GBP underperformed its peers on Wednesday

EUR/USD

The pair settled the session lower and failed to benefit from a higher EUR/GBP cross amid broad based GBP weakness after market participants reacted to the release of the minutes from the most recent MPC policy meeting. There was little in terms of EU related commentary, but WSJ reported citing ECB’s Noyer that there is no particular interest in cutting rates by a few cents if it only impacts core countries. He also said that excess liquidity is very significant and will remain so even after upcoming LTRO repayments. Separately, ECB's Asmussen said that the recovery this year will be mild and gradual. He is cautiously optimistic on economic outlook. In terms of technical levels, supports are seen at the 55DMA line at 1.3283, the 21DMA lower Bollinger line at 1.3274 and then at 1.3250. On the other hand, resistance levels are seen at the 21DMA line at 1.3450, 1.3482 and then at 1.3520.

GBP/USD

GBP underperformed its peers on Wednesday following the release of the most recent BoE meeting minutes which revealed that 3 MPC voted for more QE. The MPC also considered cutting bank rate, buying other assets and changing remuneration of banks' reserves. The pair fell almost 100 pips shortly following the release of the statement by the BoE, which in turn supported the USD index. In terms of macro data, the Office for National Statistics (ONS) said that employment rose by 154,000 to 29.73m in the three months to December, the fastest rise since last summer. The rise was driven by full-time employment, up 197,000 on the previous quarter and 394,000 over the year, the largest annual increase since 2005. However the growth in employment came at the expense of earnings. Average earnings, excluding bonuses, rose by 1.3% Y/Y, the lowest rate for two-and-a-half years. In terms of technical levels, supports are seen at 1.5234 which is the 2012 Jan-13th low, followed by the 61.8% retracement of the 1.4228-1.6747 move at 1.5190 and then at 1.5125 which is the July- 21st 2010 low. On the other hand, resistance levels are seen at 1.5452, 1.5544 and then at the 10DMA line at 1.5570.

USD/JPY

The pair recovered from overnight losses after Japanese Finance Minister Aso said there are no plans to buy foreign bonds with PM Abe saying that the need for government-private fund to buy foreign bonds has lessened. Aso also said that the talk of currency wars is going too far and the JPY weakened without intervention. In terms of technical levels, supports are seen at 93.00, the 21DMA line at 92.44 and then at 92.22 which is the Feb-15th low. On the other hand, resistance levels are seen at 93.96, 94.22 and then at 94.41.