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*Good morning/afternoon everyone!*
The U.S. dollar is trading higher against the Japanese Yen and euro this morning but aside from that we haven’t seen any consistency in the dollar’s performance as the greenback is trading lower versus sterling and the commodity currencies. Yesterday’s retail sales and Empire State manufacturing survey were unambiguously strong and with U.S. rates pointing slightly upwards, we believe USD/JPY will add to its gains ahead of today’s FOMC minutes. The market does not expect the Fed to talk rate hikes, the report is not a big market mover, we know there will be concerns about inflation but the central bank is also committed to reducing its balance sheet next month. The big story this morning were the reports that ECB President Draghi may not be make a major monetary policy announcement at Jackson Hole next week. As the euro has been trading heavy for the past few weeks, this announcement could be what finally takes EUR/USD below 1.17. We haven’t seen a close below that level since July 27th – but that could change today. GBP is up on the back of firmer wage data but AUD is the best performer and with no data on the calendar, the move has been attributed to the defense of large option expiries.
*The MAIN THEMES I see today are*
+USD, +GBP, +CAD
-EUR, -NZD, -JPY, -CHF
*Today’s Potential Ideas*
1. Buy USDJPY at market now 110.79, Stop 110.39, Target 110.99
2. Sell EURGBP at market now 0.9091, Stop at 0.9131. Target 0.9071
3. Sell EURUSD at market now 1.0701, Stop 1.0741, Target 1.0681
Cancel ALL pending orders by 3:30PM NY / 19:30 GMT / 5:30AM AEST
Close ALL open day trades by 4PM NY / 20 GMT / 6AM AEST