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Safe-havens bid in quiet Asia, a data-dry EUR calendar ahead

FXStreet (Mumbai) - Asia-Pac currencies were little changed in an otherwise quiet Asian session, with little on the data front for the region and Japanese markets closed for the second day of their three-day break.

Key headlines in Asia

Australia House prices beat expectations in Q2

Asian stocks track Wall Street higher

Dominating themes in Asia - centered on JPY, AUD, NZD

Despite a favorable risk sentiment persisting in Asia, with the region’s stock markets on a stronger footing, traders preferred their bets on the safe-havens such as the yen, euro, Swiss franc and gold. While the US dollar halted the recent upbeat momentum and retreated against its major competitors.

USD/JPY dropped from 120.61 intraday highs and tested the hourly 200-MA located near 120.35 region in the mid-Asian session, now trading around 120.45. Whilst the EUR/USD pair continues to remain side-lined around 1.12 barrier, awaiting fresh incentives from the session ahead.

The Antipodeans traded mixed in Asia, with the Aussie clinging to 0.71 support, having faced rejection near 0.7150 levels. The AUD/USD pair attempted a bounce to 0.7150 region earlier this session following the release of upbeat Australia’s HPI data. The price index for residential properties for the weighted average of the eight capital cities rose 4.7% in the June quarter 2015 versus an expected increase of 2.5% and against 1.6% previous.

While the Kiwi remains pressured on the 0.63 handle and stalled its recovery mode after the recent fall to 0.6300 levels on Monday. The greenback showed solid strength against the New Zealand yesterday supported by hawkish comments from Fed officials Bullard and Lockhart.

On the equities front, Asian markets were seen higher, partly undoing Monday’s extreme losses. Japan’s Nikkei stays closed for the second day in a row, while Australia’s S & P ASX index rebounded and now trades +0.27%% at 5,080. The Chinese benchmark index, the Shanghai Composite extended gains, up 0.67% to 3,177. While Hong Kong's Hang Seng index gains 0.76% to 21,922.

Heading into Europe - centered on EUR, GBP

A data-light EUR macro calendar extends into a second straight day with only a set of two-tier economic releases from the UK – public sector net borrowings and CBI Industrial order expectations.

Besides, ECB Supervisory Chair Daniele Nouy is scheduled to deliver a speech at the ECIIA Conference “Audit in the spotlight” in Paris.

Looking ahead, the North American session also offers very little in terms of relevant economic news. US HPI and Richmond manufacturing index will be report, which are expected to have negligible impact on the US currency.

While the Euro zone consumer confidence and the BOE MPC Member Shafik’s speech at the David Hume Institute, in Edinburgh, will also be closely watched.

EUR/USD Technicals

Valeria Bednarik, Chief Analyst at FXStreet explained, “The short term picture supports additional declines for the upcoming hours, as in the 1 hour chart, the 20 SMA heads sharply lower after breaking below its 100 and 200 SMAs, whilst the technical indicators consolidate in oversold territory, with no signs of changing bias.”

“In the 4 hours chart, and early attempt to advance was contained by the 20 SMA, in the 1.1330 region, whilst the technical indicators have lost their downward strength, but remain below their mid-lines, also far from suggesting an up-turn. Should the price extend beyond 1.1160, the bearish momentum will likely accelerate, eyeing then 1.1050 as the next probable bearish target for the upcoming sessions.”

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