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It is quite common to see the Americans attempt to reverse the move during European hours, and this looks like that may be the case again today. The Aussie, being tied closely to gold, appears to be tied to the yellow metal again today. The FX rate of the pair is under the parity level for now, but the bar shape that is starting to form is a “hammer”, which is an extremely bullish pattern for the FX rate of the AUD/USD, if traders can close the day near the area we are in now.

Marked by an oval on the chart is an area that was previously consolidation, which is a natural place to find support for the pair, as there will be plenty of traders that were there pushing the FX rate higher previously. As resistance almost always gets retested as support, this move would not be unexpected, and in truth will be welcomed by traders that missed the original push north on this pair, as there will be a lot of them that have been watching this pair due to the “historic” nature of parity.

Of note on this chart is not only the parity level, but the 0.97 area, which was the previous support for the consolidation area that was pointed out via the oval. The measured move of the consolidation box is roughly 300 pips, which would indicate a potential target of 1.03, which has not been reached. Quite often it will take a second attempt to reach the final destination, and the Americans look determined to make it happen, even with this rest.

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While the pair has surged today, it should be noted that it is currently up against the previous daily trend line that kept it down, and as such, it is a time to wait and see if we can break above it, allowing the FX rate in the pair to climb. What a classic technical analysis move might include is a break above the line, and a retest to confirm that the trend line has held, going from resistance to support.

The FX rate in this pair has been pushed lower and lower for what seems like an eternity, and has been relentless as of late. While the yen is still in an uptrend against most currencies, it is very possible that the currency is due for a secular pullback against most other currencies. Certainly nothing can go in a straight line forever, just ratcheting the FX rate of the currency higher and higher.

Of particular interest for the traders of this pair will be the announcement coming tomorrow from the ECB, and whether or not it can defend form its currency gaining even more, as the dollar is sinking lower and lower. This can give the EUR/JPY pair a lift by proxy, as the euro gains against its largest trading counterpart.

Considering that the signal is showing up on the daily chart, it is likely that the return signal, showing the breakout, the support of the trend line, and the sign to go long will be on the same time frame. If this is to be true, look for this pair to possibly show a long set up in a few trading days, which lines up nicely with all of the announcements coming in the next three trading days.

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The FX rate of this pair often will show what the world is thinking of the dollar more so than euro strength. This is currently one of those times that FX traders have been showing their displeasure with “King Dollar” as the U.S. government and Federal Reserve have made it clear that they have no interest in reigning in excessive spending.

As such, FX traders find themselves at a crossroads.

The 1.40 handle has been significant support and resistance several times over the years, and this year is certainly no different. It is at this place that FX traders will make their judgment on the U.S. dollar, and that the euro might find itself benefiting from America’s misfortunes.

As shown on the chart, there was a parabolic move upwards in the euro / U.S. dollar pair, and a break of that trend line. However, just as currency pairs can break a trend line, consolidate, and break down the trend, they also are perfectly capable of just consolidating before a move up.

The pair has clearly defined boundaries at the moment, and as such should be easy for FX traders to trade. There is a clear heavy resistance area at 1.40 that is weighing on it.

At the same time, there is significant support at 1.37. This pair has been stuck between two levels for a couple of weeks. Any daily close above or below either level shows the direction of this pair for the intermediate term.

For forex markets in particular, the highlight of the meeting was the G-20’s pledge to “move toward more market determined exchange rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies.”

Such a statement is especially meaningful to Yen pairs, for it could be interpreted to mean that further intervention in the currency markets by the Japanese government is now less likely. And if that is indeed the case, there would be little to arrest the strong uptrend in the Yen, especially against the U.S. Dollar. In fact, we see USD/JPY trading near 15-year lows to start this new week.

In terms of the broader economic outlook, the G-20 spoke of the unevenness of the economic recovery, with strong growth in emerging markets and much more modest performance in advanced economies.

All things considered, the G-20 meeting did not offer anything that materially alters the outlook for currency markets. Traders are now left to focus on the next big event risk, which is the U.S. Federal Reserve’s November 3rd policy meeting, which is widely expected to include another round of quantitative easing.

The question now becomes, what action will the central bank take and how big will that action be? With some market commentators bandying about the possibility of $100 billion in Treasury purchases per month, it is not surprising to see the U.S. Dollar sharply lower as markets wait for more clarity.

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All times are given in GMT.

