The US Dollar has fallen today vs the JPY amid some moderate risk off in the Asia session (NKY down -1.08%). US futures are currently trading up slightly while EZ futures are down (4:00 GMT). JPY CPI is the major event risk on the calendar which is expected to come in at 1.4% vs 1.3% prior (23:30 GMT). The USD also fell against the NZD after the RBNZ hiked rates from 2.75% to 3.00% as expected. Gold is continuing to consolidate around $1285.
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There is a fair amount of event risk today, here is the calendar with medium and high market moving potential.
AUD/USD may continue to fall after weaker than expected CPI data yesterday, it has put in a bearish engulfing candle and closed below the 0.93 level.
GBP/USD top still seems to be a possibility but the outlook is clouded for now with GBP rate hike speculation high with last weeks GBP unemployment data coming in very strong and the Federal Reserve coming off as dovish. For now we continue to hold a small short (this is a speculative counter-trend trade). The trend has been up since August 2013 but it may start to stall since it is coming into major resistance at 1.70. The bearish engulfing candle hints a turn lower may be in the future.
NZD/USD is rising as expected after the RBNZ hiked rates 25bps from 2.75% to 3.00%. Follow through is questionable because the RBNZ has made it clear that they want to keep the exchange rate around current levels. For now we are holding a small long. Look for a bullish RSI break for possible NZD/USD continuation.
USD/JPY is facing some near term trend line resistance dating back to the beginning of 2014. RSI has now turned from neutral to bearish under 50. The fact the it put in doji candle shows some market indecision. With that being said, we expect USD/JPY to rise in the longer term and see any pull backs as possible buying opportunities. Currently USD/JPY is trading around lows but may recover later in the session. Look for 102.2 and 101.9 for possible support.
USD is facing some short term reaction low resistance and may consolidate for now vs EUR and GBP while rising against AUD. Longer term we expect the USD to rise overall as the FOMC continues to Taper.
Gold remains in a downtrend in the longer term since mid 2012 and is currently facing trend line resistance as well as $1300 resistance. Gold is currently consolidating around $1285.
SPX500 has been up 7 days in a row, a pullback may be coming soon if all time highs can not be breached.