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
Please try again
Oil - US Crude
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
More View more
Real Time News
  • Myth or fact? One thing is for sure, there are a lot of misconceptions about trading. Knowing the difference between common trading myths and the reality is essential to long-term success. Find out about these 'myths' here:
  • What are some monetary policies that could affect Gold this quarter? Get your Gold free forecast here: #DailyFXGuides
  • Even more remarkable than the record high levels of leverage registered in US equities this past week was the attention it garnered. Paying attention to risk is a threat when markets are this high and the docket as dense as it is this week. My outlook:
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here:
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here:
  • USD hegemony is at risk thanks to changes in the global economy and the long-term consequences of the US-China trade war. Get your market update from @CVecchioFX here:
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge:
  • The formation of several bullish technical patterns suggests that the haven-associated Japanese Yen is at risk of further losses against the Euro and Australian Dollar. Get your market update from @DanielGMoss here:
  • Natural gas is moving lower after weather models pointed to warmer-than-average temperatures across much of the US. Get your market update from @FxWestwater here:
USD Carving Top Ahead of Sequester, JPY at Risk Amid Deflation

USD Carving Top Ahead of Sequester, JPY at Risk Amid Deflation

David Song, Strategist





Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index






Forex_USD_Carving_Top_Ahead_of_Sequester_JPY_at_Risk_Amid_Deflation_body_ScreenShot021.png, USD Carving Top Ahead of Sequester, JPY at Risk Amid Deflation

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is trading 0.08 percent higher from the open after moving 56 percent of its average true range, and the reserve currency may track higher over the remainder of the week as the upward trending channel from earlier this month continues to take shape. As the dollar bounces ahead of trendline support, we may see the index make another run at the 10,450 figure, but we may see the reserve currency consolidate over the next 24-hours of trading as the sequester takes center stage. Indeed, the International Monetary Fund (IMF) warned that it would ‘reevaluate’ its fundamental assessment for the U.S. economy as the $85 cut in public spending dampens the outlook for growth, and we may see a more meaningful correction in the USDOLLAR as it fuels speculation for additional monetary support. We will be keeping a close eye on the 30-minute relative strength index as it approaches overbought territory, but the bullish sentiment surrounding the greenback may gather pace in March as the FOMC continues to scale back its dovish tone for monetary policy.

Forex_USD_Carving_Top_Ahead_of_Sequester_JPY_at_Risk_Amid_Deflation_body_ScreenShot022.png, USD Carving Top Ahead of Sequester, JPY at Risk Amid Deflation

Although Atlanta Fed President Dennis Lockhart argued that the zero-interest rate policy (ZIRP) will persist for ‘some time,’ Dallas Fed President Richard Fisher warned that the central bank is ‘running the risk of overkill’ as the committee continues to embark on quantitative easing. In turn, Mr. Fisher said that the FOMC should ‘taper the dose of QE so that markets can adjust gradually to the eventual removal of this treatment,’ and we may see a growing number of Fed officials scale back their willingness to expand the balance sheet further as the world’s largest economy gets on a more sustainable path. At the same time, a report by the New York Fed showed household debt increasing 0.3 percent in the fourth-quarter amid the highly accommodative policy stance, and we should see the central bank slowly move away from its easing cycle as the economic recovery gradually gathers pace. Nevertheless, we’re still looking for a near-term reversal as the relative strength index comes off of resistance (76), but the shift in central bank rhetoric may produce a shallow correction in the USDOLLAR as the RSI maintains the upward trend dating back to September.

Forex_USD_Carving_Top_Ahead_of_Sequester_JPY_at_Risk_Amid_Deflation_body_ScreenShot023.png, USD Carving Top Ahead of Sequester, JPY at Risk Amid Deflation

Two of the four components weakened against the greenback, led by a 0.45 percent decline in the Euro, while the Japanese Yen shed 0.15 percent as Prime Minister Shinzo Abe nominated nominates Asian Development Bank President Haruhiko Kuroda to head the Bank of Japan. Indeed, there’s growing speculation that the new central bank head will implement more non-standard measures to achieve the 2% target for inflation, and low-yielding currency remains poised to face additional headwinds throughout 2013 as the BoJ continues to embark on its easing cycle. In turn, the deviation in the policy outlook should push the USDJPY higher over the near to medium-term, and we may see the low-yielding currency continue to lose ground over the next 24-hours of trading as the economic docket continues to highlight negative price growth in the Japanese economy.

--- 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.