Daily FX information

Crude oil is little changed in overnight trade as the commodity awaits a much-anticipated report on U.S. petroleum inventories on Thursday. A larger-than-normal build will may lead to more underperformance by oil, while a bullish surprise may lead to a breakout.

The Aussie-Dollar spiked above 0.92 following the release of strong employment data. Will Thursday's risk trends reinforce the bullish move?

Established trends are maintained in the Asia session, ahead of the Bank of England rate decision. The Aussie-Dollar has attempted to breakout on strong economic data, but tomorrow’s risk trends will need to reinforce the move.

No matter how hard the dollar tries, its fundamental path is currently bound to underlying investor sentiment. This isn’t a unique relationship by any means. In fact, cross market correlation is near its highest level in over a year – a product of structural developments that include increased globalization and access to capital markets.

The US Dollar pulled back as global stock and oil prices recovered but the bearish technical setups created with yesterday’s selloff have not been invalidated, hinting the greenback remains poised to advance amid renewed risk aversion.

Student’s Question:Here's the support line. But I am still confused as to when should I enter the trade and when should I exit the trade according to the historic chart I posted?

The euro is weak across the board. In fact, the EURAUD is trading at a 19 year low and an objective is 1300 pips lower.

U.S. stocks posted their largest gain in nearly two months despite a report that the number of mortgage applications declined for the first time in six weeks.

Once again, we are left to qualify the sincerity of investor sentiment. Wednesday’s session brought a clear advance in the appetite for risk; but considering the lack of a distinct trend for equities, crude and even progress on gold, it seems traders are still waiting.

Intensely choppy forex market price action has made short-term US Dollar forecasts especially difficult, but evidence of sentiment extremes in the Japanese Yen suggests that the USDJPY may soon reverse. Forex futures positioning data shows that Non-commercial traders are near the most net-long the Japanese Yen (short USDJPY) since the USDJPY bottomed in late 2009.

The Bank of England is widely expected to maintain its current policy in September, and the British Pound could face increased volatility following the rate decision as investors weigh the prospects for future policy.

The AUD/CAD is looking to test trend line support following a 25 bps rate hike from the BoC, despite the central bank’s slightly lower outlook for growth.

Potential exists for a USDJPY reversal and strength up towards 8800-9000 before the longer term downtrend resumes.