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Forex Trading StrategiesJPY slightly weaker in Asia
Not much data out and it was mostly position squaring that was seen ahead of today's FOMC meeting
MAJOR HEADLINES â€“ PREVIOUS SESSION
â€˘ Bidding at the 2-year US Treasury auction proved modestly better than expected, the 2.12 bid-cover ratio and 35.8% indirect bid exceeding the respective averages of 2.04 and 35%. But did little to change the dollar
â€˘ Bank of Japan has decided to raise the minimum interest rate for funds it lends to financial institutions through auctions to 0.01% from 0.001%, according to the Nikkei Shimbun morning edition in Asia. The decision is taken as a step to normalize domestic financial markets following the end of quantitative easing policy.
â€˘ RBA in its semi annual Financial Stability Review says recent developments have been largely favourable, with Australia's banking system remaining well capitalised and highly profitable, and bad debt levels at historical lows.
â€˘ China's FX reserves rose $8.5bln in February to $853.7 bln, overtaking Japan's $850.1 bln reserves at end-Feb, to make China's holdings the world's largest.
THEMES TO WATCH â€“ UPCOMING SESSION
Text from this morning:
The FOMC meeting with a an expected 25bps rate hike today and the post meeting statement seems to be the trigger now if USD weakness is going to kick back in after last week's performance. We will look for signs of a peak in the current rate cycle which would likely send EURUSD for another test of 1.2210. But Friday's US data releases which we will focus on later in the week will certainly support/reject direction after Tuesday.
On the downside 1.1950 support seems to be the last hurdle before heading for a test 1.1860 support and possibly lower. An unclear signal concerning rates from the FED, could make the market nervous as what to expect from rates in the future and the 2005 theme of yields supporting the dollar could once again be the main driver.
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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