The Bank of Japan’s monetary policy meeting held earlier today saw interest rates and the central bank’s QQE purchases remaining unchanged as expected. The board members voted 8 -1 to keep monetary policy unchanged while keeping the government bond holdings steady at 80 trillion yen.
The BoJ Governor Kuroda is expected to hold a press conference later in the day. In the overnight session, New Zealand’s GDP data showed a 0.6% increase in the third quarter as expected. The second quarter GDP was revised higher to show a 1.0% increase on the quarter. On a yearly basis, New Zealand’s GDP was seen rising 2.4%.
In the U.S. trading session, the dollar was muted to the news of the Congress passing the tax reforms bill. On the economic front, the NAR reported that existing home sales rose 5.6% on the month in November.
Looking ahead, the economic calendar today will see the inflation data from Canada. The U.S. department of commerce will be releasing the final GDP for the third quarter which is expected to be confirmed at 3.3%.
EUR/USD intra-day analysis
EUR/USD 4 Hour Chart
EUR/USD (1.1866): The euro managed to post another day of gains, marking a three day winning streak. Price action managed to rise above the 1.1843 – 1.1822 region of resistance and the currency pair looks set to target the 1.1920 resistance further up. In the near term, any declines could be limited to the recently breached resistance level. Establishing support here could signal further gains in the short term and validates the upside bias. Alternately, if EUR/USD fails to hold near the support we could expect to see price action decline as the currency pair is likely to settle into a range once again..
USD/JPY intra-day analysis
USD/JPY 4 Hour Chart
USD/JPY (113.39): The USD/JPY managed to push higher, marking a two day gain. Price action is seen attempting to test the previous highs near 113.7. Following the breakout above the resistance level at 113.06 – 112.90, any short term declines could see price falling back to establish support at this level. To the upside, USD/JPY will need to breakout above the previous highs in order to post further gains. 114.00 remains the next target to the upside, while the downside could be limited to 113.00 region.
NZD/USD intra-day analysis
NZD/USD 4 Hour Chart
NZD/USD (0.7007): The New Zealand dollar posted some declines but price action managed to bounce off the lower median line. As price attempts to test the previous highs we see that the Stochastics oscillator has been posting a lower high. This bearish pergence could indicate a potential correction to the downside. Support at 0.6917 remains in focus while to the upside, the continued momentum could keep the NZD/USD testing the next resistance level at 0.7062.