London session has just seen the GBP/USD rising above 1.5800 on the improved sentiment in Europe after the Greek austerity approval by its Parliament.

The cherry on top of the pair is CBI (Confederation of British Industry) officials stating that the UK is successfully avoiding a double-dip recession.

The British FTSE 100 is up by 1%.

“Cable has good resistance evident from 1.5795 to 1.5840 and unless we can claw our way back above 1.5840 we are going to see further selling pressure over the next few sessions”

The cross has posted its biggest weekly advance since the record intervention by the BoJ at the end of October 2011, climbing from the 76.50 area on Monday to 77.80, Friday’s peak. The upside was bolstered by the advance in the US dollar and the rumours circling another intervention by the BoJ and the MoF - framed under the concept of ‘stealth

The EUR/GBP has just rallied into 0.8400 level on London opening. Taking in account that the pair closed at 0.8373 on Friday, today’s current gains are around 30 pips.

“EUR/GBP last week eroded its 4 month down channel but NOT key short term resistance at 0.8420/25, the December high and the 23.6% retracement of the move down from July 2011”, wrote Karen Jones, analyst at the Commerzbank, pointing to a downside bias as long as the EUR/GBP is capped at 0.8420/25. Breaching that area could lead to 0.8550, a “potential base”.

The EUR/GBP has just rallied into 0.8400 level on London opening. Taking in account that the pair closed at 0.8373 on Friday, today’s current gains are around 30 pips.

“EUR/GBP last week eroded its 4 month down channel but NOT key short term resistance at 0.8420/25, the December high and the 23.6% retracement of the move down from July 2011

The cross has posted the first negative week in 2012, falling 0.9% against the greenback. The RBA has left the cash rate unchanged at 4.25% although its stance was more dovish, putting the AUD under selling pressure.

The cross has posted its biggest weekly advance since the record intervention by the BoJ at the end of October 2011, climbing from the 76.50 area on Monday to 77.80, Friday’s peak. The upside was bolstered by the advance in the US dollar and the rumours circling another intervention by the BoJ and the MoF - framed under the concept of ‘stealth intervention”.

Producer and Import Prices have disappointed again, coming in flat MoM in January vs. a raise of 0.2% expected. The index has also contracted 2.4% over the last twelve months, against a drop of -2.3% estimated previously.
Once again, the deflationary pressures are playing against the SNB forecasts and undermining its exchange rate policy, despite the commitment by the central bank to defend the peg with uttermost determination.

"USD/JPY Implied vols have shown little real change over the last week - 1mth around 7.5. 3mth 8.5 and 1y 10.8, but with realised vols still much lower, these levels are likely to come off if spot stagnates. 1mth realised vols are just 6.3%, 3mth 5.6 and 1yr 8.3, while recent and multi year implied vol lows are certainly achievable at 6.35 in 1mth, 7.5 in 3mth and 10.35 in the 1yr."