• USD/JPY +0.4%
• AUD/NZD +0.9%
• GBP/JPY +0.6%

USD/JPY

Fed Minutes Apply Pressure To Pair: Traders bid the USDJPY currency pair higher on the open following yesterdayââ,¬â"¢s observance of the Presidentââ,¬â"¢s Day holiday.  With the carry trade still alive in the pair, investors continued to the keep the dollar bid.  However, later on, position paring forced the underlying to retrace slightly as minutes of the most recent Federal Reserve meeting suggested a near term end to the current tightening bias.  During the session, traders took to comments by officials that stated that the last rate hike looked to be efficiently applied and that further rate hikes would have to come upon consideration of fundamental pieces of data.  Subsequently, even though the rate of return remains high between the two economies, concerns over dollar weakness may mount as focus looks to turn to the U.S. infrastructure and weakness through a growing deficit.  In the meantime, the current momentum looks to be temporary as tomorrowââ,¬â"¢s focus on consumer prices will take center stage.

Rumorville: Bids look to keep the underlying propped higher at 118.80 with heavier considerations below at 118.20/25.  Comparatively, with offers and plenty of selling pressure higher at 119.10, the pair looks to meet considerable resistance.  Further stops reside at the even 119.00 figure.

AUD/NZD

Inflationary Suggestion Expected: No economic news was released to spark a move in the cross currency pair as traders continued to pound a weaker New Zealand dollar.  With fundamentals still relatively weak compared to an optimistic Aussie economy, capital looks to be shifting to the other side of the AUDNZD cross.  Additionally, bolstering the move looks to be a technical break of the recent consolidation as the price action penetrated the top resistance, lending momentum to Aussie bulls throughout the session.  Further strength may be in the near future for the Aussie leg as traders look ahead to tonight wage price index report.  Should the report ring higher, the figures may lend to speculation sparked last week as Reserve Bank of Australian Governor Ian McFarlane hinted at further rate hikes as inflation continues to loom.  Although afforded some slack, the labor market continues to remain firm in the economy pushing the costs of employment higher.

Rumorville: Plenty of bidding attention look to keep the underlying major leg higher heading into the asian session.  Bids at 0.7370 and below at 7340/50 are keeping the AUDUSD propped.  With stops lined at 0.7460, selling pressure looks to come in around the 0.7400 figure.

GBP/JPY

Pound Reports En Vogue: Following USDJPY currency pair action, traders followed up by additionally paring positions in the British counterpart.  Looking ahead, traders are expecting the release of the Bank of England meeting minutes along with the new monthly CBI distributive trades survey.  Coupled with the suggestions of housing stabilization, both reports are expected to reflect the growing notion that the United Kingdom economy is making a return to form.  However, what will be noted are the inflationary suggestions that remain somewhat questionable in the region.  Although still near the top estimates of the central bankââ,¬â"¢s target range, inflationary figures have come down quite a bit.  This visible evidence lends to confirm earlier forecasts that energy prices underpinned most of the inflationary pressures over the past year.  Should policy makers offer even an inkling of dovishness, this will place considerable resistance for the bull.

Rumorville: Pound bidding interest looks to resurface with the currency test of the session low of 1.7407.  Thin selling resides at the US session high of 1.7470.

Richard Lee is a Currency Strategist at FXCM.