Littlefish FX | Nov 19, 2014 05:22AM ET
KEY DATA RELEASES TODAY:
0930GMT GBP MPC Official Bank Rate Votes exp 2-0-7 v 2-0-7
0930GMT GBP MPC Asset Purchase Facility Votes exp 0-0-9 v 0-0-9
1330GMT USD Housing Starts exp 1.03M v 1.02M
1330GMT USD Building Permits exp1.04M v 1.02M
2000GMT USD FOMC Meeting Minutes
OVERNIGHT:
The Asian session has seen a marginally bid USD against the majors, allowing the DXY to bounce off 87.50 support to move above 87.70, albeit still 0.5% away from the recent highs. The printed ranges in EUR, GBP and CHF have all been reasonably narrow but the commodity currencies have extended slightly further.
This all seems to be led by the price action in USDJPY, which managed to make a new 7 year high at 117.42. The Bank of Japan meeting was the main risk event overnight but as expected, it didn’t yield anything particularly new. They acknowledged that the Japan’s economy is expected to continue its moderate recovery trend and that inflation expectations appear to be rising on the whole from a somewhat longer-term perspective.
Elsewhere, there has been a decent move lower in both AUD, with commodity prices continuing to trade lower, with oil and iron ore lower over the NY session. Westpac leading index and skilled vacancies also come in weaker than expected.
Looking ahead, we have the FOMC minutes tonight market thinks there may be some discussion of the potential risks to growth and inflation, a shortfall in global growth, a stronger dollar, and weaker commodity prices, even if they weren’t seen as high enough to be included in the post-meeting statement. Finally, we get BoE minutes, with the market expecting the broad message of the minutes to be the same as October – no urgency over a rate rise. The Minutes may sound less doveish than the Inflation Report since they will give airtime to some of the more hawkish views on the Committee.
OVERNIGHT PRICE ACTION:
KEY TRADES:
FX Pair | Short Term | Position/Date | Entry Level | Target | Stop | Comments |
EURUSD | Bullish | Buy / 19 Nov | 1.2590 | Open | 1.2440 | |
GBPUSD | Bearish | Sell / 14 Nov | 1.5650 | Open | 1.5650 | Risk Free |
USD/JPY | Bullish | Await new signal | ||||
USDCAD | Bullish | Buy / 19 Nov | 1.1350 | Open | 1.12 | |
AUDUSD | Neutral | Sell / 17Nov | 8690 | Open | .8690 | Risk Free |
ANALYSIS:
EUR/USD Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
GBPUSD: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
USD/JPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish
USD/CAD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish
AUD/USD: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bearish
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