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.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Oil - US Crude
Wall Street
More View more
Real Time News
  • Weakness in equity markets continued last week as losses built and technical patterns hint further bearishness might be ahead. Get your #equities update from @PeterHanksFX here:
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here:
  • 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:
  • #Gold prices succumbed to selling pressure as the US Dollar soared this past week What is #XAUUSD facing these next few days and can these fundamental forces extend its selloff? Check out my outlook here -
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here:
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here:
  • 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:
  • The price of #oil may continue to trade in a narrow range as the rebound from the September low ($36.13) appears to have stalled ahead of the month high ($43.43). Get your #commodities update from @DavidJSong here:
  • The Australian Dollar may extend its slide lower despite the planned easing of Covid-19 restrictions, as the market continues to price in an RBA rate cut on October 6. Get your #currencies update from @DanielGMoss here:
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your USD/INR market update here:
Forex: USDOLLAR Continues To Eye 10,000, Further JPY Strength On Tap

Forex: USDOLLAR Continues To Eye 10,000, Further JPY Strength On Tap

2012-11-12 18:40:00
David Song, Strategist





Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index






Forex_USDOLLAR_Continues_To_Eye_10000_Further_JPY_Strength_On_Tap_body_ScreenShot032.png, Forex: USDOLLAR Continues To Eye 10,000, Further JPY Strength On Tap

Although the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) remains 0.09 percent lower from the open, the series of higher lows should pave the way for higher highs, and we are still looking for another run at the 10,000 figure as the ascending channel carried over from October continues to take shape. At the same time, the upward trend in the 30-minute relative strength index continues to reinforce our bullish outlook for the greenback, but the headlines coming out of the EU meeting may dampen the appeal of the reserve currency as European policy makers increase their effort to restore investor confidence. As the economic docket for the U.S. remains fairly light over the next 24-hours of trading, risk trends should drive price action across the forex market, but the fresh batch of central bank rhetoric on tap for later this week may keep the USDOLLAR within a tight range as market participants weigh the outlook for monetary policy.

Forex_USDOLLAR_Continues_To_Eye_10000_Further_JPY_Strength_On_Tap_body_ScreenShot033.png, Forex: USDOLLAR Continues To Eye 10,000, Further JPY Strength On Tap

Indeed, the FOMC Minutes highlight the biggest event risk for the greenback, and we may see the central bank strike an improved outlook for the region as the world’s largest economy gets on a more sustainable path. As a result, we may see a growing number of Fed officials scale back their dovish tone for monetary policy, and the committee may continue to rely on its transmission mechanisms to encourage private sector activity as the gradual recovery dampens the central bank’s scope to expand its balance sheet further. In turn, the policy statement may serve as the fundamental catalyst to spark a run at the 10,000 figure, and the bullish pattern in the 10, 20 and 50 day moving averages certainly points to a higher dollar as the indicators start to diverge from one another. At the same time, we will need to keep a close eye on the relative strength index as it approaches overbought territory, but we should see the index track higher in the coming days as the oscillator preserves the upward trending from back in September.

Forex_USDOLLAR_Continues_To_Eye_10000_Further_JPY_Strength_On_Tap_body_ScreenShot034.png, Forex: USDOLLAR Continues To Eye 10,000, Further JPY Strength On Tap

Two of the four components advanced against the greenback, led by a 0.39 percent rally in the Australian dollar, while the Japanese Yen gained 0.04 percent even as the 3Q GDP raised the threat for a double-dip recession in the world’s third-largest economy. As growth and inflation remains subdued, we anticipate the Bank of Japan to carry its easing cycle into the following year, but a further expansion in the central bank’s balance sheet may do little to dampen the appeal of the low-yielding currency as the Yen continues to benefit from positive real interest rates in Japan. As the relative strength index on the USDJPY continues to fall back from overbought territory, the pullback from the monthly high (80.66) should continue to pan out over the near-term, and we may see the pair work its way back towards the 78.00 figure as the dollar-yen continues to search for support.

--- Written by David Song, Currency Analyst

To contact David, e-mail Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

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