FX markets trade within tight ranges as Yellen takes a levelled approach

<p>The FX markets continue to trade in tight ranges as risk trades with a feel good factor. Federal Reserve Chair Janet Yellen stuck to the […]</p>

The FX markets continue to trade in tight ranges as risk trades with a feel good factor. Federal Reserve Chair Janet Yellen stuck to the Fed line in her first testimony yesterday and gave a more levelled approach than her usual dovish tone whilst reiterating that the US jobs market is ‘far from complete’. The US House had approved a bill to extend the Federal government’s borrowing, which would suspend the debt limit and allow the government to borrow until March 16 next year.

Chinese trade data came in higher and kept the good vibe going. The latest customs report shows January exports rose 10.6% year on year, with imports also rising by 10.0% over the same period. The data is surprising given the traditional slowdown for the Chinese New Year.

The proud pound will be the focus this morning when the quarterly inflation report is released at 10.30am, with many speculating that the bank will lower its employment threshold and adjust forward guidance. Although I feel that Governor Carney has reiterated many times that the unemployment rate is not a trigger point as they evaluate the wider spectrum of the labour market. I believe he will acknowledge the recovery in the UK economy whilst upgrading growth forecasts.

 

EUR/USD

Supports 1.3620-1.3580-1.3460 | Resistance 1.3655-1.3685-1.3740

 



USD/JPY

Supports 102.30-102.00-101.60 | Resistance 102.85-103.00-103.60

 



GBP/USD

Supports 1.6380-1.6350-1.6270 | Resistance 1.6470-1.6520-1.6580

 

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