Daily Video Analysis: It’s All about Japan and Australia Today

Good morning and welcome to CupO’Forex. This is your daily video analysis for Tuesday, October 7.

It is all about Japan and Australia as they are releasing policy decisions today. Both stood pat on interest rates but will Japan up their bond purchases or hint of a new round of liquidity injection to shore up their economy. We will listening more than anticipating a rate rise with Japan. Will the BOJ address the weakness in the economic recovery? As expected the Reserve Bank of Australia feels the price level of the Australian Dollar is too high and they have ongoing concerns about the expanding housing bubble. Rates are fine where they are and will remain unchanged for now.

At 2350 this evening (GMT) the BOJ will release their current account and we are expecting that to narrow.

The Nikkei is at 15,897.30. We have a technical level at 16,000 to watch as we have been stalling near there. A break higher will challenge 16,150. Next I want to look at the AUD/USD Forex pair. The Ozzie is looking for a bottom at current levels and might correct higher. We see near term resistance at 0.8820. Near term support is at 0.8650.
Lastly I want to look at Gold. We bounced off the short term trend line and recovered a bit. We are at a technical resistance level near 1205 now. We seem to be consolidating here and this correction higher looks like it lacks conviction. A daily close above 1220 will change my opinion.

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