USDJPY traded in a narrow range between 89.63 and 91.08 for several days. Now the price action in the trading range is more likely consolidation of uptrend from 84.82.

The S&P futures are finally reacting to strength in the Dollar as the Greenback rallies across the board in reaction to the Reserve Bank of India’s surprise decision to raise its interest rates by 25 basis points. The RBI’s decision sent shockwaves throughout the FX markets, resulting in a broad-based wave of risk-aversion.

The AUD/USD is experiencing a sizable leg down after the Reserve Bank of India surprised markets by hiking interest rates by 25 basis points. The move sent shockwaves throughout the FX markets, exacerbating risk-averse flows after the Dollar was already strengthening in the midst of EU uncertainty. Sarkozy has reiterated Frances support for Greece, pitting the EU’s two largest economies against one another.

Gold is undergoing a large leg dad as it participates in risk-averse flows. The Dollar is appreciating across the board in reaction to political uncertainty in the EU in regards to how to deal with Greece. However, gold was holding up relatively well until news hit that the Reserve Bank of India decided to raise its interest rates by 25 basis points.

The USD/JPY is creeping higher today despite rampant volatility today in the FX markets. Both the EUR/USD and Cable are undergoing hefty selloffs as uncertainty in the EU unravels the risk trade and sends investors toward the Dollar for safety. Additionally, the Reserve Bank of India surprised markets by hiking its interest rates by 25 basis points, exacerbating risk-averse flows.