Tag : JPY

USD/JPY Classic

Posted by Mulder Venture at 3:22 am

The measured move objective off of the double top triggered on the break below neckline support at 91.25 has now been reached and although the overall trend appears to be grossly bearish at present, shorter-term technicals are starting to look a little stretched and could potentially be warning of an upside reversal over the coming sessions.

USD/JPY: The measured move objective off of the double top triggered on the break below neckline support at 91.25 has now been reached and although the overall trend appears to be grossly bearish at present, shorter-term technicals are starting to look a little stretched and could potentially be warning of an upside reversal over the coming sessions. At present, we see the risk for a break below 89.00 and into the 88.00’s. However, any setbacks beyond 88.25 are seen limited with the level coinciding with the 61.8% fib retracement off of the November-January move. Setbacks were also very well supported in the 88.00 area back in the Fall of 2009 and as such, we will look to take advantage of a dip into the lower 88’s to establish a fresh long position. STRATEGY: BUY @88.30 FOR AN OPEN OBJECTIVE; STOP 87.30. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON WEDNESDAY. 3X LEVERAGED.

USD/JPY Setting Up for Buy on Dip Below 89.00

Posted by Mulder Venture at 3:51 am

The Yen, Sterling and Australian Dollar have been the standout currencies on the day thus far, with price action in these currencies being driven by some obvious fundamentals.

FUNDYS
The Yen, Sterling and Australian Dollar have been the standout currencies on the day thus far, with price action in these currencies being driven by some obvious fundamentals. For the Yen, the rally has been all geopolitical with the news that North Korea has fired into the no sail zone waters by South Korea attributed to the safe haven Yen buying. In the UK, Sterling has found some fresh bids on some rather upbeat comments out from BOE Sentance. Meanwhile in Australia, the firmer than expected inflation data has once again generated some fresh buying in the antipodean, which is the second best performer on the day. Nevertheless, gains have been capped somewhat after Australian Treasurer Swan downplayed the CPI result and said that inflation was expected to remain low for some time.

Relative Performance Versus USD on Wednesday (As of 10:00GMT) –

1)    YEN               +0.29%
2)    STERLING    +0.27%
3)    AUSSIE         -0.03%
4)    SWISSIE       -0.04%
5)    EURO            -0.10%
6)    CAD               -0.23%
7)    KIWI              -0.25%

Elsewhere, the Euro trades somewhere in the middle of the pack on Wednesday, but has found some sell interest on the back of comments from Dr. Doom Roubini who says that he’s never been more pessimistic over the EMU than he is at present. Also seen weighing on the Euro are comments from EU Juncker who expresses dissatisfaction over the imbalances created by an overvalued Euro and undervalued USD and Yuan. ECB Weber has managed to balance things out a bit after predicting that Eurozone growth in 2010 will be better. Weber does however concede that the crisis is probably not over. Finally, ECB Trichet has offered his support for Obama’s plan to control the banks, but also says that proposals should be coordinated globally. UK CBI distributive trades was not yet released at time of print.

Looking ahead, US mortgage applications are due at 12:00GMT, followed by the more market moving new home sales (374k expected) at 15:00GMT. Things then quiet down for a couple of hours until the highly anticipated afternoon event risk in the form of the FOMC rate decision. While it is widely anticipated that the Fed will leave rates unchanged at 0.25%, the focus will be on any modifications to the accompanying statement that provide hints as to the direction of monetary policy over the medium-term. US equity futures are marginally offered, while oil trades flat and gold is lower.
GRAPHIC REWIND

TECHS
EUR/USD After breaking down through a multi-day consolidation below the 200-Day SMA to signal a material shift in the structure and expose a measured move objective by 1.3800 further down, the pair has been in the process of a fresh bout of consolidation between 1.4030 and 1.4190. We anticipate that the consolidation will soon be broken to the downside, with a break below 1.4030 and close below 1.4000 seen accelerating declines to 1.3800. Only back above 1.4200 delays outlook and gives reason for pause.

