AUD/USD: 0.9000EUR/USD: 1.3730PMI's, US CPI ahead.The FOMC minutes showed a steady commitment to the tapering programme which, combined with the issues in the Ukraine put a bit of a safe haven bid under the US$, while at the same time putting some mild pressure on the Euro. Elsewhere Cable was busy again after a surprise rise in the unemployment data. Looking ahead, the flash PMI's are due today, starting with China, and then later in the day we get the US PPI.
The Euro had a pretty steady session heading into the FOMC minutes, confined to a 40 point range and there is not too much to add from a technical point of view.
The FOMC minutes, which had little initial effect on price, but indicated that the Fed appear to be on track to maintain the tapering programme and that they will change their guidance as unemployment falls. Some board members saw the possibility of raising the Fed Funds rate in the near future which helped to underpin the dollar and it made some very minor gains, but at the time of writing, there is little change.
Technically, the Euro has today been up to a high of 1.3772, and this needs to be overcome in order to make a run towards 1.3800 (1.3792: 76.4% of 1.3892/1.3476) and then possibly to the important descending trend resistance at 1.3825. It does not look to me as though we are going too much above 1.3770 in the short term, and the 4 hour charts may well be turning over to point a bit lower, possibly signalling that a top is already in place.
There seems to be plenty of support at the current levels around 1.3730 though, and this needs to be taken out in order to see a run to 1.3700 and possibly lower. Sub 1.3700 (23.6% of 1.3476/1.3772) looks a bit unlikely in the short term as well, as there is plenty of support just below it, but if we do head lower the points to watch are at 1.3680 (weekly Tenkan), 1.3675 (daily cloud support) and 1.3670 (200 HMA). I don’t think we are likely to see it down here today, but if wrong, then further bids would arrive at 1.3660 (38.2% of 1.3476/1.3772).
The upcoming session sees the flash PMI data from the EU and the US, and before that, from China. Later in the day the focus will turn to the US inflation data (exp 0.1% mm/Jan, 1.6% yy), which if very benign, could again see the dollar come under some pressure.
In the meantime use 1.3685/1.3770 as a guide with a mild short term preference to trading it from the short side.
Economic data highlights will include:
German PPI, EU Flash Services/Composite, Mfg PMI data, US CPI, Jobless Claims, Flash Mfg PMI, Philly Fed Mfg Survey
Jim LanglandsFX Charts PL
