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USD Falters at Resistance, JPY Spikes Higher on FX Flash Crash- US Market Open

USD Falters at Resistance, JPY Spikes Higher on FX Flash Crash- US Market Open

Justin McQueen,

MARKET DEVELOPMENT – JPY SPIKES HIGHER, USD WEAKENS

JPY (+1%): Following a “flash crash” in major JPY crosses at the beginning of the Asian session, the JPY remains the outperformer. Multiple factors had contributed to the sell-off, in which AUDJPY had plunged as much as 6% before partially retracing its losses. USDJPY continues to hover just south of the 108 level, paring back from the lows of 104.99. Surprisingly hitting our USDJPY 2019 target a lot sooner than expected.

USD (-0.4%): The USD is on the backfoot against its major counterparts, despite a stellar ADP employment, which smashed analyst estimates (271k vs. Exp. 178k). However, given seasonal factors and an already tight labour, this is not all too surprising. The greater focus and key risk event is the ISM Manufacturing, whereby a soft reading will increase the risk of a synchronised global slowdown. Of note, the most recent global PMI fell to the lowest level since September 2016.

CAD (+0.4% / NOK (+0.1%): Commodity currencies are firmer this morning as another strong bid in oil prices support, while the weakness in the USD has also added to the strength. Since Brent hit a low of $50.34, oil prices have stabilised recently, with prices up over 11%. Seasonal factors and stabilising oil prices bodes well for firmer NOK/SEK and softer EURNOK.

DailyFX Economic Calendar: Thursday, January 03, 2019 – North American Releases

DailyFX Webinar Calendar: Thursday, January 03, 2019

Four Things Traders are Reading

  1. JPY Soars as "Flash Crash" Moves Spark Flight to Havens” by Justin McQueen, Market Analyst
  2. US Dollar (USD) Has Room to Rally Further Ahead of US Payroll Data”by Nick Cawley, Market Analyst
  3. Gold Price Rise Accelerates as Global Market Sentiment Worsens” by Martin Essex, MSTA, Analyst and Editor
  4. Apple Profit Warning Weighs on S&P 500 and Nasdaq, Exposed Stocks Plunge” by Justin McQueen, Market Analyst

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

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