The majors lost ground against the dollar after the FOMC remained strong today.  Now the torch has been moved to Draghi to come through after last weeks verbal intervention.  The press conference following the rate decision could outline any course of action the ECB could try to implement.  If the Draghi fails on delivering much punch tomorrow not only will his reputation be damaged the pair could fall back towards monthly lows.  Last week squeeze higher was fueled by expectation of future action by Draghi.  Heading into Asian trading the AUDUSD and USDCAD are once again on traders radar.  The AUDUSD bounced of channel resistance and landed on nearby support Wednesday and buyers could emerge at this level.  The USDCAD is in a similar situation.   The pair bounced of trend line support Wednesday and stopped at nearby resistance.  Seller could emerge at this level.  Data will be king in early North American trading tomorrow with the release of the ECB and BOE rate decision so keep on your toe.  As always remember to keep your trades KEANE and play it safe.

EURUSD DRAGHI IS ON THE WAY

The FOMC passed the torch to the ECB and Draghi on Wednesday.  Now it is time to see if the ECB’s actions can match Draghi’s verbal quantitative easing.  All eyes will be on the Press conference following the rate decision around 8:15 ET Thursday.   Viewers will be watching to see if the ECB can deliver on reducing borrowing costs to Spain and Italy and if so how will they do it.  The ultimate scenario would be the ECB vowing to buy debt until yields on Italian and Spanish bonds fall to 4%.  This outcome is unlikely.  Rather signalling the restart SMP’s or some variation of 4 or 5 year LTRO will be the outcome.  Depending on the amount of cash promised to any programs and the duration the effect on the EUR crosses could vary.

The EURUSD fell today following the release of the FOMC minutes.  The pair found traction at the weekly low at 1.220.   If this level is broken the cross could find support at 1.2180.  Resistance still rests at 1.2330.  If the pair likes what is delivered in the ECB press conference we could see a push higher towards the 1.24 reistance level.  If the market is disappointed a move towards the monthly lows 1.2040 could play out.

SUP      1.2220               1.2180

RES       1.2330              1.24

GBPUSD DRAGHI TO THE RESCUE

The GBPUSD broke lower today and answered many trader questions regarding a possible head and shoulder formation in the pair.  The pair could be on its ways to test monthly lows unless the ECB delivers fireworks Thursday an ignites a risk on rally.  Support for the cross begins at the daily low at 1.5525 followed by 1.5460 and 1.54.  A break of 1.54 open up the pair for a retest of the yearly lows at 1.5275.  Resistance is now at past support at the .382 Fib from the May lows at 1.5660.  The BOE rate decision is due in early North American trading.  Economist are expecting the rate to remain unchanged.

Sup    1.5525

Res    1.5660

Keane Insight:  Buyers may emerge in Asian trading at support anticipating ECB action.

AUDUSD FALLS TO SUPPORT

The AUDUSD acted out its role Wednesday that was scripted perfectly in yesterdays report.  Now the question is what is the next act.  In act one the pair bounced of channel resistance and moved down to support at 1.0460.  The cross bounce at this level in Asian trading ahead of the ECB or consolidation could be in the cards.  following the ECB announcement resistance will begin at the top of the channel at 1.0570.  If that level is broken the pair could push towards 1.0630.  If the ECB disappoints a move down towards 1.0320 could play out.

Sup   1.0460            1.0320

Res     1.0570

USDCAD CHANNEL SUPPORT DAYS NO WAY

The USDCAD and AUDUSD still are trading as near mirrors of one another.  The USDCAD bounced of channel support today and tested the first level of resistance at 1.0050.  Channel support is now around .9990.  This pair will follow risk tomorrow following the ECB press conference.

Sup     .9990

Res       1.0050

USDJPY STILL IN A RANGE

Not much to say about this pair at the moment.  Range trading is what it is.  Resistance is up at 78.60 and support is at 78.  The ECB press conference Thursday could push the pair out of the current range.  A break of 78.60 exposes 79.15.  A push below .78 and the next level of support rest near by at 77.60

Sup   78

Res   78.60

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