Dovish slant of the FOMC minutes sends the US$ lower. BOE today.

Australian Jobs, China Trade to dominate today’s session. Buying Aud dips still looks to be the plan.

The FOMC minutes contained no timeline as to when to expect a rate hike, which, following Janet Yellen’s “6 month” comment at the press conference after the meeting, was enough for the market to sell the dollar across the board. It looks as though it could stay under pressure, although there is plenty of data out today to provide some volatility. Australian unemployment numbers will get the ball rolling ahead of the Chinese trade data, and then later in the day sees the BOE I/R decision and the ECB Monthly Report.

EUR/USD: 1.3850

The dollar is softer again today following the release of the FOMC Minutes, which reflected what Janet Yelled had said during her press conference after the meeting, namely that monetary policy will stay accommodative for some time to come.

Having chopped around near 1.3800 for much of the session, the Euro shot up to a high of 1.3857 (61.8%) as traders sold the dollar. With the intra-day indicators pointing higher, the next port of call will be the 24 March spike high at 1.3875, and beyond there would head towards 1.3900 (1.3895 :76.4% of 1.3966/1.3675). Back above 1.3900 would suggest a retest of 1.3966 and eventually 1.4000.

The dailies remain pretty flat, so it may be that we are in for yet more of the choppy, directionless trade that continues to dominate the Euro, and if it falters here against the dollar then the downside will see bids at minor Fibo support at 1.3815 (23.6% of 1.3672/1.3857), and then below 1.3800 at 1.3785 (38.2%). Below that would head towards 1.3725 (61.8%) although this looks to be out of touch for the time being.

Further out,  below 1.3700, bids at around Friday’s low at 1.3675 will be strong support, being where several indicators converge, including the top of the daily cloud, the 100 DMA, the 23.6% retracement of 1.2753/1.3966 and the rising trend support from the 1.2753 low.  A break of this though, would head back towards the Fibo support at 1.3660 (61.8% of 1.3475/1.3966) below which, the 27 Feb low at 1.3643 will come into view ahead of the 76.4% Fibo support at 1.3595. Below there would head towards the 200 DMA at 1.3525 although tat this point it is over the horizon.

It appears that the immediate direction could again be higher, although it is hard to become too excited either way on the Eur/Usd and I am somewhat neutral. Note that the DXY has now broken back below 79.75 (200 WMA), currently at 79.50 which does not bode well for the dollar.

For today use a range of 1.3815/85 as a guide.

Economic data highlights will include:

ECB Monthly Report, US Jobless Claims

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EUR/USD: 4 hour

USD/JPY: 101.75

US$/Jpy is pretty much unchanged today, having attempted the topside where it failed at 102.15 before turning lower once again.

I suspect we could be in for much the same again, given that although the dailies still point lower, the 4 hour charts remain rather oversold following the recent sharp sell-off from above 104.00, and need some time to unwind.

The first support will be at 101.54 where the dollar has so far bottomed out at the 76.4% decline of the rise from 100.75/104.12. Below here would head towards the support at the double bottom at 101.20 (blue line), where Corporate Japanese demand was previously very strong and provoked a sharp upside correction, so we need to be careful of being too short running into this level. If it were to give way though, then we should expect a run towards 101.00 and probably to the 4 Feb low at 100.75, roughly where rising trend support and 200 DMA also lie, and thus should be strong support.

On the topside, resistance will again be seen at the base of the daily cloud at 102.05 ahead of the first minor Fibo retracement levels of the fall from 104.12, at 102.15 (23.6%) and 102.50(38.2%).

As with yesterday, some sort of minor retracement would not surprise, and selling into the 102.00/50 area would nce again seem to be the plan, for an eventual look at 101.20 (weekly Kijun) and possibly lower.

Economic data highlights will include:

Bank Lending, Machinery orders

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USD/JPY: 4 hour

GBP/USD: 1.6790

Cable has headed higher today following the release of the FOMC minutes, taking out the previous 1.6782 high, but so far failing to overcome 1.6800.

