zone source, loan tranche will be frozen if early elections are held. Technical support levels are seen at 1.3279/66 and then at the 10-DMA line at 1.3259. On the other hand, resistance levels are seen at the 30-day upper Bollinger level at 1.3387, 1.3434 and then at 1.3456.

GBP/USD
The pair settled the session in positive territory, as scaled down expectations of the Fed tapering its QE, as well as speculation of a snap poll in Greece triggered by the political fallout from the controversial shut-down of ERT state broadcaster supported the pair. Also of note, Britain's economy is set to grow at its fastest pace since 2010, with the Institute of Chartered Accountants in England & Wales upgrading its 2013 forecast to 1.2% from 1%. The institute previously correctly predicted a stronger Q1. Separately, the NFIB says confidence among small businesses has risen to its highest level in three years. In terms of technical levels, supports are seen at 1.5616, the 10-DMA line at 1.5590 and then at 1.5521. On the other hand, resistance levels are seen at the 30-day upper Bollinger® level at 1.5774 and then at 1.5789 which is the 61.8% retracement of the 1.6380 to 1.4832 move.

USD/JPY
Overnight in Asia the Nikkei 225 index settled with decent gains and crucially above the key 13,000 level as the USD/JPY edged back above the 95.00 level. However, a firmer spot failed to support the price action in the options market, where the shorter-dated implied vols remained under-pressure. There was little in terms of Japan specific commentary, but Fitch said that China's credit bubble is unprecedented in modern world history and that the credit-driven growth model is clearly falling apart. Technically, support levels are seen at 94.54/08 and then at 93.98. On the other hand, resistance levels are seen at 95.80, 96.09 and then at 96.11, which is the 23.6% retracement of the 103.74 to 93.75 move.