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USD/JPY jumped above 100 yen USD/JPY jumped above 100.00 from a 1-week minimum at 99.14 hit earlier today. The greenback was encouraged by higher US yields (2-year Treasury yields are up by 2.65%; 10-year yields are up by 1.44%). Resistance: 100.60, 100.85. Support: 99.14, 99.00, 98.75. Chart. H1 USD/JPY

Key currency options Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3000, $1.3050, $1.3100, $1.3150, $1.3160, $1.3235; GBP/USD: $1.5200, $1.5300; USD/JPY: 99.00, 99.25, 99.50, 99.75, 100.00, 100.25, 100.50, 101.00; USD/CHF: 0.9385; AUD/USD: $0.9165, $0.9170, $0.9250, $0.9265, $0.9400; USD/CAD: 1.0320 1.0400; EUR/CHF: 1.2350; AUD/JPY: 92.60.

July 23: Asian session UD dollar weakened yesterday as data showed residential sales unexpectedly fell. Today America will release home prices and Richmond manufacturing index at 13:00 and 14:00 GMT respectively. EUR/USD tested levels above $1.3200 both yesterday and today. However, on Monday euro didn’t manage to close above this handle and finished the day at $1.3184 after reaching $1.3218. Today the single currency visited $1.3207, but then retreated to $1.3290. Demand for EUR is supported ahead of data tomorrow forecast to show services and factory output in the region contracted at the slowest pace in more than a year. GBP/USD is little changed in the $1.5360 area after adding almost 100 pips yesterday. Watch BBA mortgage approvals at 08:30 GMT. USD/JPY returned to 99.50 after a dip to 99.15. According to the BoJ governor Kuroda, the yen is weak because of differing Fed and BoJ policies, and that the Japanese regulator would continue its easing stance. USD/CHF is consolidating around 0.9360. AUD/USD rose to $0.9290 in the Asian trade, but then corrected lower to $0.9260. NZD/USD tested the levels above $0.8000. According to the New Zealand prime minister Key, the country is on track to budget surplus in 2014/15 and the government is planning to cut net debt to 20% of GDP by 2020. USD/CAD found support at 1.0321 after sliding from 1.0360 yesterday. Canada will release retail sales at 12:30 GMT.

EUR/USD: Elliot wave analysis Monthly. The pair may have finished forming the wave B of the rising Zigzag А-В-С. Wave B is in the form of the Triple Three [w]-[x]-[y]-[x]-[z]. EUR/USD currently keeps forming wave C. Let’s analyze the wave’s structure in detail. Chart. Monthly EUR/USD Daily. The pair keeps forming corrective wave II in line with our forecast. Chart. Daily EUR/USD H4. The wave II is probably taking a form of an upward Zigzag. Euro’s currently forming the wave of this Zigzag. In the next few days we’ll likely see the continuation of this wave and the upside move will resume in the wave [C]. Chart. H4 EUR/USD Roman Petuchov for FBS

AUD/USD: Elliot wave analysis Weekly. The pair keeps forming the wave III of the downside impulse. This wave looks powerful, stretched and rapid – just as it has to be. Chart. Weekly AUD/USD Daily. The marking on the daily chart shows that the pair keeps forming the wave [3] of III. Chart. Daily AUD/USD H8. In line with our forecast Aussie has formed the wave (4) of [3] of III. When this wave is complete, the decline in the wave (5) will resume. The decline will probably last during the whole week. Chart. H8 AUD/USD Roman Petuchov for FBS

USD/JPY: Elliot wave analysis Daily. Wave 1 of the rising wedge is close to an end. Chart. Daily USD/JPY H4. We are probably witnessing the wave IV of the final rising impulse wave (V). Chart. H4 USD/JPY H1. The detailed marking on H1 shows the pair’s at a complicated area of the marking. We have adopted an assumption that the wave IV is taking the form of the double Zigzag. If this assumption turns out to be correct, in the near term we’ll see a decline in the wave [Y] of IV as it’s shown on the picture. Chart. H1 USD/JPY Roman Petuchov for FBS

