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NZDJPY<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Continuing for the sixth straight session, traders bid the NZDJPY currency cross higher to start the week off as carry trade notions continued to permeate throughout the market.  Purporting the daily theme was the lack of commentary on Asian currencies via the G7 conference over the weekend.  Expected to at least touch upon the topic, the leaders of the 7 industrialized economies deferred, deciding it best at the moment to remain hushed.  The absence of commentary reversed market sentiment and triggered bid orders at the 78.00, 78.20 and 78.40 figures before succumbing to consolidation ahead of the Asian session.  Likely furthering the current momentum will be tonights department store sales in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Tokyo and the Nationwide report.  Both likely to continue their downtrend, the retail sales numbers will continue to weigh in support of the yen bears as consumers continue to be hesitant of the current economic situation.

A rising wedge formation is giving a slightly bearish suggestion as the price action currently tests a heavy resistance figure at the 78.50 figure.  With the longer daily term Stochastic offering hints of overextension, the shorter term 60-minute version is indicating a perfect divergence as the cross make higher highs.  With bears ready to pounce on the recent move, the first level of support is likely coming in thin at the 78.25 figure with 77.50 (23.6 percent fib level from the weeks bull move) providing a heavier support barrier in the intermediate term.  A failure would see heavier barriers at the 76.87 figure (38.2 percent fib from the aforementioned move).  Comparatively, should bulls make a run for the 79 handle, a confirmed close above the high would negate all else.

EURJPY

Rising the most in terms of basis points, the EURJPY currency cross pair moved higher in New York following the same sentiment that led the yen major to test the 118 figure against the US dollar.  Helping the bidders out was the somewhat lackluster industrial production figures.  Although dipping by 0.4 percent on the monthly figure, positive and sustained growth in the German economy was outweighed by dips in France and Italy.  As a result, the figure seems somewhat misleading as the regions largest economy continues to stay on track, contributing positively to the eurozones health.  Adding in hawkish rhetoric and an upgrade by central bank officials over potential rate hikes in the overnight and there was plenty of support for the carry trade strategy on the euro bid side.  Subsequently, current momentum has plenty of potential with both producer price reports and German ZEW surveys expected to show further rate hike prospects. 

Seemingly overextended, the cross maintains a healthy bid tone in the longer term daily, even as the shorter term is confined to a 100 basis point channel.  Now looming right under the 149.75 figure, plenty of resistance is visually keeping the pair underwater and set for a mild pullback, keeping in line with the channel.  Stochastic is confirming the emergence of likely offers as both components reside in the overbought area.  A pullback would likely target the 149 support as the first test with the likely capping at the 148.25 figure, bottom channel support.

AUDJPY

Carry traders re-entered to bid on a short term pullback as the Japanese yen fundamentals for the day were lackluster at best.  Technically, the cross is visually contained in a channel, tightly packed between the 0.7500-0.7550 figures.  Approaching the topside resistance line, Stochastic is confirming a downturn on the 60-minute shot as offers are likely to emerge on the short term turn trade.  The intraday pullback is likely to see offers till the 0.7530 figure in the Asian session with sellers capping gains at the 0.7500 figure, bottom trendline support.  A break here would force a test to the 0.7450 figure with upside potential in the price action targeting the 0.7600 handle, unabated.