Asian forex market wrap: GBP continues the rage

Massive short-covering by hedge funds of GBP shorts continues during Asia No major news releases, movements dictated by flows Paul Volcker says markets not yet healed George Soros also added some USD-negative comments Rumours started circulating that a hedge fund might be in some difficulty and that was why they were liquidating their profitable GBP short positions- but this is totally unverified Gold was steady around $1055/oz after some overnight losses Regional equity markets were very quiet Cable opened at 1.6280, briefly fell in early Sydney trade but as soon as Tokyo entered the market there was more heavy buying of cable and GBP/JPY in particular. Cable rallied first to 1.6340 where it consolidated for a few hours before the next push took it 1.6400, where the first spate of decent sell orders appeared. EUR/GBP fell below .9140 during the second cable phase, triggering more stops and driving the cross to its low at .9115. Technical support is seen in EUR/GBP at .9075 and resistance in cable is at 1.6400-10 and also the bearish trend line is at 1.6450. USD/JPY jumped from 90.50 to 90.99 on the heavy GBP/JPY buying and it has consolidated these gains since, trading most of the day around 90.70. AUD/USD jumped to a new high of .9272 on AUD/JPY buying and NZD/USD was held below .7500 by option protection ahead of that level. EUR/USD was quiet in a 30 pip range with EUR/JPY buying offset by EUR/GBP selling. Ranges: EUR/USD 1.4933/67; cable 1.6260/1.6400; USD/JPY 90.52/99; AUD/USD .9205/70; GBP/JPY 147.20/148.70; EUR/GBP .9114/88.