The US Dollar was bearish against all of its major pairs on Wednesday. On the US economic data front, the Mortgage Bankers Association’s Mortgage Applications slipped 0.6% for the week ending October 16th, compared to -0.7% in the prior week. Finally, the Federal Reserve’s Beige Book stated that all districts have seen continued growth at a moderate pace since the downturn, however there is concern about the restaurant industry as cold weather approaches since they have relied on outdoor dining. Employment increased across all districts, although growth remained slow. Prices rose modestly across all districts, most notably consumer prices of food, automobiles and appliances increased significantly.
On Thursday, Initial Jobless Claims for the week ending October 17th are expected to decline to 870K, from 898K in the week before. Continuing Claims for the week ending October 10th are expected to fall to 9,625K, from 10,018K in the previous week. The Leading Index for September is anticipated to rise 0.6% on month, compared to +1.2% in August. Finally, Existing Homes Sales for September are expected to jump to 6.30 million on month, from 6.00 million in August.
The Euro was bearish against most of its major pairs with the exception of the CAD, CHF and USD. In Europe, the U.K. Office for National Statistics has reported September CPI at +0.4% (+0.5% on month expected). September PPI was released at -0.1% on month, vs +0.1% the previous month.
The Australian dollar was bullish against most of its major pairs with the exception of the NZD and GBP.
Looking at the major pairs, the USDJPY was under the most pressure in Wednesday’s trading. The pair declined 94 pips to 104.56 as the USD continues to show weakness across the board. The decline is in the same direction as the longer term trend as the pair remains inside a declining trend channel. Key resistance can be seen at the 106.96 area where a break above would invalidate the bearish trend. Traders should watch closely the 104.20 support level as an attempt was made to break below on the 21st of September which was rejected.