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The start of the week was dominated by yet another afternoon session, it was the turn of the Canadians to enjoy a bank holiday and US traders didn’t seem to be keen on taking any big positions. The dollar enjoyed a little assistance from the bounce in yields today, but other than that there was nothing really of any importance to move the market. There is some event risk this afternoon in that the central bank heads of the ECB, BOE, BOJ and FED are all participating in the same panel discussion today – I personally suspect that this may turn out to be a dud.
The EURUSD spent most of the afternoon session trying to push through major resistance at 1.1665 – this was the neckline for the head and shoulders formation on the daily chart. The pair did push to 1.1675 but was met with a lot of selling offers that paired the move back down to 1.1665. The sellers will feel somewhat concerned that this pair was not able to break below this level, 1.1675 becomes the key level to watch today – if the buyers can break above then momentum could run.
There is a definite stalemate forming in the USDJPY with the buyers and sellers sparring around the 100 hour MA at 113.57. The day closed above this level yesterday but I think this price point looks vulnerable and am looking for sellers to start building some large offers up there. It may take a day or so for the pair to find its feet but if the sellers build some momentum then I would be interested in looking for some selling opportunities.
In the Zone
Important Economic Data out today
11:30 GBP CPI
Effect: Higher than expected is good for the GBP
12:00 ECB ECB President Draghi Speaks
Effect: More hawkish than expected is good for the EUR
12:00 USD Fed Chair Yellen Speaks
Effect: More hawkish than expected is good for the USD
12:00 GBP BOE Governor Carney Speaks
Effect: More hawkish than expected is good for the GBP
12:00 JPY BOJ Governor Kuroda Speaks
Effect: More hawkish than expected is good for the JPY
15:30 USD PPI
Effect: Higher than expected is good for the USD
- It was interesting to hear BOJ Governor Kuroda mention that they are monitoring developments in the cryptocurrencies. These are the craze right now, I am not sure how to interpret these comments.