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Forex Trading StrategiesJPY strength continuing ahead of key Bank of Japan monthly report and Fukui press conference tonight. AUD and CAD weak on falling commodities.
US Treasury Auction yesterday shows slack demand again. Further auctions today and tomorrow possibly key for the USD view.
MAJOR HEADLINES â€“ PREVIOUS SESSION
â€˘ RBA leaves Cash Target unchanged at 5.50% for 11th month in a row
â€˘ $21 Billion US 3-year Treasury Auction yesterday showed least bids in a year and low foreign interest.
â€˘ UK Nationwide Consumer Confidence rose 2 points
â€˘ US Weekly Consumer Confidence dropped 4 points
AUD and CAD have been weak, while JPY has maintained much of its recent strength in the Asian session
THEMES TO WATCH â€“ UPCOMING SESSION
It looks like we may have an interesting cocktail for the markets in the coming days. All of the JPY strength furor yesterday was likely caused by the upcoming Bank of Japan monthly policy report and press conference from Governor Fukui tonight at . This is a key event that will likely determine whether the JPY strength continues unabated or whether we get a turnaround. We're rather a fan of drama - and looking across the markets at the sell-off in stocks and commodities - perhaps the drama will continue. In any case - be ready for volatility in your JPY positions!
At the same time, the auctions of US treasuries continue to show a slowdown in demand and a drop in the percentage of indirect foreign bidders - a sign that capital flows that are needed to support the USD may be threatened. Today's 10-year note auction and the 30-year T-bond auction tomorrow will be key for US interest rates and the USD view, as will Friday's US Trade Balance number.
The commodity currencies continue to suffer, with AUD smacked for big losses on the unchanged view from the RBA and more importantly, the massive drop in metals yesterday. The pressure on AUD will continue as long as metals are weak. The same goes for CAD and oil. 1.2000 in USD/CAD soon?
Note: the support/resistance levels used in the matrixâ€™s of this document are levels derived from yesterday high, low and close. Reference in the text to other support/resistance levels will occur.
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