AUD and NZD were hit the hardest as the USD strengthened across the board

In a surprise move today the People's Republic of China, raised its USD/CNY rate by almost 2% while also indicating that greater volatility ahead could be expected. This was the biggest one day drop in its currency ever since China adopted market exchange rates in 1994.

Most major currencies and especially AUD and NZD were hit the hardest as the USD strengthened across the board. This is yet another measure to spur the economic slump that hit the country over the past few months. AUDUSD dropped because Chinese companies purchasing products from Australia or New Zealand have now less purchasing power with a weaker Chinese Currency.

NZDUSD also dropped 100 points to 0.6540 while USDJPY also jumped to 124.89. This move is widely expected to support USD versus Asian currencies.

EUR/CHF is continuing with its up-trend, trading at its highest level since the CHF de-pegged from the EUR in January in a move that can be explained by a reversal of safe-haven flows as Grexit risks have been reduced.

The economic calendar, offers little data yet again today, with the biggest news being the ZEW Economic Sentiment Index to be released at 09:00 GMT.

Trading quote of the day:

“If you must play, decide upon three things at the start: the rules of the game, the stakes, and the quitting time”

Green lines are resistance, Red lines are support

EURUSD
Pivot: 1.101
Likely Scenario: Short positions below 1.101 with targets @ 1.0955 & 1.092 in extension.
Alternative scenario: Above 1.101 look for further upside with 1.1045 & 1.108 as targets.
Comment: The RSI is bearish and calls for further downside.

GBPUSD
Pivot: 1.551
Likely Scenario: Long positions above 1.551 with targets @ 1.5605 & 1.5635 in extension.
Alternative scenario: Below 1.551 look for further downside with 1.5455 & 1.542 as targets.
Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.