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.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • Heads Up:🇯🇵 JPY Machine Orders (YoY) (OCT) due at 23:50 GMT (15min), Actual: N/A Expected: -1.7% Previous: 5.1% https://www.dailyfx.com/economic-calendar#2019-12-11
  • Heads up: Japan’s Machine Orders (YoY) (OCT) is due at 23:50 GMT (15 min) Est: -1.7% Previous: 5.1% #JPY
  • The $USD may fall against the Japanese Yen as bearish technical positioning plays out. The Nikkei 225 stock index could follow suit. Get your market update from @IlyaSpivak here:https://t.co/FeaxCvsjH2 https://t.co/jqPGFJeA8i
  • #CLP, #ZAR and the #COP are expected to be the most active Emerging Markets currencies vs #USD with 1-week implied volatilities at 14.70, 11.90 and 11.39 respectively
  • President Trump likely to meet with top trade advisers on Thursday to discuss December 15 tariffs on Chinese goods according to Reuters sources #Tradewar
  • $USDJPY Daily Pivot Points: S3: 108.06 S2: 108.31 S1: 108.43 R1: 108.68 R2: 108.8 R3: 109.05 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • $EURUSD breaking above falling resistance from June after the #Fed and comments from Chair Jerome Powell sent #USD lower. Next key barrier at 1.1182. Granted, we still have #ECB, #UKelection2019 and Dec 15 US-China tariff deadline. Volatility still in the cards https://t.co/zilL59V8ul
  • $GBPUSD Daily Pivot Points: S3: 1.3056 S2: 1.3104 S1: 1.3124 R1: 1.3173 R2: 1.3202 R3: 1.325 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • $EURUSD implied volatility surged to 10.1% for the overnight tenor with interest rate decisions from the Fed and @ecb due today at 19:00 GMT and tomorrow at 12:45 GMT respectively. Get your market update from @RichDvorakFX here: https://t.co/c4MwWwtUEg https://t.co/srZifnviYv
  • $EURUSD Daily Pivot Points: S3: 1.102 S2: 1.1043 S1: 1.1054 R1: 1.1076 R2: 1.1089 R3: 1.1111 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
USDOLLAR Index Flirting with Break; BOJ Meddling in JPY

USDOLLAR Index Flirting with Break; BOJ Meddling in JPY

2016-02-11 13:14:00
Christopher Vecchio, CFA, Sr. Currency Strategist
Share:

Talking Points:

- Commodities, equities tumble, bonds, precious metals, Yen rally.

- BOJ rumored to have started intervening in market after 12 GMT.

- As market volatility rises, it's a good time to review the "Traits of Successful Traders" series.

It's day two of Fed Chair Janet Yellen's trip to The Hill, and things can only get better: truthfully, yesterday's testimony was a waste of time. The United States is in the midst of a rather vicious presidential election cycle, so seeing a bit of political theater shouldn't be surprising; but the lack of depth to the questions yesterday clearly shows how out of touch fiscal policymakers are with the economy. The Fed - monetary policy - may be at its limits. Stimulative fiscal policy - infrastructure reinvestment and education initiatives, to start - would go much further for helping the US' structural labor market issues over the long-term than say, the Fed keeping rates near zero for another six months. Hopefully the Senate Banking Committee yields more insight into the Fed's thinking rather than another tortorous session on elementary concepts of policy making.

Policymaking seems to be front and center these days, not just in the US, but in the Euro-Zone, China, and Japan. Officials are having a difficult time communicating confidence to markets, and as a result, a lot of the recent price action across the G10 currencies has been driven by central bank meddling. As we forecast would happen on January 6, the Riksbank intervened in EUR/SEK to weaken the Swedish Krona. As we had diagnosed in the discussion on the BOJ's shift to NIRP on January 29, markets have quickly wisened up to the charade that is the BOJ's competitive devaluation policy; one that is failing now that JGBs have turned negative and the Ministry of Finance has had to cancel the March 10Y JGB auction.

Central banks are getting desperate, moving to counter one another at each turn it seems. Volatility across asset classes seems almost guaranteed to stay for the foreseeable future.

See the above video for a deeper discussion on Fed Chair Yellen's testimony and for technical considerations in EUR/USD, GBP/USD, AUD/USD, USD/JPY, AUD/JPY, and the USDOLLAR Index.

Read more: With the USDOLLAR at Key Support, is Yellen the Last Line of Defense?

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com.

Follow him on the DailyFX RTN, Twitter, and Stocktwits at @CVecchioFX.

To be added to Christopher’s e-mail distribution list, please fill out this form.

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

DISCLOSURES

News & Analysis at your fingertips.