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Pound sterling was weaker on the day following a central bank decision that left <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />UK interest rates at the current 4.75 percent.  Although minutes of the meeting wont be released till the 18^th, sentiment is growing that central bankers may not be as hawkish as inflationary pressures have begun to recede slightly.  The notion could not be made more known than through the stabilization in wage increases in the economy as the Euro zone is experiencing slightly less inflationary pressures.  Additionally bolstering the bearish sell off was a better than expected initial jobless claims report in the US.  Dropping by 17,000 claims on the week, the report can be considered somewhat positive heading into tomorrows US employment report as the headline figure declined through the 4-week moving average of 320K.  The reports have subsequently remained stable, lending a bullish bias to tomorrows 120K expected.  Should the report be positive, traders would likely see a short term lift in the greenback as it reaffirms a softer landing in the economy with continued prospects for growth.

Consolidating into the Asian session, the currency pair seems to have found support as bids have emerged at the 1.8750.  Boosting notions for further upside looks to be a bullish convergence in the MACD and a golden cross forming in the Stochastic for the 60-minute shot.  Coincidentally, the market price is finding additional support from the 1.8766 (50 percent fib from the 9/29-10/3 bull move).  However, with immediate resistance coming in a the 1.8797, a range bound scenario is likely to persist until the US employment report lends a directional bias.

GBPJPY

Forcing out longs on the day, the GBPJPY cross pair declined precipitously through key technical levels before finding support at the 220.50 figure.  Corresponding with the September 26^th low, the current support level should hold into the Asian session as bids are emerging for a pull back in the interim.  Aside from a neutral central bank announcement, it seems as though traders are looking to the overnights coincident index in spurring some profit taking from last weeks move.  Although declining in the previous report, the August report is expected to rebound in light of positive reports as of late.  However, momentum may wane towards tomorrows close as the overnight is additionally releasing manufacturing and industrial production figures for the UK which will be suggestively bullish.  Both figures are estimated to have increased on the annualized figure, prompting further speculation in favor of sterling bullishness.

In similar fashion to the pound major, the GBPJPY cross pair is likely for a pullback in the overnight following the massive New York decline.  Confirming the notion is the golden cross that is forming in both MACD and Stochastic as bids are visibly noted on the 60-minute chart at the 220.50.  As a result, breaking through the 221.00 for only a brief moment, the GBPJPY looks ripe for further upside moves as carry trade bids are likely to bring the pair through to the 221.50 level where sellers await to cap any gains.  However, should bears prove too much, a break below the current support would see an imminent test of the 220.00 handle.

CHFJPY

The CHFJPY currency cross was also subject to some downside losses on the session, following in line with bearish pressure on the Euro major.  Attributed to the declines were comments by European Central Bank President Jean Claude Trichet.  Subsequent to the interest rate announcement earlier in the day, Trichet confirmed market sentiment that interest rates are indeed likely to rise by another 25 basis points in the month of December.  However, what traders keyed in on was the fact that he added that rate cuts would not be ruled out next year as the central bank head omitted the use of the term progressive, which many had come to expect.  The sentiment is likely to stick following less then exemplary readings from leading indicators such as the recent German ZEW survey and thinner consumer price inflation data.  As a result, with the Swiss economy being widely associated with the Euro zone, expectations are now surfacing of a similar scenario in the underlying major and lends to weakness in the franc leg.

Falling rapidly throughout the New York session, the currency pair has found support just above the 93.60 level.  Like the subsequent two top market movers, the CHFJPY cross is likely subject to some profit taking, boosting the near term price action higher.  Confirmation can be obtained through golden cross formations in both Stochastic and MACD oscillators. Notably, however, the current market action is consolidating just below the 93.96 resistance level (23.6 percent fib from the 10/3-10/4 bear move).  A failure here would see a retest of the 93.60 support floor as offers are likely to come in heavy at such resistance.  A break to the upside, conversely, would have bulls eyeing the 94.28 (50 percent fib level) figure.