*Good morning/afternoon everyone!* The U.S. dollar is trading lower against most of the major currencies this morning as risk appetite improves after yesterday’s brutal selling. Stock futures are up, helping to bolster pairs like EUR/USD and USD/JPY. However as we begin the NY session, the decline in Treasury yields could also tip the scale and push USD/JPY lower. Yen crosses on the other hand will take their cue from stocks today. The currency most vulnerable to weakness is the Canadian dollar because oil prices are down more than 2% after President Trump tweeted that he hopes Saudi Arabia and OPEC will not cut oil production because he thinks oil prices should be much lower based on supply. Despite a softer Eurozone ZEW survey, EUR/USD is trading above 1.1250 on the hope that progress could be made on the Italian budget front. the expectations component of the ZEW surely also increased. The best performing currency this morning is sterling which is up on higher wages (despite a higher unemployment rate) and continued Brexit optimism. On the Brexit front, we are getting closer to a deal but with some counterproductive headlines, traders are still reluctant to overload sterling positions but when an announcement is made, we can almost be assured that there will be a strong followup rally. AUD and NZD are also up from yesterday but having risen strongly in Asian trade, they are mostly consolidating and even weakening slightly. We also have our eyes on the Swiss Franc which appears to be topping below 1.0130. *The MAIN THEMES I see today are* +EUR +CHF -CAD -JPY *Trading Biases* +EUR, +CHF, +GBP, -CAD, -JPY mildly +AUD, +NZD, -USD *Today’s Initial Trades* Here’s the summary – 1. Buy EURCAD at 1.4885, Stop at 1.4857, Target 1.4912 2. Buy EURUSD at 1.1247, Stop at 1.1219, Target 1.1275 3. Buy AUDCAD at .9531, Stop at .9503, target .9559 4. Sell AUDCHF at .7270, Stop at .7298, Target .7242

Swing

*Good morning/afternoon everyone!*

The U.S. dollar is trading lower against most of the major currencies this morning as risk appetite improves after yesterday’s brutal selling. Stock futures are up, helping to bolster pairs like EUR/USD and USD/JPY. However as we begin the NY session, the decline in Treasury yields could also tip the scale and push USD/JPY lower. Yen crosses on the other hand will take their cue from stocks today. The currency most vulnerable to weakness is the Canadian dollar because oil prices are down more than 2% after President Trump tweeted that he hopes Saudi Arabia and OPEC will not cut oil production because he thinks oil prices should be much lower based on supply. Despite a softer Eurozone ZEW survey, EUR/USD is trading above 1.1250 on the hope that progress could be made on the Italian budget front. the expectations component of the ZEW surely also increased. The best performing currency this morning is sterling which is up on higher wages (despite a higher unemployment rate) and continued Brexit optimism. On the Brexit front, we are getting closer to a deal but with some counterproductive headlines, traders are still reluctant to overload sterling positions but when an announcement is made, we can almost be assured that there will be a strong followup rally. AUD and NZD are also up from yesterday but having risen strongly in Asian trade, they are mostly consolidating and even weakening slightly. We also have our eyes on the Swiss Franc which appears to be topping below 1.0130.

*The MAIN THEMES I see today are*

+EUR
+CHF
-CAD
-JPY

*Trading Biases*

+EUR, +CHF, +GBP,
-CAD, -JPY
mildly +AUD, +NZD, -USD

*Today’s Initial Trades*

Here’s the summary --

1. Buy EURCAD at 1.4885, Stop at 1.4857, Target 1.4912
2. Buy EURUSD at 1.1247, Stop at 1.1219, Target 1.1275
3. Buy AUDCAD at .9531, Stop at .9503, target .9559
4. Sell AUDCHF at .7270, Stop at .7298, Target .7242

Can AUDUSD Push Past .8000?

Can AUDUSD Push Past .8000?

Chart Of The Day

The Aussie has been on a quite a tear lately picking up nearly 500 points since the middle of December mainly on anti-dollar flows. But as it has approached the key resistance at the 8000 figure the pair has stalled.

Data from Down Under has been good but not great and therefore is unlikely to change RBA’s neutral posture anytime soon. As we noted earlier today, “Australian employment data beat to the upside printing at 34K vs. 9K eyed as labor conditions Down Under continue to show robust growth. Aussie popped on the news but quickly retreated as the .8000 level is proving to be formidable resistance to bulls. Although the job picture in Australia shows steady improvement, wage growth remains subdued and RBA is likely to remain resolutely neutral especially with the currency trading near the .8000 level”

For now, the 8000-8100 corridor remains the key resistance barrier and with triple top keeping a lid on any move higher, but a break about that level would send the shorts scurrying and propel the pair towards the next target at.8500.

GBP/JPY – Another Push Higher Likely

GBP/JPY – Another Push Higher Likely

Chart Of The Day

GBP/JPY – Another Push Higher Likely

We believe that GBP/JPY will be headed higher this coming week because we are bullish GBP and we are bullish USD/JPY. There’s a tremendous amount of data scheduled for release from the U.K. including for the first time ever – the simultaneous release of the BoE monetary policy decision, MPC minutes and the Quarterly Inflation Report. Forty five minutes later, BoE Governor Carney will hold a press conference similar to the one that ECB President Draghi holds after his meetings. Given recent comments from U.K. policymakers, we believe that the risk will be to the upside for the pound because the central bank is moving closer to raising interest rates. Across the pond, investors love U.S. dollars and as long as Friday’s non-farm payrolls report is decent, it should be enough to lift the greenback. The hawkishness of the Bank of England and the Federal Reserve should take GBP/JPY above 194.

Technically, GBP/JPY is consolidating between 191.70 and 194.40. If it breaks to the upside and we think it will, it should be a clear shot to the June highs. After that, 200 is in focus because not only is it a key psychological level but also the 61.8% Fibonacci retracement of the 2007 to 2011 decline. However if GBP/JPY breaks below 191.70, it could sink down to 190 at which point there is a risk of a double top. With that in mind we don’t think the uptrend will break.

USD/JPY – Will FOMC Push It to 125.00?

USD/JPY – Will FOMC Push It to 125.00?

Chart Of The Day

Tomorrow all eyes will be on the FOMC meeting which promises to be the marquee economic event of the week. The key question for the market is whether the Fed will hint that its ready to hike rates in September or delay any action until December.

The economic data has been mixed with labor numbers continuing to impress, but wage growth and consumer sentiment lagging. In fact today’s consumer sentiment drop was one of the steepest in recent memory and bodes poorly for future spending. That’s why the market is at a standstill and nowhere is that reflected more clearly than in USD/JPY which has been ranging between 123.00 and 124.00 for the better part of this month.

If the Fed does signal a willingness to hike the pair could snap out of its slumber and take out the key 125.00 level on it way to retest the recent swing highs. On the other hand if the Fed continues to equivocate than USD/JPY could tumble towards 122.00 as speculative long bail out of the pair