US$ a bit weaker following the FOMC minutes. BOJ/BOE meetings today.

Aud & Kiwi firm ahead of a busy day of data.

The dollar is generally a little weaker following the release of the FOMC minutes, which contained no mention of any impending rate hikes, despite the mildly more hawkish tone suggesting that tapering is likely to finish in October. Today’s key focus will be initially in Asia, where we get the NZ Business PMI, Australian Jobs data, Chinese Trade data am]ns the BOJ IR decision/statement. Later on the ECB Monthly Report, US Jobless Claims and Wholesale Inventories will the main drivers, while from the UK we get the BOE meeting.

EUR/USD: 1.3640

The Euro is a little higher despite the mildly more hawkish tone from the FOMC Minutes at which the Fed announced that tapering is likely to finish in October if the economy continues on its current trajectory of ongoing jobs growth and low inflation. However, the minutes gave no mention of any likelihood of an imminent rate rise, which helped erase any further dollar gains. A speech from Mario Draghi also failed to spark much enthusiasm to send the Euro lower despite him reiterating the accommodative bias of the ECB. The price action since the release of the minutes has been choppy, with the dollar initially strengthening against the Euro before turning lower to push the Euro to session highs near 1.3650.

Technically the short term charts appear to suggest that the Euro could continue to head a bit higher, and given the overwhelmingly bearish view, a short squeeze would not really surprise. If it can take out minor Fibo resistance at 1.3650 (61.8% of 1.3700/1.3573) it could then head on to 1.3670 (76.4%/ daily cloud base/200 DMA). Further out, the Euro would find sellers at 1.3700, a break which would see a run up towards 1.3730(100 DMA), which should be solid resistance although a break of this level would head on towards 1.3803 (61.8%).

Back to the downside, which looks a little less likely today, bids will be once again seen at 1.3600 (daily Kijun). Below there would suggest a retest of the minor double bottom at around 1.3575 (Thursday low 1.3573). Beyond there would head towards 1.3557 (76.4%) a break of which would head to the greater degree of Fibo support at 1.3518 (38.2% of 1.2754/1.3995) but which looks unlikely to be seen today. If wrong, a break lower would see good bids ahead of the post-ECB spike low at 1.3502. The base of the rising wedge now lies at around these levels as well, so if we see 1.3500 I think I would be squaring up short positions at the first attempt to break through it, as it should be strong support. If wrong on this, a break of the wedge base would hint at a further move south towards 1.3415 (200 WMA), 1.3370 (50% pivot % of 1.2754/1.3995) and then to 1.3300 (100 WMA) and 1.3294 (7 Nov ’13 low).

Given that there is not too much data out today, the Euro may end up close to current levels, but I do suspect that we are going to squeeze a little higher at some stage and for today would use 1.3620/70 as a guide.

Economic data highlights will include:

ECB Monthly Report, US Jobless Claims, Whole sale Inventories

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EUR/USD: 4 Hour

USD/JPY: 101.57

The dollar has gyrated between 101.45/85 since the release of the FOMC minutes but has ended up roughly in the middle of the range, where it will no doubt sit, at least until the BOJ decision later on today. No change is expected from the BOJ and the tone of the statement/press conference will provide the direction.

Having broken below the 200 DMA (101.75), the dollar is currently sitting on support at 101.57 (61.8% of 100.82/102.80), below which would revisit the session low of 101.44 (101.46; 76.4% of 100.82/102.80). A break of this level would trigger stops and head towards the recent low at 101.23, below which would open up 101.00, and lower, towards the 9 May low at 100.80.

On the topside, the 200 DMA needs to be regained in order to provide some sort of stability. The 100 HMA is at 101.86, above which could see a run up to 102.00.

For the time being continue to use the day’s range as a guide, with the hourly charts suggesting that  we might have a bit of a run higher, but overall not looking for a great deal.

Economic data highlights will include:

BOJ IR Decision/Statement/Press Conference

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USD/JPY: 4 Hour

GBP/USD: 1.7150

Cable continues to chop around above 1.7100, having today bounced off a 1.7093 low, but looks set to retain an overall firm tone given the differing interest rate outlooks from the BOE and other major CB’s. Today’s BOE IR decision is expected to remain unchanged, but the outlook does suggest that we could yet be in for a rate hike late this/early next year while at the same time, Mario Draghi today retained his accommodative tone for rates within the EU and thus cable looks set to remain pretty much underpinned, particularly on the cross (EURGBP).

