EUR maintains its strong bid tone against the USD and GBP particularly. Sovereign names are trying their best to slow the progress but they are also buying in size on any appreciable dip. Fundamentals are irrelevant in this market phase and flows are dominating.
JPY also remains relatively strong, so much so that Japanese authorities are using some semi-official outlets to try and put a base under USD/JPY at 90.10/20. We visited this level on two occasions this week and each time dealers reported large bids every two pips on the interbank trading platforms.
Cable is trying to form a strong technical topping formation and the GBP is losing ground against all major currencies. Large bids were seen towards 1.6400 earlier in the week but we are close to revisiting that level. EUR/GBP is flying higher but some caution is advised as most of the buying is from professional trading accounts jumping on to the trend.
AUD, CAD and NZD also keep grinding higher and there is no sign of any change in that trend. The commodity story remains compelling for many people and while this is hard to argue with, the move higher certainly feels overstretched. That said, whether the AUD/USD tops out at .87 or .97 remains open.
Those who sold rallies in cable and USD/JPY, and bought dips in EUR/USD and AUD/USD, will have had an excellent week.