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
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
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
Wall Street
Mixed
Gold
Bearish
GBP/USD
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
USD/JPY
Bearish
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
More View more
Real Time News
  • US 10yr Treasury auction: - Yield 1.680%, WI 1.678% (prev. 1.523%) - 19.14% at high (prev. 27.17%) - Bid-to-Cover: 2.36 (prev. 2.38) $USD
  • Fed's Rosengren: - Expects "unusually strong post-pandemic recovery" - Running economy hot for prolonged periods has risks - Highly accommodative policy is currently appropriate - Financial stability risks are a threat in next recession #Fed $USD
  • ECB's Centeno: - Support measures should stay in place while needed - Premature removal of stimulus may result in substantial costs #ECB $EUR
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.09%, while traders in France 40 are at opposite extremes with 74.96%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/wxHvel5wMw
  • Heads Up:🇺🇸 Fed Rosengren Speech due at 17:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-04-12
  • - Fed will be less preemptive on reacting to inflation - I do think we'll get more inflation this year
  • #Gold has continued to step back from the one month high hit around 1,755 last week, dropping to a fresh six day low around the 1,730 level today. $XAU $GLD https://t.co/I3qpQ1k7MR
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.54% Gold: -0.69% Silver: -1.79% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/oC1w9BWJTn
  • - Hopeful that the economy can switch to high-productivity growth after the pandemic - Appetite for holding liquid government debts is insatiable and this trend does not look to be reversing
  • USD/CAD attempts to retrace the decline following the update to Canada’s Employment report in an effort to retain the opening range for April. Get your $USDCSD market update from @DavidJSong here:https://t.co/TZ7s4X1VXF https://t.co/aqycOmCINp
Light Calendar has Japanese Yen at Risk from Abroad: ECB, NFPs

Light Calendar has Japanese Yen at Risk from Abroad: ECB, NFPs

Christopher Vecchio, CFA, Senior Strategist
Light_Calendar_has_Japanese_Yen_at_Risk_from_Abroad_ECB_NFPs_body_Picture_1.png, Light Calendar has Japanese Yen at Risk from Abroad: ECB, NFPs

Fundamental Forecast for Japanese Yen: Neutral

  • EURJPY plunges from weekly high as Euro slumps on ECB rate cut speculation.
  • The USDJPY rallied after the Fed announced QE3 would remain in place through at least December.
  • Monitor intraday momentum in the JPY-crosses using the StrongWeak app.

The Japanese Yen continued to trade broadly sideways through the last week of October as the continued streak of depressed volatility has stirred little interest in the low yielding funding currency. The Yen’s diminished appeal can in part be attributed to the Federal Reserve’s decision to hold QE3 in place at $85B/month: in September, the ‘non-taper’ sent the Yen higher only against the US Dollar; yet no such bullish reaction was seen by the Yen this week.

If anything, the reaction seen in the JPY-crosses this week exhibited that incoming speculation over the Fed’s policy path is being direction at the US Dollar. The headline barometers of risk in FX, the AUDJPY and the NZDJPY, were relatively unchanged at -0.12% and up +0.69%, respectively, between the release of the Fed’s policy statement on Wednesday and the weekly close on Friday. Barring significant event risk, the Yen only stands to benefit if QE3 speculation firms once more, provoking a flight to safety in FX. Without such a catalyst, the Japanese Yen may find struggle finding direction in the near-term.

With that said, it is important to note that there are themes developing which could change the Yen’s fortunes. While the Japanese economic calendar is rather quiet this week, there are several “high” importance events elsewhere on the DailyFX Economic Calendar. In fact, there are three central bank meetings (the RBA on Tuesday, the BoE and the ECB on Thursday) and four labor market reports (New Zealand on Tuesday, Australia on Wednesday, Canada and the United States on Friday).

Of these events, the ECB meeting on Thursday could pose the most risk to the Yen – the EURJPY specifically. While volatility readings remain near multi-month and multi-year lows across FX, it is worth pointing out that short-term EURJPY volatility measures have picked up (in absence of other JPY-crosses, like the USDJPY or GBPJPY). EURJPY 1-week implied volatility jumped to as high as 10.78% on Friday (November 1), its largest single-day jump since September 12 (pre-September FOMC positioning).

Over the past several years we’ve observed that higher sustained levels of volatility tend to be bearish for the JPY-crosses; heightened volatility in general tends to push traders into safer, more liquid assets. Yet recent history is not so clear for the EURJPY. In fact, the September 12 jump in 1-week implied volatility didn’t foretell EURJPY weakness; the pair gained +1.65% over the next 5-days.

When we step back and look at the forest rather than the individual trees, we see that the Yen has winds blowing in both directions guiding its price action. Continued high levels of global central bank stimulus – the continuation of the Fed’s QE3, the ECB potentially shifting more dovish this week after the horrible inflation data last week – make it difficult for the Yen to gain tractions relative to higher yielding currencies.

However, there may be more isolated instances of the Yen benefiting given certain event risk ahead, particularly against the Euro or the US Dollar. If the ECB moves towards more easing (another LTRO, a rate cut, etc.) or if the October NFP report shows further stagnation in the US labor market, both the EURJPY and the USDJPY could slip further, irrespective of how the EURUSD trades. With the upcoming Japanese economic calendar on the light side, Japanese data even-keeled the past few weeks and significant event risk abroad over the next few days, we believe a neutral bias for the Yen is appropriate as we wait for fundamental and technical trends to develop more cleanly. –CV

To receive reports from this analyst, sign up for Christopher’s distribution list.

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

DISCLOSURES