The EURUSD is trading in the range between 1.2580 and 1.2680 ahead of the eagerly awaited FOMC Meeting Minutes. The pair reached 1.2675 and corrected down to 1.2580 before rebounding to make a marginally higher high at 1.2685. This has opened up a possible uptrend pattern heading into today's key data. Following a large move higher on Monday the pair stabilized on Tuesday and succeeded in seeking out a new weekly high. A break above 1.2700 and 1.2725 will open up the potential of a reversal of the recent downtrend in the pair. Any negativity about the USD emerging from the FOMC Minutes could kick start a move higher in the EURUSD. Today no economic data is released in the Euro and the main data affecting the pair comes from the US. Looking ahead to tomorrow French and German Trade Balance are worth a look and could affect the pair. Also tomorrow is the GBP Official Bank Rate that is important for fx markets. At present the Euro is under pressure with the pair below 1.30 and still trading below the downtrend channel as seen in the H4. As long as the pair remains below 1.30 and below the downtrend channel, the bias remains bearish.
EURUSD Support areas include 1.2600 1.2500, 1.2425, 1.2300 followed by 1.2200. Resistance levels above are at 1.2600, 1.2700, 1.2800, 1.2900 1.2959, 1.30 figure level, followed by 1.3165.
The USDJPY declined further to 108.08 and is now trading at 108.15. On Monday we hit our first target of 108.40 and yesterday we went through and reached 108.08. The pair has now turned to a short-term downward bias. Please see below our analysis from Monday morning. Here follows our logic from Monday’s analysis piece: “The USDJPY reached 109.90 during the USD rally that followed the NFP. The USDJPY had reached above 110 on Oct 1st and made a sharp pull back to 108. Once the good employment data was released the pair rose sharply but could not exceed previous higher, forming what appears to be a classic head and shoulder formations on the H1. The ominous sign in the chart is that the right shoulder is lower than the left and strengthening the case further is the fact that EURUSD, GBPUSD, AUDUSD, USDCHF and Gold all made new lows, but the YEN did not. If the pair goes below 109 and consequently 108.40 then this could signal a possible reversal pattern. The pair is around the 109.37 and the 108.40 support level remains key." The decline from 109.37 to 108.40 occurred on Monday as seen in the M15 chart, and consequently broke through the key 108.40 level. Now we anticipate a further pullback on the USDJPY. Overnight the Current Account in Japan was lower than forecasted and tonight we await the Core Machinery Orders.
Support levels for USDJPY can be seen at 108.39, 107.50, and 106.50. Resistance to the upside at 109.25, 110, 111, 112, 113.
Crude Oil sunk by more $3 falling from $90.70 and $87.40. The price is trading just above $87.82. Last week Crude declined $7 dollars from high to low and posted a decline of $5 ie 6% in a week. This week is already turning in to a similar picture with crude down over $2.00 and more than 2% early on Wednesday. Today the market awaits the US Crude Oil Inventories, with an increase in stockpiles of 2.1million barrels expected. This will mean an increase in reserves and will push likely push the price of oil lower. At present Oil traders are watching economic growth in the major economies, foremost the US, Eurozone and China and also close attention is being paid to the geopolitical conflicts taking place in the Middle East and Ukraine. The new offensive against the Islamic State could be important in the future price of oil as the war against terror starting in the early 2000s propelled the price of Crude Oil from $10 a barrel in 1999 to $147 by 2008
Support levels for the Crude Oil can be seen at $87.00, $86.00, $85, $83.50. Resistance to the upside at $88, $89, $90, $92.