Earlier today, the Bank of Japan left monetary policy on hold (the central bank will continue to expand the monetary base at a pace of ¥60 trillion to ¥70 trillion per year), refraining from enlarging its stimulus program. Additionally, official data showed that Japan’s trade deficit narrowed to ¥808.9 billion, compared to a forecast of a deficit of ¥640.0 billion. In reaction to this news, the U.S. dollar hit a 3-1/2 month low against yen and declined below its nearest support level, approaching the February low. What’s next? Breakdown or rebound?

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Earlier today, the minutes of the RBA's May policy meeting showed that the bank plans to hold interest rates at record lows for an extended period of time. Additionally, the Conference Board reported that its index for Australia was flat in March, after a 0.2% rise in February. In reaction to this disappointing news, the Australian dollar dropped to a 2-week low against its U.S. counterpart, declining below two important support levels. Does this mean that investors’ sentiment is deteriorating and we’ll see AUD/USD lower?

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On Friday, the greenback shuffled between gains and losses as investors weighed mixed U.S. economic reports. Although upbeat numbers from the housing sector gave the U.S. currency support, another report softened the U.S. dollar, showing that consumer confidence in the U.S. deteriorated in May. Thanks to these circumstances, investors avoided the greenback today and remained cautious ahead of the Wednesday release of the Federal Reserve's minutes. As a result, the U.S. currency declined to a 3-month low against the yen and approached its next support. Will it withstand bears’ charge?

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Earlier today, the greenback shuffled between gains and losses as investors weighed mixed U.S. economic reports. On one hand, the preliminary Thomson Reuters/University of Michigan consumer sentiment index fell to 81.8 in May from 84.1 in April, missing market expectations for a 84.5 reading, which softened the U.S. currency. On the other hand, better-than-expected numbers from the housing sector gave the greenback support. The Census Bureau reported that U.S. building permits rose 8% to 1.080 million units last month (while analysts had expected an increase to 1.010 million units in April) and housing starts rose to 1.072 million units in April, beating expectations of 980,000 gain. As a result, major currency pairs were little changed. Is it calm before the storm?

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Earlier today, the combination of positive economic indicators in the U.S. pushed the euro to a 11-week low against the greenback. Thanks to this news, EUR/USD slipped to important support levels. Will they withstand the selling pressure and trigger a corrective upswing in the following days? Or maybe today’s show of weakness means that the worst for the common currency is not behind us?

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