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Forexlive Americas FX news wrap: Yellen "rope a dopes" her way through her speech

Forex News for US Trading on June 6, 2016.

FOMC Chair Janet Yellen was the main event today and to me at least, she took a page from the late, great Muhammad Ali, and roped a dope through her speech. Now I know there was a little for everyone, but as pointed out she did use the word "but" 18 times (usually that is to used to present one side and then the other). She also use the word optimistic which signals that wants to remain hopeful (but with some degree of "hope"). The stock market liked it. Why?...I am not so sure. Nevertheless it closed at - or near high levels for 2016.

The EURUSD was mired in a narrow trading range for most of the trading day. On the initial headlines, the price fell to new lows for the day at 1.13244. The pair rallied up to 1.1392 on a combination of shorts covering and realization that the chair had no mention of June, July or any date in her caveats. That momentum died down and the pair closed near unchanged on the trading day.

The GBPUSD today was down on the day but well off the lows. The Asian Pacific session saw the pair tumble lower on the back of Brexit polls. The fall took the price to within 8 pips of the 100 day MA. However, in and up and down and up London session, the pair recovered some of the losses. The pair is still down 0.43% on the day. So the bears are trying to exert more of an infliuence. The Brexit vote and polls associated with it, will continue to dominate the flows.

The USDJPY pushed up and made new session highs post Yellen. Higher stocks and a glass half full view on Yellen (perhaps) helped contribute to the gains. The pair tested a resistance level at the 107.65 level (swing lows and highs going back to early to mid April . Stay below in the new day and shorts may re-start a downward wave. Move above and look for further upside potential.

The USDCAD continued the bearish track today. One can say a neckline in a head and shoulder was broken. In addition, the 200 bar MA on the 4-hour chart was breached at 1.2880. By the end of the day, the midpoint of the move up from the May low was also taken out at 1.28235 (rebounding back toward it now). Oil was higher on the day and sniffed the $50/bbl level. Overall, though, a bearish technical day.

The AUDUSD whipped around on the Yellen headlines and but ended the day near the highs but unchanged from Friday's levels. The 100 day MA is at 0.73676 in the new day. The RBA decision will be released at 12:30 PM ET/ 0430 GMT with no change expected. When the 100 day MA is where the price is just before a key event, you expect the event result to dictate the next move. Traders will be looking those clues in the headlines.

Good fortune with your trading.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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