USD/JPY (See below)

GBP/USD Gains have stalled out by 1.6455, with the market looking like it is now ready for bear trend resumption after the formation of a bearish daily gravestone doji-like candle in the previous week. Key short-term support comes in by 1.6085 and we will look for a break below this level to reaffirm our bearish outlook and accelerate declines back towards critical medium-term support by 1.5700 over the coming days. For now, any intraday rallies should be well capped ahead of 1.6370.

USD/CHF The market is in the process of carving out a major base since dipping down below parity in November 2009. Look for a higher low by 1.0130, to be confirmed on a break back above 1.0500 over the coming sessions. Above 1.0500 will then open a fresh upside extension back towards next key resistance in the 1.0700 area. Only back under 1.0130 would delay outlook and give reason for pause. Bulls should look for opportunities to buy on dips into the 1.0250-1.0300 area.

FLOWS
Funds and importers on the bid in Usd/Cad; US prime name on the offer. US prime name and some private clients selling Nzd/Usd aggressively. UK clearer selling Gbp/Usd. Leveraged accounts and macro funds building short Eur/Usd positions.

USD/JPY trading range 90-92,50

Posted by Byung Koo at 1:24 am

The Japanese yen weakened for the sixth-day, with the USD/JPY rising to a two-month high of 91.88, and the pair looks poised to test the October high at 92.34 as investors look to unwind their dollar-backed trades going into the following year. The dollar-yen remains higher on the day after moving approximately 50% of its average true range however, the intraday rally looks to be overdone as the 30-minute RSI falls back from a high of 72. As a result, we may see the USD/JPY trend lower going into the Asian trade and cover the gap from the 100-SMA at 90.86, but the broadly based strength in the U.S. dollar is likely to keep the pair above the 100-Day SMA at 90.99. As the reserve currency begins to lose its strong correlation with risk, we may see pair continue to retrace the decline from earlier this year, which could push the exchange rate towards 92,50, the 50% Fib retracement of the yearly high to the yearly low.

Strategy: flat

My prediction is a narrow trading range for USD/JPY the next month. Resistance level of 92,50 and support ‘key’ level of 90. End of January we probably see an outbreak up of down, depends on the current economic situation and the predictions about the possibilities of interest hikes of several Central Banks.

G20 Comments on Currency Prices

Posted by Mulder Venture at 4:13 am

In the aftermath of the G20 meeting it seems that policy makers are still clearly disturbed about the state of exchange rates. In the last few days we have heard choirs of high profile complaints against currency strength. With the EURCHF trading around the 1.5100 level, markets should be focused on the recent SNB comments, which forcefully defend action (not a “beggar-thy-neighbor” strategy) while staying committed to their current interventionist policy.In Canada, BoC Governor Carney reiterated that long term persistent strength of the CAD would be negative for the Canadian economy and prolong soft inflation figures.

While yesterday ECB’s Trichet and Nowotny both said a strong USD is “important” for the global economy. Perhaps the most interesting, while confusing, would be the comments from Japan. Overnight new Minister of Finance Hirohisa Fujii seems to be backtracking from recent comments and now has expressed some displeasure at JPY moves but also declined to commit to intervention, stating the market had twisted his earlier statements. In the last 24hr Fujii has said “We are watching FX moves closely” and “FX intervention is possible under extreme circumstances.”

On the other side, Prime Minister Hatoyama stated that the JPY rise is already hurting small companies, hinting that the new government will probably not permit the Yen to appreciate forever. Sounds like the historical goverment policy of a weak JPY is returning.

These comments have created considerable distortion in the FX markets and traders would be advised to watch out for continued verbal intervention. Wall Street was able to close on a high note and for the most part Asian regional indexes follow (lone exception Shanghai -0.21%). The rally in risk appetite feels light with only a slight rebound in risk correlated trades. Yesterday’s economic calendar was light, while today we have couple of releases, which could move the markets. The UK Q2 GDP turned out to a nonevent, printing at -5.5% y/y vs. -5.4% exp, -0.6% q/q vs -0.6% exp.

And from the Eurzone September’s increase in economic sentiment to its highest level in a year is another good sign that the domestic economy continues to recover. Economic sentiment, jumped to 82.8 from 80.8 , a touch higher than expected . From the US we’re awaiting S&P/Case-Shiller Composite-20 Y/Y Jul house price index and the consumer confidence for September.