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EURUSD <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Euro dollar longer term implieds jumped in comparison to last weeks reading after falling to extreme levels.  The histogram has also reflected the breakout suggestion as short term volatilities have perked on the weeks European Central Bank decision.  With a rate increase of 25 basis points already priced in, further hawkish comments are likely to provide fodder for vol maniacs, pushing the measure further in the near term.  Given the technical picture, the weeks figures are offering a suggestion of a confirmed break to the upside as the currency pairs price action seems to have cleared near term resistance at the 1.2750 figure, lending to an upside bias.

GBPUSD

Breakout suggestions are additionally visible in the sterling vol measures as the longer term gauge has neared the zero line.  Rising slightly above, the suggestion coincides with a lift in the histogram as short term vols spiked higher on the weeks Bank of England decision.  Whatever the decision may be, the market is seemingly likely to take the statement well as the technical picture coincides with the indication.  Clearly above the resistance trendline at 1.8400, a spike in our model is likely to confirm an upside bias at this point in time.

USDJPY

Japanese yen implieds rose on the week from extremely depressed levels as we enter the tailend of the summer months.  With August finally upon us, some volatility can be expected, albeit still minimal on the absence of attention.  Nonetheless, even in the absence of interest, our model is reflective of an incremental breakout in the underlying spot currency as short term implieds have picked up our histogram and taken it further above the zero line.  The longer term trend is also confirmed by the longer term implied gauge, even as the measure is falling short just below the zero.  Seeing that support is holding strong currently, an upside pop in the spot should not be ruled out.

USDCAD

A range bound scenario seems to be purported through the range breakout barometer even as the short term implieds component contributes to a spike in the week.  Nonetheless, with the overall measure clearly to the downside, range bound situations run rampant.  Holding at the 1.1200 support floor currently, the underlying spot is expected to keep pace until event risk offers the appropriate impetus.  Next up, traders will likely want to see how the upcoming report on US non farm payrolls before taking on a directional bias.

USDCHF

In similar fashion to the Euro implieds, longer term indications have risen from extremely overdrawn levels as our histogram has spiked higher on event risk involving the European Central Bank decision.  Subsequently, short term implieds have jumped and may contribute to the current test of support at the 1.2300 figure.  However, comparable to the Euro counterpart, with a clear break of the support at the 1.2400 level, further downside seems imminent as we head into the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />US employment report at the end of the week.  The report, if received well will boost the directional bias further.

AUDUSD

Following the Reserve Bank of Australias decision to hike rates another 25 basis points, volatilities have built up flipping the histogram above the zero line and boosting the longer term measure.  However, at this point, directional bias seems mulled in the slight curtail that is forming in the longer term measure.  As with other major currency pairs, the US employment report is likely to offer directional bias as the market remains slightly pulled back on profit taking ahead of the release.