This text is from blog famous currency strategist Joel Kruger .
ON THE ROAD – I am on the road, so will keep today’s outlook short and sweet. Overall, another quiet day of trade, but still with some noteworthy developments. The ability for the Euro to hold above the daily Ichimoku cloud after breaking back above the indicator for the first time in several months, suggests that we still could see additional gains in this market beyond 1.2600 barriers and towards 1.2700 further up.
NO SURPRISE HERE – Moving on, we continue to see underperformance in the commodity bloc currencies, with Aussie weakness standing out on Thursday following a very discouraging Aussie building approvals earlier in the day. This is yet another series of disappointing economic data out of Australia this week, and the deterioration in the data once again reaffirms my core bearish outlook for the economy, which is expected to slow more dramatically. Additionally, more problems on the iron-ore scene out of China have not been helping matters and weigh further on the correlated Australian Dollar and other commodity and emerging market FX.
YEN PRICE ACTION STILL FRUSTRATES – Finally, USD/JPY continues to frustrate with some very tight directionless trade in the mid-78.00′s. I retain a very bullish medium and longer-term outlook, but we will need to see a break and daily close back above 78.85 at a minimum, to encourage shorter-term bullish prospects. Looking ahead, market participants are focused on Friday’s Bernanke speech, which could very well influence the direction in the Yen, as this market is always highly sensitive to Fed monetary policy moves.