Asian Markets Mixed, USDJPY and AUDUSD Get Softer Running Out of “Gas” - 11.9.2013

War in Syria became a less likely event as a diplomatic solution for handing chemical weapons to international control is getting more certain. US President Barack Obama asked the Congress to delay its vote for next week and he said that the credibility of this proposal as well as Syria’s true intentions must be verified.

US Equity markets were well underpinned as fears of war are fading with S&P 500 advancing for a second consecutive day by 0.73% and the Dow Jones Industrial Average Index surged by 0.85%. Risk-on paused earlier today as the Asian stocks were mixed with Hang Seng printing losses, NIKKEI steady and S&P/ASX 200 gaining.

Thus, riskier currency like the Aussie was steady in Asian session and was contained by resistance at 0.9317 against the US dollar. At the same time as Asian markets were pausing and developments were discounted the USDJPY run out of gas just below resistance at 100.58, although the currency pair holds its ground near its recent peak.

The Aussie against the Japanese Yen was without doubt one of the mostly benefited currency pair, surging by 2.30% from Monday support at 91.32 to resistance at 93.54.Technically, the currency pair has formed a double bottom pattern in the daily chart reversing is long term trend to upside and likely to move towards 96.00. Although in the intraday we expect some consolidation or a corrective move on profit taking. Looking ahead, Australian Employment data on Thursday morning could increase volatility.

Elsewhere, investors are focusing on UK Claimant Count Change and Unemployment Rate which is used as forward guidance threshold for BOE Governor, Mark Carney. Unemployment rate is projected to remain unchanged at 7.8% for the 3 months to July. The British pound is few points below 2 ½ month peak at $1.5749, rising since beginning of July on BOE monetary policy update and positive macro data. In addition, we saw the Euro against the British pound falling to a 4-month low at 0.8396 and lately bouncing up to 0.8452 as the EURUSD recovered to 1.3280 and the GBPUSD found strong resistance at 1.5749.