The main risk event today during Asian trade will be the end of the two-day BOJ policy meeting. All 22 economists surveyed by Bloomberg expect a ‘no change’ decision on monetary policy. The subsequent statement might be more enlightening and volatility provoking. The minutes from last month’s RBA meeting will also be released and Governor Glenn Stevens will be giving a speech later today.
EUR/USD took out the first batch of trailing stops above 1.2805 and a daily close above previous resistance at 1.2800 will have the bulls feeling a little more upbeat. Intraday support levels should be very firm near 1.2770 and resistance levels are at 1.2840, 1.2855 and getting stronger near 1.2875/80 (see chart). Much of the EUR-focus is still on the cross pairings.
EUR/GBP made decent gains but overall is still oscillating between its 100-day and 200-day MAs (see chart).
EUR/JPY will again be a major focus with important technical resistance looming near 104.80 (see chart).
USD/JPY had a reasonably quiet day yesterday after the strong recent gains and is still showing admirable resilience. There was a mini false break above important technical resistance at 81.50 but the bears were subsequently unable to get back onto the 80 handle so further gains look quite likely at this stage. Of course a lot will depend on the BOJ statement later today.
AUD/USD will start the new day back above 1.0400 and it has bounced 120+ pips off Friday’s lows with relative ease. There are trailing stops waiting above 1.0470 and 1.0480 which may well come into focus depending on what the RBA has to say.
USD/CAD has broken cleanly below 1.0000 with the CAD benefitting from higher oil prices and cable has been unable to join in the sell-USD party as it lost ground against the other majors ex-JPY. The NZD has also started clearing out some trailing stops and there are more reported in NZD/USD above .8210.
Good luck today.