Currency Updates:
U.S. Dollar Trading (USD) the Dollar pared back some of Friday’s gains as US stocks stabilized and bounced into the close. USD/JPY is getting a lot of attention with the very quiet major beginning to stir with daily gains towards the key top side resistance at Y80. Looking ahead, Presidential Debate.
The Euro (EUR) consolidated above 1.3000 with most of the buying seen on the EUR/JPY which moved above Y104 and is targeting Y105 in coming sessions. The EUR/USD is in a holding pattern while the markets wait for further news regarding Greece Aid and Spanish Bonds buying. Risk events this week include FOMC on Wednesday which is critical for long term USD weakness.
The Japanese Yen (JPY) the currency in focus with a string of recent gains getting attention and technical calls for more topside on the USD/JPY and the crosses. Investors talk of global currency wars in which Japan has let other currencies weaken at the cost of Japanese exporters.
The Sterling (GBP) was weaker than most with the bounce to 1.6050 fading and we closed at 1.6000 once again. The bears are looking for a break and are getting help from the EUR/GBP which is pressuring the topside. GBP/JPY is supporting the Pound however with the popular Yen cross in a clear uptrend as the Yen is sold off across the board. Looking ahead, Bank of Canada Meetings forecast at to hold at 1.0%. Also BOE Governor King Speaks.
Australian Dollar (AUD) the major found support at 1.0300 before bouncing with the Euro. The outlook is negative for the Aussie Fundamentally but the FX market works a lot with correlations and if global stock markets rally then the AUD/USD should be dragged higher.
Oil & Gold (XAU) Gold stabilized with the break of the key $1730 level failing to lead to a major move lower. After stabilizing we have grinded back to the $1730. OIL/USD found resistance near $91 and fell sharply back to $89 as the selloff in Oil continued.
