We seen a sell off in equities today, over earnings fears following Alcoas’ miss last night and Chinas’ decision to raise its bank reserve requirement by 0.5% to 16.0% furthering tightening its’ monetary policy. Smart proactive moves by China to head off inflation concerns that loom around the corner. The Fed should really be following their example but common sense still seems a long way off for the U.S.
The Yen adopted its’ usual bid tone as risk aversion took hold throughout the day. I am still favouring picking up longs on the yen crosses with proper money management and await a return to the upside, I am currently long gbpyen @ 147,10 and 147,80 .. i will close the 147,80 if I get a chance for a few pips and hold the 147,10 for a return to the top of the range. I will keep looking for swing longs if we do keep the risk averse tone tomorrow. I can only see this dip as a buying opportunity for now.
The dollar did not benefit much from the risk aversion like it has been doing in recent months, however, its still holding that support @ 76.25 on the usdx and resistance of 1,4550 on EURUSD. This resistance may well go tomorrow should stocks steady themselves and try and make some kind of climb back up.
Crude inventories and Beige Book tomorrow.
