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The EUR/USD has broken back above the the 1.49 handle even as the Shanghai Composite (down 1.59%,) Nikkei (down 1.45%) and US equity futures trade lower. The Euro has gained a light bid across the board, pariticularly against the USD on what looks like some corrective activity. It will be interesting to see if the pair breaks the trending 21 hour moving average.

Cable is testing the Resistance region mentioned in the morning. If honoured, we would expect the pair to fall towards 1.62 initially and 1.60 thereafter. If broken, the pair may move up towards 1.6550-1.6600 and beyond that it might continue within the medium term uptrend. The chances are equal. It…

Japan’s Finance Minister had some strong statements about the USD, however trading on session lows the USD continues to weaken against the EUR, even as equities globally move lower. The USD however has remained in its tight session range against the Yen (32 pips.) His comments were as follows:

• Said he could not discuss an exit policy given the state of the economy.
• FX devaluation is bad for the global economy.
• Said he has never voiced support for a stronger Yen.
• US low rate policy reason behind dollar weakness.
• US dollar is still the strongest currency in the world.
• Fujii added that it is appropriate to have strong FX assets in reserves.
• It’s a fact that weak Yen is good for exporters.
• Not right for exports to drive policy making.

There will be greater speculation over an increase in quantitative easing at next week’s Bank of England policy meeting. In isolation, the Sterling fundamentals remain dreadful, especially with a government budget deficit above 12% of GDP this year. There will, however, be further protection from a lack of confidence in…

A wave of USD buying at the London open unwound the better tone in EUR/USD that had emerged during Asian hours. A break below the EUR/GBP0.9100 opened the floodgates for EUR supply and this no doubt kept the pressure on EUR/USD, though the latter has since recovered from the morning’s…

On Monday Dollar/Yen decreased down to 91.57, from where renewed its upward trend to 92.29, closing the day at 92.22. Signals are expected to be rising for now, but any bearish correction should not come unexpected. On the 1 hour chart 92.35 is a key resistance, the break of which…

With a marginal close seen Monday following a retest of its falling channel resistance, another attempt was seen being made at the same resistance today. GBP continues to struggle within the mentioned channel since breaking into it the past week following its failure at the 1.6692 level, its Oct 23?09…

(Oct 28, Wed) Australia CPI – 3Q09: Headline CPI probably rose +0.7% qoq in 3Q09 after a +0.5% gain in the prior quarter. On annual basis, the reading is expected to have risen to +1%, well-below RBA?s target of 2-3%. Inflation in food, clothing and footwear declined as driven by…

Overall, the overnight session was rather undecided, with the major pairs moving in opposite direction. This might have been caused by the S&P futures, which moved up and down without a clear direction or trend during the overnight session, and by the light momentum observed in the market. The euro,…