Light changes among major currencies so far today

The dollar is little changed in general so far today as the market mood has calmed down after the US CPI report yesterday. As mentioned earlier here, the data doesn’t really change the overall Fed outlook and so we’re back to the drawing board for most dollar pairs after the back and forth action yesterday.

EUR/USD is up 0.1% to 1.0991 but stuck in a 28 pips range so far today. Even USD/JPY is down by just 0.1% to 144.60 but holding within a 33 pips range on the day. That exemplifies the lack of appetite for the most part, even as equities are starting to look a little more nervous during the session.

There are two dollar charts that I’d keep an eye out for before the weekend though.

The first and most obvious being USD/JPY as it comes close to clipping key resistance at 145.00 again. Japanese officials have been less verbal to speak out against the recent rise in the pair, so perhaps that may give the green light for a further move higher – especially since bonds are puking hard.

The other one is AUD/USD as after the double-top near 0.6900, the pair is now finding itself hitting a bit of a double-bottom at the lows for the year at 0.6500. The latter remains a critical daily support level and a break below that will invigorate sellers to go searching for a potential drop towards 0.6200 next.

The timing couldn’t be any worse for the aussie as it comes against a backdrop of:

1. Risk sentiment looking rather poor as equities are seeing rallies sold into
2. China woes continue to deepen, even if Beijing is defending the yuan currency
3. RBA moving to the sidelines alongside the Fed, keeping rate differentials in favour of the US dollar