Hourly momentum has some short term bearish divergence so we need to be careful up here, but the 4 hour momentum does point higher, so we could yet see a test of 1.6800. Beyond here would hint at a run towards 1.6821 (17 Feb high) on any hawkish comments following today’s BOE I/R decision (No change expected), with the market already looking at the possibility that the UK will  be the first major economy to begin raising rates sometime in H2 2015. Beyond 1.6821, the next point to watch will be 1.6875 which has not been visited since Nov 2009 and thus should prove difficult to break at the first attempt.

On the downside, there will be minor bids today at 1.6750 below which would head back towards 1.6700. It does not look like going much below here today, although if the BOE play down the possibility of any rate rise in 2015 then Cable will be quickly back below here and would find bids at around 1.6650 (61.8% of 1.6551/1.6799), which is where the 100/200 HMA currently lie.

For today, use 1.6840/1.6820 as a guide, and with the daily indicators beginning to point higher, buying dips would appear to be the strategy.

Economic data highlights will include:

BOE I/R Decision, APP Facility

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GBP/USD: 4 hour

USD/CHF: 0.8794

US$/Chf has headed back below 0.8800, finding a low at 0.8788. Further losses could be on the cards, where support would be found at 0.8760 (76.4% of 0.8695/0.8953), below which could see acceleration towards 0.8700 (13 March low: 0.8698).

On the topside, we need to regain 0.8800 before any sign of recovery, where sellers would now be seen at 0.8827 (23.6% of 0.8953/0.8788) and then 0.8850 (38.2%).  It seems unlikely that we are going much above here today and 0.8900 does seem out of touch, but if wrong we could yet be in for another look at last week’s 0.8953 high.

For today, use 0.8775/0.8830 as a guide.

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USD/CHF: 4 hour

AUD/USD: 0.9385

The Aud continues to march higher, today reaching 0.9398, taking out the Fibo resistance at 0.9387 (38.2% of 1.0582/0.8660) in the process, but so far failing just ahead of the 0.9400 option barriers. We have currently come back to sit right on this level and will do so until the release of the Jobs numbers later this morning, which will be closely followed by the Chinese Trade data (exp +$1.8 bio,Exports +4.8 bio, Imports +3.9 bio).

If the employment numbers are solid (exp +5K, although the range is -25K/+25K, and unemployment @ 6.1%) then the Aud is likely to take out the barrier and beyond 0.9400, there is not too much to stop it heading towards the 19 Nov high at 0.9448 and 0.9450 (weekly cloud base), which should prove decent resistance. Beyond 0.9450 would hint at a run up to 0.9494 (76.4% of 0.9757/0.8660) although I suspect it is too early for this, but the longer term strategy of looking for a run towards the SHS target at 0.9580 remains intact.

If the data is soft, the Aud is going to run out of steam right here and would head back towards minor support at around 0.9330/40, beyond which would see a drop back to the rising trend support at 0.,9300 (100 HMA). Below here would see a deeper correction towards the 200 HMA at 0.9265 and then to the Fibo support at 0.9245 (38.2% of 0.8995/0.9365).

While I remain bullish on the Aud, the 4 hour charts now show some minor bearish divergence and I think I would be a bit careful at these levels. It would not surprise me to see the Aud suffer a bit of a setback, but overall I think we need to leave room to buy into dips.

Economic data highlights will include:

Employment, China Trade Balance

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AUD/USD: 4 hour

NZD/USD: 0.8718

The dovish FOMC minutes have allowed the Kiwi to take out 0.8700 and to head on to a high of 0.8727, leaving little to stand in the way of a run towards 0.8842 (July 2007 high) as per the weekly chart below..

Much will depend today on the data from China and Australia, and the short term charts do show a degree of bearish divergence, so while the longer-term indicators remain positive,  a setback to slightly lower levels would not surprise, but should I think be seen as a buying opportunity.

The downside points to watch are at 0.8700, 0.8676 (23.6% of 0.8513/0.8727) and 0.8645 (38.2%).

On the topside, it is rather “blue sky” but sellers should appear at 0.8750 and 0.8800. Eventually though 0.8842 looks likely, but may take a while to achieve.

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NZD/USD: Weekly