US dollar mixed on growing anticipation of a taper announcement next week

The Aussie has continued its fall overnight, but is still just above the 0.9000 level after data was released that more workers were added but the unemployment rate is still creeping higher towards the post-crisis high.  JPY has also been active overnight, with the Nikkei dropping due to taper concerns from the US. JPY is following suit, helping cross JPY trades to also rally.

GBP remained pretty flat overnight after its fall yesterday and it looks like there will be more buying at these levels. Some bullish comments from the BCC said that the UK economy is set for the fastest growth in seven years in 2014.

The euro is also very flat in the Asian session, with most of the move coming from the EUR/JPY rally.  Today we have Draghi speaking early on about the ECB policy, then the ECB monthly bulletin explaining how they reached the decision to leave rates unchanged. What to look for here is any mention of negative rates as that seems to be the next possible move  from the ECB and when this could be applied.

The US dollar is looking mixed this morning, being weak against EUR and GBP but strong against AUD and JPY.  Today’s data is retail sales, which is expected to climb slightly and at this time of year it could possibly be higher giving some strength to the dollar. Then there will be the unemployment claims, which are expected to be higher than last but recent good data out with non-farms being higher on Friday makes both these figures important releases today as they will likely add to the speculation of a taper to next week’s FOMC announcement.

Also keep an eye on the SNB Libor rate announcement with monetary policy assessment and then a press conference, worth to keep your eyes on the CHF and comments made likely to cause some action here with the peg still in pace for the EUR/CHF at 1.20 and currently around 1.22, with some suggestions of lowering their inflation forecasts.

EUR/USD

Supports 1.3775 1.3740 1.3685 | Resistance 1.3835 1.3880 1.4000

USD/JPY

Supports 102.40 102.20 101.60 | Resistance 103.00 103.40 103.75

GBP/USD

Supports 1.6340 1.6300 1.6220 | Resistance 1.6420 1.6465 1.6485