Morning forex briefing
The Greenback is trading about unchanged to start New York after a quiet range-bound session overnight. All eyes were on the BOJ rate announcement and, as expected, the BOJ left rates unchanged despite speculation that pressure was on to hike rates sooner rather than later. BOJ Governor Fukui said little to inspire traders one way or the other in the press conference following the announcement but traders feel that the Central Bank is leaning more toward a December hike after his remarks. Traders are waiting for today’s round of US data and many are looking for the USD to break out of the recent range after the news is out.
Cable is trading within established ranges this morning after visiting both sides of unchanged overnight. UK retail sales were slightly better than expected but failed to inspire traders either way. BOJ comments were of little interest to traders but cross-traders were seen booking profits some desks say. EURO is off the overnight highs near 1.2830 area and analysts remain divided as to near term direction. Technical support is at the 1.2770/80 area and resistance is near the 1.2860 area analysts say; studies remain neutral. USD/JPY had muted reaction the BOJ rate announcement; analysts were agreed that the BOJ would keep rates unchanged but remain divided as to the timing of the next rate hike. In my view, the USD/JPY has found the top of the range again and a sell-off is likely during the next 24 hours.
Look for today’s data to finally break the USD out of the consolidation seen the last several days; with the exception of GBP the greenback has remained range-bound this week and I believe the USD is looking to move lower after today’s data.
GBP/USD Daily
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R3: 1.9050
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R2: 1.8980
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R1: 1.8920
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Current Price : 1.8883
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S1: 1.8850
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S2: 1.8820/30
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S3: 1. 8800
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Pair has inside
range day with no test of 50 bar MA or 50% fib defense overnight. Look
for today’s US data to inspire a bit of volatility but eventually the
rate is looking to close higher in my view. Close over the 1.8950 area
to inspire the bulls, under the 1.8850 area for the bears. Stops are
said to be in the sub-1.8830 area and above the 1.8980 area near-term
suggesting that range trade will continue at least near-term.
USD/JPY Daily
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R3: 118.80
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R2: 118.40/50
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R1: 118.20
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Current Price : 118.04
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S1: 117.50
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S2: 117.00
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S3: 116.60
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Pair continues to flirt with the 50 bar MA during current consolidation phase. Traders note that Japan fundamentals have inspired little action suggesting that all eyes are on US data this morning; expect volatility during the day. Break below the 117.60 area likely to expose close-in stops, above 118.50 area also. Look for pair to slide lower after the news today.
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Jason Alan Jankovsky
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