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Forex Market UpdateStill no USD strength despite more positive US data!
Bernake's testimony is the big event today. the FX market is waiting for whether or not Bernake will agree with the view of most FOMC members that rate cycle is coming to an end
MAJOR HEADLINES â€“ PREVIOUS SESSION
â€¢ US MBA mortgage applications April 21, out at -17 vs. a prior reading of -7.
â€¢ US durable goods orders March, out at 6.1% vs. 1.8% expected.
â€¢ US durables ex transportation March, out at 2.8% vs. 1.0% expected.
â€¢ US new home sales March, out at 1213K vs. 1110k expected.
â€¢ New Zealand's trade balance March, out at 59.1m vs. -251.0M expected.
â€¢ RBNZ official cash rate April 27, left unchanged at 7.25% in line with expectations.
â€¢ Australia's small business confidence April, out at 50.8 vs. 51.5 expected.
â€¢ Poland's base rate announcement April 27, left rate at 4.0% as expected.
THEMES TO WATCH â€“ UPCOMING SESSION
Big day for the JPY today as the data out of Japan in Asia tonight will set the tone for the week to come as we need to see continuation of solid Japanese picking up, with particular focus on the CPI, if the BoJ should have reason to pick up the pace in their timing to end the zero rate policy. As we mentioned yesterday it will take more then a G7 meeting to strengthen Asian currencies in general.
The market is holding its breath for Fed chairman Bernankeâ€™s testimony today to see if he agrees with the most recent comments from Fed members that "the end of the tightening process was likely to be near" and his thoughts on the risks involved by tightening too much. A dovish statement from Bernanke should give way for a test of 1.2700 in EURUSD in the weeks to come.
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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