Traders continued to buy the USD on dips yesterday with EUR/USD touching new trend lows at 1.0350. GBP/USD was under a lot of pressure as stops were hit on a break below 1.2400.
AUD/USD was dragged to fresh multi month lows 0.7220 before rebounding to 0.7270. NZD/USD has broken below its 200 DMA and is collapsing to 0.6920 lows.
Attention is turning to the US stock market with the Dow Jones 30 approaching 20000 a natural target and huge magnet for traders. Last night the high at 19980 tantalizingly close but we may have to wait till later today to test the level once again.
The Bank of Japan left its monetary policy unchanged as expected, even as it raised its assessment of the economy. Bank of Japan Gov. Haruhiko Kuroda said Tuesday that long-term interest rates were at “appropriate” levels, and that he didn’t see the yen’s recent fall against the dollar as a problem. The dovish stance on monetary policy saw the USD/JPY break back above Y118. The USD/JPY has been overbought on the daily chart for the last week and the further we rally the more likely a sharp pullback will occur in coming sessions.
