INR: USD/INR Pulls Back Sharply On Suspected Intervention, Still Above Key EMAs
Spot USD/INR is sharply lower in the first part of Thursday trade, with the pair back to 91.55/60, with suspected RBI intervention driving the move. Highs from Wednesday trade were at 92.3050 (before closing at 92.15). The pair remains comfortably above its key EMA support points, with the 20-day back around 91.08, while the 50-day is further south at 90.68, see the chart below. Since the middle of last year, dips under these support points have ultimately proven to be buying opportunities in the pair.
- The Citi INR terms of trade proxy is just up from fresh lows back to early 2023, see the second chart below (the ToT proxy is the white, the trade balance is the orange line). The trade balance is noticeably worse since early 2023, although the first parts of the year tend to be better from a seasonality standpoint on the trade balance front.
- Equity sentiment is more stable today, but we are just up from multi month lows. Offshore investors have been net sellers of local stocks since the start of the month.
Fig 1: USD/INR Spot Versus Key EMAs
Source: Bloomberg Finance L.P./MNI
Fig 2: India Trade Balance & Citi INR Terms Of Trade Proxy
Source: Bloomberg Finance L.P./MNI
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JPY: USD/JPY - Treading Water On A 155 Handle
The USD/JPY range today has been 155.38 - 155.66 in the Asia-Pac session, it is currently trading around 155.50. USD/JPY has been doing some work between 154.50-156.00 as the USD continues to grind higher. CFTC data up until last Tuesday shows leveraged funds paring back large Yen shorts, this bounce back to 156 could provide decent levels to further reduce positioning for CTA/Momentum type players. In today's session, watch to see if these positions are further reduced into the 156.00 area. The juggernaut speed it was building to the topside looks to have been broken for now and we might need to consolidate and do some work before embarking on a clear trend again. What is clear though is that the price action had more to do with overextended positioning and after some consolidation the pressure against the Yen could be resumed at some point.
- “JAPAN ECONOMY MINISTER KIUCHI: THERE ARE PROS, CONS OF WEAK YEN, FX MOVES ARE DETERMINED BY VARIOUS FACTORS" RTRS
- "KATAYAMA: US, JAPAN WILL WORK IN LINE WITH FX JOINT STATEMENT. JAPAN, US WILL CONTINUE TO WORK CLOSELY ON FX. SHARE GENERAL VIEW ON FX WITH TAKAICHI" - BBG
- "JAPAN RULING LDP SET TO WIN MAJORITY IN LOWER HOUSE: KYODO POLL' - BBG
- Options : Close significant option expiries for NY cut, based on DTCC data: 155.75($876m), 158.50($442m). Upcoming Close Strikes : 153.00($1.59b Feb 5), 151.50($1.11b Feb 4) - BBG.
- The USD/JPY Average True Range(ATR) for the last 10 Trading days: 159 Points
Fig 1 : USD/JPY Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
JGBS AUCTION: Weakish Demand Metrics For 10Y Auction
The 10-year JGB auction delivered weakish results, with the low price failing to meet expectations at 98.75, according to the Bloomberg dealer poll. Moreover, the cover ratio decreased to 3.0196x from 3.3037x. The tail was unchanged 0.05.
- This performance came despite an outright yield hovering just below the cycle high, around 15bps higher than the level of last month's auction.
- The 2s/10s yield curve was also stepper last month’s auction, although around 20bps below its a cycle high.
- In early afternoon Tokyo trading, the cash 10-year and JGB futures are dealing little changed.
NZD: NZD/USD - Being Dragged Back Above 0.6000 By A Rampant AUD
The NZD/USD had a range today of 0.5995-0.6035 in the Asia-Pac session, it is currently trading around 0.6035. The NZD is being dragged back above 0.6000 by the AUD after the RBA raised rates. On the day, the first support around 0.5980-0.6010 continues to hold up pretty well for now, through here and the next level is 0.5900-0.5950. I was surprised by the CFTC data as the price action suggested there had been much more paring back of shorts, but the bears continue to hold on. This positioning I suspect could see dips continue to be supported for now and a break back above 0.6100 could provide the catalyst to get out.
- Bloomberg - “New Zealand’s home-building approvals fell 4.6% m/m in December, according to Statistics New Zealand. Following a revised 2.7% gain in November, approvals for stand-alone houses fell 6% m/m.”
- CFTC Data up to 27/01/2026 shows Asset Managers paring back their short positions in the NZD, -40930(Last -52099). The Leveraged community surprisingly added back to their own shorts which they had just started to wind down, -11658(Last -5119).
- Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5975(NZD746m Feb 4) - BBG
- The NZD/USD Average True Range for the last 10 Trading days: 61 Points
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