GBP/USD: Elliot wave analysis Weekly. On the weekly chart there’s a global Zigzag A-B-C. The pair keeps forming the wave С which aims at the level 1.1 where the pair was last seen in 1985. Chart. Weekly GBP/USD H12. The wave (II) is still forming. Let’s examine its structure in detail. Chart. H12 GBP/USD H4. The upside impulse a may now be over. So, in the near term we expect corrective wave b to form, which may take a form of the long horizontal correction. The pair will likely spend the whole week forming this wave. After that we may see upside movement in the wave C. Chart. H4 GBP/USD Roman Petuchov for FBS

European news in brief SNB resident Thomas Jordan: the central bank has no intention to change or scrap a franc ceiling of 1.20 versus euro. Bundesbank: German economy grew strongly in Q2. More moderate growth expected in Q3. Portugal: President Anibal Cavaco Silva earlier ruled out elections and gave support to Prime Minister Coehlo saying that “the government has the support of an unequivocal majority in parliament.”

G20 meeting outcome According to the closing communique from the G20 meeting, finance ministers and central bank governors of the world's 20 biggest economies agreed to focus on boosting employment and economic growth and continue the policy of monetary support where needed. In order to ensure this growth, the officials agreed to develop an action plan to be presented at the summit of the G20 leaders in September. The plan will include "a comprehensive series of structural reforms that will increase productivity, labor force participation and employment". Among such reforms is a major tax move proposed by the Organization for Economic Cooperation and Development and aimed at increasing the transparency of taxation systems globally.

Key currency options Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.2930, $1.3000, $1.3050, $1.3110, $1.3300; GBP/USD: $1.5100, $1.5230, $1.5235; USD/JPY: 98.50,99.00, 99.80, 100.00, 101.00, 101.20, 101.25, 102.00, 102.35; AUD/USD: $0.9150, $0.9200, $0.9210; USD/CAD: 1.0500; EUR/GBP: 0.8525, 0.8800; EUR/CHF: 1.2380; EUR/AUD: 1.4165.

July 22: Asian session US dollar has weakened versus the most of its counterparts. EUR/USD rose from $1.3135 today, but was capped by the $1.3170 area. GBP/USD edged up almost reaching $1.5200. There are no releases scheduled in the euro area and Britain on Monday. The market players are waiting for the UK BBA Mortgage approvals data at 08:30 GMT tomorrow. The US will publish existing home sales at 14:00 GMT. USD/JPY was a big mover in the Asian trade: the pair opened at 100.40, rose to 100.60 and then plummeted to 99.60. As of writing, the pair recovered to 100.00. Yen initially strengthened as Japan’s ruling party failed to win an independent majority in upper-house elections. USD/CHF dipped to 0.9385 before recovering to 0.9400. AUD/USD opened the week with a gap down at $0.9180 and strengthened to $0.9230. According to the Australian press, the Treasury is expected to revise down Australia’s forecast growth rate, and to make upward revision to the budget deficit. NZD/USD rose to $0.7940. USD/CAD slid to 1.0350.

GBP/USD broke above 1.5200 Cable is trading around $1.5230. Pound’s rally on hawkish UK meeting minutes and a big drop in unemployment claims was capped at $1.5250. Morgan Stanley strategists remain bearish and recommend selling the pair on the current rallies above $1.5200, targeting $1.4975 and than $1.4815. We remain cautious and will get ready to short the cable only on a break below $1.5075. A rise above $1.5280 (50% Fibo, July highs) could open the way for a further growth. Chart. H4 GBP/USD

HSBC: sell EUR/USD HSBC strategists recommend selling EUR/USD from $1.3045 and with a target of $1.2880. In their view, the forthcoming Bernanke testimony in Congress (Wednesday and Thursday) will confirm the Fed’s QE tapering plans. Chart. H4 EUR/USD

Bank of England: CHANGE in votes! The Bank of England released the minutes of its July meeting. The members of the Monetary Policy Committee (MPC) voted on 2 things: Official bank rate – here the distribution of votes is unchanged: all MPC members want to keep the rate at the record low of 0.5%. Asset purchase facility – here comes the change: earlier 3 members wanted to increase the amount of bond purchases, now all want to keep APF unchanged. The news is bullish for British pound. GBP/USD jumped to $1.5246 before easing to $1.5200.

