Yen and Stocks Reversed on Speculation of US Home Loan Plan

Yen pared earlier gains as US stocks staged a strong rebound in the final hour. Markets are circulating rumors that Obama administration is formulating a program to subsidize mortgages payments for troubled home-owners. Lawmakers would also be asked to approve ways to modify mortgages. Treasury Geithner could announce the plan in the coming days. DOW once dived over 200 pts to as low as 7693 during the day but ended up just 6 pts lower at 7932. Investors clearly responded positively to the news on view that the US government is finally address the core of the current financial crisis, housing recession.
The development mixed up the outlook in the most currency pairs, in particular yen crosses, even though near term levels in most pairs still hold. After all here are the key near term levels to focus on:

• EUR/USD remains short term bearish as long as 1.3093 resistance holds.
  
• GBP/USD remains short term bearish as long as 1.4413 resistance holds
• USD/CHF remains short term bullish as long as 1.1501 support holds
• USD/JPY is mixed as rebound from 87.12 might still be in progress. Focus on 89.69 and 92.39.
• AUD/USD remains short term bearish as long as 0.6614 resistance holds
• USD/CAD is still bounded in triangle consolidation and price actions will remain choppy
• EUR/JPY holds above 113.16 support and rebounds, short term outlook is mixed until downside break of 113.16 support.
• GBP/JPY remains short term bearish as long as 131.83 resistance holds

Source : Actionforex.com