The forex markets have moved slowly overnight, ahead of Intel
(
INTC), Altera (
ALTR), and Johnson & Johnson (
JNJ) earnings results
in the U.S. session. Global markets have run out of overnight momentum,
and we are now looking at consolidation at yearly highs in equities and
gold.
Central banks globally are challenged with the removal of
quantitative easing programs, and the removal of Usd liquidity that was
drip-fed into the system over the last 12 months. That will take a
while to unwind, and has an element of the unknown wrapped into it. The
dollar index is holding major support just above the 75.00 range, a
price point that previously has instigated protective long-dollar
orders.
The forex markets may maintain a near-term valuation read that
easily changes from one regional period of trade to another, as the
20:00 EDT Asian, 02:00 EDT European, and 07:00 EDT U.S. futures markets
come to life in anticipation of the commercial needs of each economic
region.
Add in equity earnings season, as noted above, and the
stair-step/elevator set-ups may be easily maintained. We are looking
for the long break of 90.50, or the short break of 88.50 on Usd/Jpy to
signal a market-wide interest in taking the pair one way or the other,
and also see this as a pivotal day for Gbp and Eur valuations. The next
major economic release is the Bank of Japan interest rate decision that
normally hits sometime after 23:00 EDT.
