AUD/USD: 0.9420EUR/USD: 1.3535In a fairly uneventful session the Euro is near its highs after Janet Yellen reiterated that interest rates will stay low for the foreseeable future, which although it is not new news, is keeping the dollar generally under some pressure. Her comments were counteracted somewhat by the Fed's Dudley, who said that he was growing more hopeful that the economy is improving, which capped further Euro gains..
Also weighing on the dollar today, the Chinese central bank said it would gradually exit from regular intervention in the foreign exchange market and would liberalise the Yuan, with the dollar being perceived as the main loser, as a "reserve" currency.
Earlier in the day, the German ZEW economic sentiment rose to 56.4 in November, hitting the highest level since October 2009, above expectation of 54.0.
In the coming session all will be on hold until around 11.00 AET when Bernanke will be speaking, when we might see some volatility. Later on there is a fair bit of data to be released, particularly from the US, with the focus to be the FOMC minutes of the October meeting, which if they are particularly dovish will continue to keep the dollar under pressure.
Technically, the Euro continues to respect the rising trend line, which now has a base at 1.3490 and looks as though it is attempting to try and push a little higher. The momentum indicators are not strong though and it may be that we spend some more time close to 1.3500, at least until the US gets going, later in the day, although in the meantime, keep an eye on Bernanke.
The Euro has so far failed to take out 1.3550 and needs to do so in order to approach the daily Kijun at 1.3562, which would be the next hurdle. The daily momentum indicators though are looking increasingly positive, and thus, if we do push through the near term resistance, look for a run up towards 1.3600, 1.3624 (61.8% of 1.3832/1.3294) and possibly 1.3700 (76.4%).
On the downside, the strong support lies at the rising trend line at 1.3490. If we break below this there will be bids at the 1.3565/75 area and then at the previous rising lows at 1.3432, 1.3418 and 13390. If we go under there we are likely to find bids at the 100 DMA 1.3365. Below that would see an acceleration towards the previous low at 1.3290 and the Weekly Kijun at 1.3287, and should therefore be strong, ahead of 1.3274 (76.4% of 1.3105/1.3832).
I think that we could squeeze a little higher and for the time being suspect that a range of 1.3490/1.3585 could cover it.
Economic data highlights will include:
Bernanke Speech, German PPI, US CPI, Retail Sales, Business Inventories, Existing Home Sales, FOMC Minutes.
