News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • The growth-linked New Zealand Dollar may rise on the upcoming #RBNZ rate decision following rosy economic data. However, downside potential in the S&P 500 could offset $NZDUSD gains. Get your #currencies update from @ddubrovskyFX here: https://t.co/LfCe6C6G3P https://t.co/kUeBxxeaEf
  • It was a quiet week in Aussie as $AUDUSD put in its second consecutive week of indecision. But taking a more granular look highlights the potential for a reversal scenario. Get your #currencies update from @JStanleyFX here: https://t.co/PPK20nubAf https://t.co/0nfmRRFNnz
  • The S&P 500 pushed the market's comfort with a head-and-shoulders pattern through Friday's close. What should we look for in technical patterns, overlapping fundamental tides and speculative positioning for the likes of $EURUSD next week? https://www.dailyfx.com/forex/video/daily_news_report/2020/09/19/EURUSD-Pressure-Building-while-Anxious-Traders-Weigh-Did-SP-500-Break.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/lgVJVwi8th
  • Sterling remains trapped by overarching fundamentals drivers and both $GBPUSD and $EURGBP are going to have to wait until the Brexit dust settles. Get your #currencies update from @nickcawley1 here: https://t.co/vF1K1cy0nd https://t.co/NSA7qiQihc
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/d9EmTOHyTv
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true.Simplify your trading strategy with these four indicators here:https://t.co/A4dqGMPylo https://t.co/xqbUxwWgTZ
  • An economic calendar is a resource that allows traders to learn about important economic information scheduled to be released. Stay up to date on the most important global economic data here: https://t.co/JdvW6HNuqV https://t.co/Gi8LHCT5sB
  • The AB=CD pattern is simple once you know how to spot it and draw the proper Fibonacci retracements. Make your trading strategy as simple as ABCD here: https://t.co/AKmlmaAZBS https://t.co/FFmRYyx4ou
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/r7aJb4qpqc
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/ERyiY47G5H https://t.co/fIGDaDW21V
Yet Another USD/JPY Disaster

Yet Another USD/JPY Disaster

2013-06-13 13:20:00
Boris Schlossberg, Technical Strategist
Share:

Another cavernous decline in the Nikkei caused the USDJPY to plummet all the way below the 94.00 level in today’s Asian session, and the pair may now sell off further following the US retail sales report.

Another harrowing bout of USDJPY liquidation has unfolded in Asia overnight and the pair tumbled all the way below the 94.00 level in the wake of a -6.35% decline in the Nikkei. This latest drop in the Nikkei has sent risk-aversion flows reverberating through the capital markets, and with the Nikkei now fully 20% off its highs, it’s officially in bear-market territory.

Japanese Cabinet Secretary Yoshihide Suga tried to shrug off the recent volatility in the markets, saying that it is simply the result of profit taking by investors, but the turbulence in equities has clearly made its way to FX with USDJPY now nearly ten full figures off its recent highs.

The decline in USDJPY has been stunning in its strength and swiftness, and it may now have negative repercussions for Japanese growth because exporters must quickly adjust to the appreciating Japanese yen (JPY).

Although there are probably many factors behind today's collapse, including the liquidation of some long-term positions once the key 95.00 barrier was broken, the primary factor behind this week's USDJPY selloff is investor disappointment now that Japanese policy initiatives appear to have stalled.

This week's Bank of Japan (BoJ) meeting, which offered no new policy initiatives or stimulus programs, was the reason for the rapid change in FX sentiment. BoJ Governor Haruhiko Kuroda simply repeated the well-known policy points of the new regime, and that gradualist message resonated very badly with the market, which was looking for more dramatic actions on the monetary and fiscal fronts.

See also: A Local Decision with Global FX Implications

However, Japanese policy officials are struggling with the volatility in the fixed-income market and may not be able to act as aggressively as they like. As many analysts have pointed out, with the country's extremely high debt-to-GDP ratio, any spike in yields presents massive fiscal challenges to the current government and limits its ability to reflate the economy to its 2% target.

That's why any help for USDJPY longs is likely to come from the US side of the Pacific while Japanese policy choices become restricted. If US economic data can show some accelerating growth, then the rise in US Treasury yields should translate into higher USDJPY rates as traders begin to price in the Fed’s likely tapering of quantitative easing (QE) measures.

To that end, today's US retail sales data may serve as the make-or-break event for USDJPY. If the data can show a robust rebound in US consumer demand, then USDJPY may be able to recover much of the losses and trade back towards the 95.00 level as short covering kicks in.

If, on the other hand, US retail data disappoints, the report could usher in another wave of selling that could push the pair below the 93.00 level as cascading stop losses trigger panic selling.

See also: This Week’s Biggest US Dollar Driver

By Boris Schlossberg of BK Asset Management

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES