The Japanese yen strengthened against the greenback during the last hour of trade following the slump in risk appetite, with the USD/JPY falling back from 91.40 to hold along the 10-Day moving average at 91.15. The pair is down 20pips from the open after moving nearly 130% of its daily ATR during the overnight session, and the pair may continue to retrace the advance from the European session as global equities pull back. Nevertheless, the dollar-yen made several attempts this week to push back above the 20-Day SMA at 91.92 however, the lack of momentum to retrace the decline from earlier this month may lead the pair to test the September low (90.11) over the remainder of the week.
The British pound tumbled lower as BoE Governor Mervyn King held a dour outlook for the UK banking sector, with the GBP/USD slipping to a fresh monthly low of 1.6066. The pound-dollar has moved 180% of its average true range and has fallen 1.65% to mark the biggest decline since June 3rd however, the pair looks to be finding intraday support ahead of 1.6050 as the pair remains heavily oversold. As a result, we may see the pair bounce back from the intraday low to taper the decline however, the pair is likely to remain weighed throughout the US trade following the rise in risk aversion.
Visit the DailyFX Forex Stream for Real-Time News and Market Updates
To discuss this report contact David Song, Currency Analyst: dsong@fxcm.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