1. Home loans (AUD): Monday, 12:30 A.M. – Australia’s statistics bureau is due to publish a report on the change in the number of new loans granted for owner-occupied homes in August.
2. Trichet speaks (EUR): Monday, 4:00 P.M. – The European Central Bank president, Jean-Claude Trichet, is due to speak at an event in Washington, D.C. FX traders will likely seek to discern clues to future monetary policy in his comments.
3. Consumer price index (GBP): Tuesday, 8:30 A.M. – Britain’s statistics bureau is scheduled to publish this key report on U.K. consumer price inflation in September.
4. FOMC meeting minutes (USD): Tuesday, 6:00 P.M. – The U.S. Fed’s key panel, the Federal Open Markets Committee, is to release the minutes of its latest policy-setting meeting.
5. Jobless claims change (GBP): Wednesday, 8:30 A.M. – The U.K. statistics bureau is to publish data on the change n the number of new claims for unemployment benefits in September.
6. Industrial production (EUR): Wednesday, 9:00 A.M. – Eurostat, the EU statistics office, is due to release this data, which is a leading indicator of economic health. The report measures the month-on-month change in industrial output.
7. Retail sales (NZD): Wednesday, 9:45 P.M. – New Zealand’s statistics bureau is to release this report on retail sales, a key gauge of consumer spending and central to indicator analysis, for August.
8. Trade balance (USD): Thursday, 12:30 P.M. – The Bureau of Economic Analysis is scheduled to publish this monthly report on the difference in value between imported and exported goods and services; Canada will also publish its trade balance. Meanwhile, the U.S. is also due to publish data on producer price inflation.
9. Initial jobless claims (USD): Thursday, 12:30 P.M. – The Department of Labor is due to release this data on the number of workers who filed new claims for jobless benefits during the previous week. The report is often quite influential on the dollar’s FX rate.
10. Core CPI (USD): Friday, 12:30 P.M. – The Bureau of Labor Statistics is scheduled to publish this key report on U.S. consumer price inflation, which excludes food and energy. The data is central in setting interest rates and is an important measure of purchasing power. At the same time, the U.S. is also to publish data on retail sales. Later in the day, the University of Michigan will release a closely followed survey of U.S. consumer sentiment.

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The bureau is expected to say Australian employers added 3,000 new jobs during the month, after shedding 54,000 in August, according to two currency market trading news outlets.

The bureau is scheduled to release the report at 12:30 P.M., GMT; as such, the data is likely to dominate European afternoon currency market trading – although FX traders will also eye the publication of the U.S. unemployment rate, which is due to occur at the same time.

According to EUR USD analysis, should U.S. employers add more jobs than expected in September, EUR/USD could be pushed toward support around Tuesday’s low, 1.3637.

But if the data show a weaker-than-forecast growth in jobs, or even a decrease, the currency pair could be lifted toward resistance around the daily high, 1.4029

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In European afternoon currency market trading, USD/JPY hit 82.11, its lowest since 1995. The currency pair later rose slightly to trade at 82.41, down 0.63percent on the day.

The yen’s gains also came amid speculation that the Federal Reserve will step up purchases of government debt to support the faltering U.S. economic recovery.

According to intraday analysis, USD/JPY was likely to touch support around 82.74 and encounter immediate resistance around the high of Sept. 27, 84.39.

Meanwhile, FX traders were also awaiting the release of key U.S. jobs data on Friday: a government report on nonfarm employment change in September, and the announcement of the U.S. unemployment rate.

The unemployment rate was expected to rise from 9.6 percent to 9.7 percent, two currency market trading news outlets reported.

Elsewhere, the yen surged versus the euro: EUR/JPY traded at 114.51, down 0.88 percent, according to intraday analysis.

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This is what the analysts say about the heavily traded currency pair in the near-term:

According to FXstreet, the euro “is moving sideways against the dollar.” In the Barcelona-based site’s EUR USD analysis, the pair is likely to find near-term resistance around 1.3409 and short-term support around 1.3262.

Forexcylce, meanwhile, believes that “a longer term uptrend from 1.1876 has resumed,” noting that the currency pair’s next target is around 1.36.

The site sees support is at the FX rate of 1.3290, followed by 1.3250. As long as these levels hold, Forexcylce says, the EUR/USD uptrend of recent days will continue.

Actionforex, for its part, sees no change in the currency pair’s outlook. “Intraday bias remains on the upside with 1.3267 minor support intact,” the site says.

According to the currency market trading news site, downside movement “should be contained by [the] 1.3018 / 1.3158 support zone and bring rally resumption.”

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This is what the analysts say about the heavily traded currency pair in the near-term:

According to FXstreet, EUR/USD is “building up;” in the Barcelona-based site’s EUR USD analysis, the pair is likely to find near-term resistance around 1.319 and short-term support in the 1.3015/30 area.

Actionforex, meanwhile, stays solidly on the fence. In the site’s daily report on the currency pair, it notes “Intraday bias in EUR/USD remains neutral at this point… in the bigger picture, outlook is rather mixed for the moment and we’ll stay neutral first.”

Nonetheless, the currency market trading news site sees the currency pair as targeting the 1.333 zone in the long-term, with immediate support around 1.2916.

Forexcylce also expects EUR/USD’s uptrend to continue, as long a key support at 1.2953 holds.

However, the site notes that a breakdown below the FX rate of 1.2953 would “imply that the rise from 1.2587 is complete, then the falling downward move could bring price back to re-test 1.2587 previous low support.”

NEW YORK (Forex News Now) –

This is what the analysts say about the heavily traded currency pair in the near-term:

According to FXstreet, “the overall bias is still positive” for EUR/USD; however, the site quotes a technical analyst as saying there could be a reversal to around 1.292.

In the Barcelona-based site’s report on the trader’s EUR USD analysis, the pair is likely to find initial support around 1.311, short-term resistance at 1.323 and long-term resistance at 1.3335.

DailyFX, meanwhile, sees EUR/USD solidly in an upswing, with medium resistance around 1.32. The site sees medium-range support for the currency pair around 1.291.

Forexcylce concurs that the pair is in an uptrend, believing that a rise to 1.32 is possible. The site notes, however, that holds the same position as DailyFX, noting that a breakdown to FX rate of 1.2930 “will indicate that a cycle top has been formed on 4-hour chart, then another fall towards 1.2587 previous low could be seen to follow.”