Australia’s Preliminary BOP Imports dipped by A$1.5bn to A$15.4bn over September. On the assumption that exports managed to remain strong in spite of the strength of the Aussie Dollar it does imply that the trade balance should provide good reading when released on November 1st. So seemingly good news with the economy still rattling along in fine fettle and will provide the RBA with one more reason to hike rates again. Politicians and the Bank of Japan may be confident that consumer demand will pick up but consumers themselves aren’t listening. September saw national department store sales return into negative territory by dropping -2.5% YoY which followed a larger drop in July of -4.3%. The August figure only managed to clamber above zero (at +1.4%) due to the unusually hot summer. In Tokyo department store sales dipped by -2.1% YoY. While a bad number there shouldn’t be any significant impact on the Yen which is in the midst of a long term decline against the U.S. Dollar and this trend is expected to continue for some while still.
The following economic releases are due today:
August
Euro-zone Trade Balance EUR 0.0 bn
Euro-zone Trade Balance s.a. EUR 0.2 bn
Euro-zone Construction Output (MoM) September
Swiss Trade Balance CHF 1.80bn
U.K. Retail Sales (MoM) +0.1%
U.K. Retail Sales (YoY) +5.5%
U.K. PSNCR GBP 12.5bn
U.K. PSNB GBP 6.1bn
U.K. M4 Money Supply (MoM) +0.9%
U.K. M4 Money Supply (YoY) 12.5%
U.K. M4 Sterling Lending GBP 18.0bn
U.S. Leading Indicators +0.3%
U.S. Philadelphia Fed Index 7.0 October
Swiss ZEW Survey: Expectations
U.S. Initial Jobless Claims (13th) 312K
U.S. Continuing Claims (6th)
Yesterday didn’t really produce any surprises and chances are that surprises will be hard to come by this side of the weekend. Range trading does still seem to be the favored scenario and it will probably be safer to trade on this basis. There do seem to be quite a few erratic minor ranges that break but within the larger range and this does tend to reflect a corrective pattern of consolidation.
However, let’s look at the alternative in case that elusive surprise does come along. Well, as I have maintained the Dollar’s downside is still definitely the MT direction and I still see the greater risk for a surprise to be a Dollar break out lower. Even then it may not actually make it to new lows – or maybe only minor ones – but take more care on this side of the equation. Dollar-Yen has bounced nicely from the 115.95-116.30 support and ideally I’d like that to continue with some gains preferred today. Just a small note of warning is a possible alternative which, on break of 115.95 may well allow a slightly deeper move back to 115.25-50. However, again as I have maintained, the larger picture is higher and the next move should make its way to 120.25 over time. The only possible drag to the timing is the first daily cycle low since the August weekly lows which should occur some time next week – probably towards the end. However, don’t fight a break higher
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 117.51-93 1.4369-94 1.1860-96 2.0473-93
Res: 117.02-20 1.4242-81 1.1810-30 2.0421-34 Spt: 115.96-16 1.4163-80 1.1743-62 2.0340-70
Spt: 115.25-48 1.4127-43 1.1668-07 2.0270-06 | 
