Nov. 19: Asian session
US dollar stayed generally weaker on Tuesdays morning on expectations that the Federal Reserve will keep its easy policy stance and on sharpened appetite for risk following China’s pledge to expand economic freedoms.
EUR/USD is trading just above $1.3500. The pair’s staying above the daily Ichimoku Cloud. On Monday the pair tested $1.3541, but then closed at $1.3505. More resistance comes at $1.3560 (50% Fibo of the decline from October). Watch German ZEW economic sentiment at 10:00 GMT. Later in the day there will be a bunch of the Fed speakers (Dudley at 15:00 GMT, Evans at 19:15 GMT, Fed Chairman Bernanke tonight at 00:00 GMT). New York Fed President William C. Dudley said yesterday he’s more hopeful about the economy while indicating no change in bond buying. GBP/USD is trading a bit on the downside, in the $1.6100 area after testing $1.6148 yesterday.
USD/JPY is trading under pressure for a second day in a row. The pair dipped to 99.60 earlier in the session, has recovered some ground as of writing, but still remains below the key 100.00 mark. Demand for the “safe” yen was raised by the Fed-induced decline in US and Japanese share prices. USD/CHF is trading at the lower edge of the daily Ichimoku Cloud and the 55-day MA in the 0.9125 area. The pair spiked down to 0.9095 yesterday, but then managed to close at the edge of the Cloud.
AUD/USD has rebounded to $0.9390 on Tuesday. Yesterday the Aussie attempted to strengthen, but reversed down from $0.9420 and dipped to $0.9350. The RBA minutes released today show that the central bank saw it prudent to hold rates unchanged, but left the door open for further easing if needed. NZD/USD weakened to $0.8300 after having peaked at $0.8400 on Monday. New Zealand Q3 CPI came below the expectations at 0.2% (forecast: 0.3%, prior: 0.4%). USD/CAD rose to 1.0435 after hitting 1.0414 yesterday. The bulls are probably going to try closing this week’s opening gap (1.0445), small as it is.