All Eyes On Bernanke Testimony Today

The FX markets consolidated in Asia ahead of the all-important Bernanke Testimony to Congress today and tomorrow, where the markets are hoping that the Fed Chairman will clarify when tapering will begin on its $85 billion a month bond buying programme. With a change to the usual schedule, a prepared transcript will be released at 1.30pm (London time) with the Chairman to take to the seat at 3pm. The markets will be looking for a reiteration of last Wednesday’s comments that the US policy will be highly accommodative for the foreseeable future although let’s remember that Bernanke today has to give the entire FOMC view, not just his own dovish stance. The FOMC minutes last week revealed that half of its members believed in faster tapering than the chairman himself. It’s not going to be easy for the Chairman today but I believe he will sit on the fence, criticising the markets for over reacting whilst keeping us very much data focused. He is likely to emphasise that tapering doesn’t mean tightening and that inflation is low and unemployment remains elevated, with the tapering timetable flexible if the economy doesn’t deliver on the FOMC’s dual mandate.

The BoE minutes will be released this morning at 9.30am where will find out if incoming Governor Mark Carney voted for further QE and if the forward guidance policy will be initiated in August. The minutes will also indicate whether this is going to be based on unemployment like the Fed or growth focused.

We do have some data releases today in the form of the UK jobs report this morning and housing starts from across the pond, whilst at 3pm (London time) there will be a policy announcement from Canada but all of this will be secondary to the above events.

EUR/USD
Supports 1.3020-1.2990-1.2920 | Resistance 1.3210-1.3300-1.3340

USD/JPY
Supports 98.85-98.25-97.60 | Resistance 99.80-100.50-101.60

GBP/USD
Supports 1.5070-1.5010-1.4960 | Resistance 1.5150-1.5190-1.5225

Disclosure: FX Solutions assumes no responsibility for errors, inaccuracies or omissions in these materials. FX Solutions does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. FX Solutions shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials.

The products offered by FX Solutions are leveraged products which carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.