First comments from Bernanke Here are the points the Fed’s Chairman Ben Bernanke outlined ahead of its testimony to the Congress: - The Fed may taper bond purchases in 2013 and stop QE around the middle of 2014. - As asset purchases depend on economic and financial developments, they are ‘by no means’ on a preset course. - Bond buying could be reduced at a faster pace, slower pace, or even increased for a time depending on the outlook. - According to the FOMC, risks to the economy reduced since last autumn, labor market conditions are gradually improving. - Sees highly accommodative policy in foreseeable future There isn’t much of news so far, so no reasons to buy USD.

Key currency options Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3000, $1.3055, $1.3070, $1.3100, $1.3175, $1.3200; GBP/USD: $1.5000, $1.5100, $1.5150; USD/JPY: 97.00,97.75, 98.50, 99.00, 99.25, 99.50, 100.00, 100.25, 101.50; USD/CHF: 0.9500; AUD/USD: $0.9050, $0.9200; USD/CAD: 1.0400, 1.0490; EUR/JPY: 131.00.

July 17: Asian session US dollar rose against a majority of its peers with the Fed’s Chairman Ben Bernanke due to testify to Congress today at 14:00 GMT. Bernanke’s prepared remarks for his congressional appearance will be released at 12:30 GMT. In addition, the central bank will release Beige book (18:00 GMT), a report on the current economic conditions. Also watch American housing data due today at 12:30 GMT. EUR/USD is correcting a bit down after it rose to $1.3174 yesterday. In Europe Germany will sell 10-year debt today. GBP/USD opened around $1.5160, but then moved closer to $1.5100. UK will release unemployment data today at 08:30 GMT and the results of the MPC’s vote on the benchmark rate and asset purchase facility. USD/JPY strengthened to 99.55. The Bank of Japan’s June meeting minutes showed the members see the Japan’s economy to return to moderate recovery path. USD/CHF recovered from the yesterday’s low of 0.9380 to 0.9415. USD/CAD rose from 1.0363 to 1.0390. The Bank of Canada is meeting today and is expected to keep the benchmark interest rate unchanged at 1%. The BOC will conduct press conference at 15:15 GMT. AUD/USD slipped from the yesterday’s high of $0.9260 to $0.9230. NZD/USD declined to $0.7875. The currencies are drifting a bit lower on ahead of the today’s Bernanke testimony. Data showed China FDI for June rose by 20.1% y/y (vs. +0.7% expected and +0.3% in May).

GBP/USD holds above 1.5100 On Tuesday GBP/USD is consolidating in the $1.5145/5045 range. The cable is sitting at $1.5100 following the release of a lower-than-expected UK CPI (2.9% y/y vs. forecast 3.0% and previous 2.7%). Support for the cable is seen at $1.5030/5000 (Friday’s low, 23.6% Fibo from the recent decline). Slide below will mean a return to the bearish channel. Next support will be seen at $1.4815. However, the $1.5000 level looks quite resilient for now. Last week the pair formed a strong bullish candle, supported by the dovish Ben Bernanke comments. Watch the next Bernanke’s speech on Wednesday for new market-moving signals. Resistance is seen at $1.5150, $1.5200 and $1.5220. GBP: factors to watch (July 15-19) Chart. Daily GBP/USD

