No change at the Fed it seems

<p>Risk trades positively following Janet Yellen’s testimony as there was no surprise that she has started her tenure as Fed Chairman in a dovish mode […]</p>

Risk trades positively following Janet Yellen’s testimony as there was no surprise that she has started her tenure as Fed Chairman in a dovish mode although I have to say I’m surprised at the lack of volatility in the FX markets. The main take-away for me was that she reiterated that there was no time frame for tapering and pushed growth as a sustained priority which leads me to look at the FOMC minutes next week for hints that the Fed could be starting to look for a dual QE mandate for growth and unemployment.

The risk on trade has seen the Nikkei rally 2% overnight and back above the physiological 15,000 level, which kept USD/JPY above 100.00. 100.60 is seen as the next hurdle, with reports that corporate Japan is confident on PM Abe’s growth strategy, so much so that they are refraining from aggressively hedging.

This morning I would expect some volatility around the release of the EU CPI data following the ECB’s rate cut last week with the US session bringing us second tier data in the form of the Empire State manufacturing survey and industrial production.

 


EUR/USD

Supports 1.3390-1.3360-1.3295 | Resistance 1.3500-1.3565-1.3610

 


USD/JPY

Supports 99.20-98.40-97.80 | Resistance 100.60-101.55-102.10

 


GBP/USD

Supports 1.6055-1.5985-1.5925  | Resistance 1.6105-1.6125-1.6260

 

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