Currency markets – Back in the risk aversion / appetite game again.

EUR/USD (1,3180): This time the FX comments are a bit shorter as it is mainly a correlation play with risk aversion / equities right now.

During my holiday the long entry idea at 1,3300 was reached and is still alive as the stop loss is at 1,3000. The range after was 1,3100 to 1,3600. I had expected EUR/USD to trade much closer to 1,4000 after Easter based on the buoyant stock market. Clearly didn’t materialise so far and EUR/USD looks toppish below 1,3600 right now. I keep the idea, but I still believe in renewed focus on problems in some CCE countries.

One interesting figure I noticed during my holiday comes from the shipping industry. The outstanding hedges executed by South Korean ship building companies amounts to USD 10 – 30 billion. All shipping companies would like to cancel the contracts with the ship yards, though difficult. How large a portion of the hedges that needs to be unwound is hard to say. For those with South Korean Won risk it’s very interesting to follow but even in EUR/USD terms it is interesting.

Target: Long from 1,3300 with stop loss 1,3000 and target 1,4000 (possible turnaround level).

  
EUR/GBP (0,8800) – GBP/USD (1,4975): The change in risk aversion towards higher risk appetite for everything of course supported Sterling seriously. It’s worth to note that the housing market have detected some small improvement signs the last 2 weeks, though no trend turnaround.

I don’t have so much to say right now as it is very much equity and general risk appetite related. It’s more interesting to read the equity part. Sterling will be supported for another week so I adjust the GBP/USD range higher but keep the EUR/GBP target as midterm target.

Targets: EUR/GBP  0,9500     GBP/USD range 1,4750 – 1,5250 .

EUR/JPY (131,05) – USD/JPY (99,40): The EUR/JPY range holds quite well and it looks to do so for another week.

As mentioned many times earlier should JPY drop like a stone based on the fundamentals, but it has not started yet despite the higher USD/JPY level. The move and current support is more based on the greenback that is firmer.

I keep an eye on long EUR/JPY positions in Far East. Later this month they could be closed out.

Like under Sterling, the equity markets and risk appetite are the impulses for Yen. Fundamentals are less important.

I keep the targets for the moment.

Targets: EUR/JPY range 128,00 – 133,00  USD/JPY 93,00 

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