EUR/USD: range-bound trade On Tuesday EUR/USD attempted to rally, but was capped by the $1.3100 resistance (50% Fibo from the June decline). The pair spiked down to $1.3050 on a weaker-than-expected German Zew economic sentiment index (36.3 vs. forecasted 39.8). Meanwhile, euro zone economic sentiment improved to 32.8 (forecast: 31.8). As can be seen from the 4-hour chart, the $1.3100 level is acting as a strong resistance. Meanwhile, the downside is limited by the $1.3000 handle: both on Friday and Monday bears tried to push the pair lower, but closed the day above $1.3050. A daily close above $1.3100 would be a bullish sign and would open the way to the $1.3200 area. However, a close below $1.3000 would open the way for a further decline. The week is expected to be quite interesting for EUR/USD traders. The main risk event of the week will be the Fed’s Ben Bernanke testimony on Wednesday. Market wants to get a clearer answer on the QE tapering question: the recent US comments were quite contradictive. Confirmation of a “dovish stance” could push EUR/USD higher. Chart. H4 EUR/USD

AUD/USD: daily update AUD/USD rose above $0.9200 today. Aussie strengthened as the Reserve Bank of Australia said in the minutes that the inflation outlook is affected by lower AUD. The bears might have gotten very nervous and some short positions got squeezed. We’ve noted long ago that there’s a daily MACD divergence on the daily chart – a bullish signal. We still recommend selling AUD on rallies. Resistance lies at $0.9250, $0.9305, $0.9325 and $0.9400. Support is at $0.9070, $0.9145, $0.9037 and $0.9000. Chart. Daily AUD/USD

USD/JPY: daily update USD/JPY failed to close above 100.00 yesterday, though it almost tested 100.50. The pair’s trading on the downside, in the 99.60/50 area. Resistance lies at 100.00, 100.50, 100.80 and 101.40/50 (74.6% Fibo). Support is at 99.40 (55-day MA), 99.05, 98.70, 98.15 (bottom of the daily Ichimoku Cloud). We’ll probably see further choppy trading in the 98.15/101.50 range. Commerzbank suspects that the overall risk is on the downside. Ben Bernanke’s semi-annual testimony to US Congress tomorrow will be the main risk event this week. Also watch the Bank of Japan’s monetary policy meeting minutes released on Wednesday. Chart. H4 USD/JPY

GBP: factors to watch (July 15-19)

EUR: factors to watch (July 15-19)

Key currency options Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (14:00 GMT). Here are the key options expiring today: EUR/USD: $1.3000, $1.3050, $1.3055, $1.3070, $1.3100; GBP/USD: $1.5000, $1.5120, $1.5225; USD/JPY: 99.50, 99.60, 100.00, 103.00; USD/CHF: 0.9500 AUD/USD: $0.9000, $0.9060, $0.9200; EUR/CHF: 1.2315.

July 16: Asian session Investors pared bets on gains in the greenback before the Fed’s Chairman Ben Bernanke testifies to Congress this week. EUR/USD edged a bit higher to $1.3070. Yesterday the single currency tested levels below $1.3000, but managed to close around $1.3060. Euro’s supported before German data forecast to show investor sentiment in Europe’s biggest economy improved. GBP/USD is just above $1.5100 after it tested $1.5027 yesterday. UK will release inflation data today at 08:30 GMT – CPI growth is expected to accelerate from 2.7% to 3.0%. US CPI will come out at 12:30 GMT. USD/JPY is consolidating around 99.75, edging lower from the yesterday’s high of 100.50. Japan finance minister Aso repeated today that the weaker yen supports the exporters. USD/CHF keeps consolidating around 0.9475. AUD/USD is a big mover in the Asian session, strengthening by 100 pips to $0.9190. The Reserve Bank of Australia’s meeting minutes, released today, showed the RBA sees the current policy appropriate with a scope for further easing. NZD/USD rose to $0.7840. New Zealand Q2 CPI rose by 0.2% q/q (vs. +0.3% expected) and by 0.7% y/y (vs. +0.8% expected). CPI remains below the RBNZ’s 1-3% target range. USD/CAD is little changed today, in the $1.0430 area after adding 40 pips yesterday. Today’s article in China Securities Journal says that China can tolerate slower economic growth in order to get structural adjustment. It is also stated that the current levels of growth are ‘significantly’ above the growth floor. Meanwhile, Asian Development Bank has cut China 2013 forecast by 0.5% to 7.7% and 2014 forecast to 7.5%.