Technically, the 4 hour charts look pretty flat and it could be that the choppy trade continues, but if Cable can overcome the 1.7180 high it could make a more concerted attempt on the barrier protecting 1.7200. Above there, there is not a whole lot of resistance until 1.7331 (50% pivot of the long term move from 2.1160/1.3547). Beyond that, there is not a great deal to stop Cable heading to the August 2008 high, which is not to be seen until 1.7516. If we do break 1.7200, it could be rather volatile, so keep stops tight.

On the downside, back below 1.7100 would head back to the recent low at 1.7085. It does not look likely to head down here today, but if wrong, further support would be seen at the previous 1.7060 peak. Below there would see further bids at 1.7000 and then at 1.6975 (23.6% of 1.6692/1.7062) although this looks unlikely to be seen of a while. If wrong, a break of this level would head back to the June 25 low at 1.6950, below which, would see 1.6921 (38.2%).

For the time being use 1.7120/1.7180 as a guide, with a chance of a test of the 1.7200 area, which will be well protected, but decent stops are said to lie above.

Economic data highlights will include:

BOE I/R Decision/AP Facility

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GBP/USD: 4 Hour

USD/CHF: 0.8910

The dollar is a bit lower today, following the FOMC minutes, and remains within the channel that currently dominates the price action. Further losses look possible and below 0.8900 would see a potential test of 0.8885, with stronger support at the 100 DMA at 0.8870. While I don’t think we are headed below here today, a break would see the chance of a run back to last week’s low at 0.8855, below which, look for further support at 0.8830/40.

On the topside, the 200 HMA is close by at 0.8915, above which would suggest a run up to the 100 HMA now at 0.8935.  Above this the 200 DMA is at  0.8948, which lies right ahead of the top of the short term channel at 0.8955 and should be strong resistance, but a break of which would hint at a run back up towards the previously troublesome 0.8995/0.9005 area.

Look for 0.8925/0.8885 to cover it today

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USD/CHF: 4 Hour

AUD/USD: 0.9410

The Aud remains firm, above 0.9400, as we head towards today’s Jobs data, at which the unemployment rate is tipped to rise to 5.9%, with an overall addition of 12K. Keep an eye on the participation rate. Other data will come from China Trade balance (exp+35bio).

It looks as though it is going to remain choppy, close to 0.9400, although a stronger jobs number would propel it towards 0.9425, where decent sellers are said to lie, and beyond, to the 10 April high at 0.9460. Beyond this would then head on towards  0.9495(76.4% of 0.9757/0.8660) and last weeks top at 0.9505,  a break of which, there would be little to stop the Aud heading towards the 6 June high at 0.9543. Above here, the long term objective from the major head/shoulder reversal is now at 0.9665.

If the data fails to impress, then back below 0.9400 would see a run down to 0.9380 and possibly the 50% pivot of 0.9210/0.9505 at 0.9355, where the rising trend line now sits and will provide support. I don’t see it below here today, but if wrong, further declines could test bids at 0.9335, ahead of last week’s 0.9328 low and 0.9320 (61.8% of 0.9220/0.9505/18 June low). A break of this would most likely see an acceleration down through 0.9300 to 0.9275 (76.4%), but not for a while.

Look for 0.9400/60 to cover it today, with a bias towards the topside.

Economic data highlights will include:

Unemployment, China trade Balance, New Loans

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AUD/USD: 4 Hour

NZDUSD: 0.8820

The Kiwi keeps marching higher, after some choppy trade following the FOMC minutes, and having bounced off a session low of 0.8781, it is currently sitting just below session highs of 0.8829.

 The NZ PMI is due shortly, and if upbeat, the Kiwi will most likely attempt to try and break above the July 2011 high at 0.8842 and eventually to the top of the long term channel, now at around 0.8882, where, if long, I would be taking profit and possibly going short.

On the downside, 0.8800 and then the session low at 0.8781 provide the near-term support. The short term charts look positive and the Kiwi does not look like going below here today, but if wrong the rising trend support, now at 0.8755 should see decent bids.

 Economic data highlights will include:

NZ Business PMI, House price Index

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NZD/USD: 4 Hour