The US Dollar staged a comeback today after slumping sharply yesterday on news that Summers had withdrawn from the FED Chairman race. The most likely reason for the resurgence has to be that traders are shifting their attention to the FOMC announcement on Wednesday and are positioning themselves for all eventualities. As such, range-trading with defined boundaries is probably the most likely market environment prior to the release.
- EUR/USD: A persistent BID has this pair eyeing 1.3400 and, if breached, 1.3450 which should provide stiff resistance while key support is expected to be around the 1.3240/50 level.
- USD/JPY: A drop in US yields has this pair eyeing the support region at 98.55/65 ahead of key support level at 98. On the topside 99.80-100 should act as pretty strong resistance ahead of the release.
- AUD/USD: After the release of the RBA minutes, expect a trading range to be defined by 0.9230 to 0.9400 area.
- GBP/USD: Provided that there aren't any surprises from today's inflation numbers or their MPC minutes tomorrow, this pair should consolidate between 1.58 and 1.60