Chart Analysis: USD/JPY

The JPY remains the highest beta currency as the JPY crosses are reversing higher just as quickly as the sold off in recent days as the US GDP triggered a move higher in bond yields. Note that the USD/JPY found support right on the 21-day moving average, which has been an important Moving Average on several occasions over the recent cycle. For resistance, we'll watch the 91.54 retracement level and the 92.00-area daily Ichimoku cloud resistance. The JPY will need new local lows in bond yields to work back below 90.00 in the USD/JPY.

Dollar Gains again on Weak Numbers

USD

As with the disappointing consumer confidence numbers earlier in the week, the US housing market experienced a setback on Wednesday, as data showing an unexpected decline in US home sales was released.

The poor numbers came after an on-target durable goods report and helped the Dollar maintain its safe-haven flow intake. Forex analyst consensus for the housing numbers was an increase from September of 23,000 to 440,000; however the actual data showed a drop of 15,000 to 402,000.

At 10:15PM GMT, the US Dollar was trading up .63% to the Euro to 1.4709, up .02% to the British Pound to 1.6388, up 1.35% to the Canadian Dollar to 1.0791, down 1.11% to the Japanese Yen to 90.76, and up .47% versus the Swiss Franc to 1.0264.

AUD

The Australian Dollar suffered its worst trading day in close to four months, falling broadly and sharply to many currencies.

After a rally that has lasted several months, spurred on by positive growth and an apparent emergence from recession, the Aussie retreated after a data release showed that Australian consumer price inflation rose more than expected in the last quarter.

The Reserve Bank of Australia is meeting next week on interest rate policy, however the data does not seem likely to spur them to tighten already low interest rates.

At 10:20PM GMT, the Australian Dollar was trading down 2.25% to the US Dollar to .8967, down 1.55% to the Euro to 1.6397, down 3.25% to the Japanese Yen to 81.41 and up .17% to the New Zealand Dollar to 1.2335.

Chart Analysis: USD/NOK

It would seem that if we are moving into a bit larger correction mode here, then the likes of NOK might be a higher beta currency and see an especially sharp correction vs. the greenback due to the popularity of carry trades pairing the USD with commodity currencies.

A squeeze in the short term could introduce surprising volatility to the upside in the short term. The JPY/NOK might even be a bigger mover if bonds find encouragement after today's US auction results.