The US session has started off brightly but can it be maintained?
USDJPY had already shrugged off the services PMI to push through 104.50 and the new home sales and consumer confidence added more fuel to the fire. US stocks are trading higher but still look a little nervy. Oil has bounced from the support I highlighted yesterday, and things are looking a touch better in the world.
Whether it lasts is anyone's guess. Certainly there's something here for Fed watchers but is it enough to get the market fully out of yesterday's funk and the Japanese stories doing the rounds.
There's nothing that's really changed after all this data and I doubt any of it has changed any minds at the FOMC so I'd be weary chasing this risk rally anywhere. I get the feeling that it won't take much to turn the market smile upside down.
If it does continue, EURUSD could be most susceptible and we could well have a push down to the low 1.09's. Before we do, we'll have to get below 1.0980/85 as a starting point.
EURUSD 15m chart
