Very little of note happened during a quiet Asian trading session with most majors trading in 30 pip ranges.
- The Bank of Japan left official interest rates unchanged at 0.1% and upgraded their overall view for the Japanese economy.
- Market believes their is a possibility, albeit slight, that the Fed could now consider raising rates by 0.25% at its meeting next wek
- Regional stockmarkets gain around 1%, Gold steady at $1017
The prospect of heavy stops above 1.4750 in the EUR/USD has hung over the market for the entire session, discouraging traders and dealers from taking any aggressive short positions. There is also said to be heavy selling between 1.4735/45 which suggests that a barrier option may be getting some protection at 1.4750. The range of 1.4704/34 sums up the trading session perfectly.
Some analysts are now calling a short term bottom in USD/JPY at 90.10/20 where semi-official bids were seen on Monday and yesterday. Even this was not enough to generate enthusiasm in a 90.84/91.22 range and dealers say that turnover and interest, even with the BOJ statement, was very low.
The GBP also enjoyed a quiet session with cable trading 1.6469/1.6501 and EUR/GBP .8916/34. Some light sell orders are seen in the cross at .8945 and more towards .9000. Sell orders also in the cable around 1.6560 and good sized buy orders at 1.6410/20.
The AUD and NZD consolidated their recent gains and with no imminent sign of a sell-off further gains are expected. Order books are also unusually thin at current levels suggesting that not many people expected the market to be trading at these levels at this time. The AUD/USD traded .8722/56.
