EUR/USD
Even though the session was dominated by risk-averse flows, which stemmed from liquidation related flows out of Asia where the Nikkei 225 index fell over 7% and in turn prompted market participants to cover long USD/JPY positions. In terms of macroeconomic commentary, the Spanish Treasury successfully sold just over EUR 4.00bln worth of bonds, while the latest round of Manufacturing and Services PMIs out of Europe underpinned the view that more stimulative measures will be required from the ECB to prop-up the stagnating joint currency bloc. In terms of technical levels, support levels are seen at 1.2821/09 and then at 1.2796. On the other hand, resistance levels are seen at 1.3030/51 and then at 1.3100.
GBP/USD
In terms of macroeconomic news flow, the release of the second GDP estimate from the Office for National Statistics (ONS) in the UK confirmed that the economy grew 0.3%, with the services sector growing 0.6% over the three months. However it was the sell-off by USD/JPY which began overnight in Asia and consequently weighed on the USD that was the main driver. As a result, in spite of the evident risk-averse sentiment, the pair settled the session with modest gains. In terms of technical levels, supports are seen at 1.4915/00 and then at 1.4892. On the other hand, resistance levels are seen at the 10DMA line at 1.5208 and then at 1.5281.
USD/JPY
The JPY strengthened across the board, driven by touted liquidation related flows after the Nikkei 225 index fell over 7% as market participants reacted to the release of softer than expected macroeconomic data from China, as well as hawkish FOMC meeting minutes. As a result, the pair settled the session sharply lower, albeit off the lowest levels of the session. Even though the latest sell-off is somewhat of a concern, the underlying bullish trend is set to remain intact and the pair is widely expected to recover the move lower in the very near future. Technically, support levels are seen at 100.54, the psychologically important 100.00 level and then 99.90. On the other hand, resistance levels are seen at 102.73/88 and then at 103.57.