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
EUR/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
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.39% France 40: 0.32% FTSE 100: 0.26% US 500: 0.01% Wall Street: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/ljSeRVDbh8
  • Gilead Sciences receives FDA approval for Remdesivir - BBG
  • $GILD | Gilead Sciences receives FDA approval for coronavirus treatment remdiesivir
  • https://t.co/WnuPTDjq0J
  • Can bulls continue to push? While the bullish theme in Gold remains on hold, buyers haven’t been so bashful around Bitcoin. Get your $btc technical analysis from @JStanleyFX here:https://t.co/yLoAnTe6Py https://t.co/HD2spNq4FC
  • Precious Metals Update: #Gold 1904.24 (-1.04%), #Aluminum 1843.50 (+0.49%), and #Copper 6991.50 (+1.34%) [delayed]
  • US Dollar volatility remains heightened in the midst of back-and-forth stimulus negotiations. Get your $USD market update from @RichDvorakFX here:https://t.co/CfpaGfgTrq https://t.co/YCU6VIjlwX
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.00% Gold: -1.08% Silver: -1.58% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/V3riWytkHs
  • some interesting $BTC charts though. Even as Gold and Silver remain in sluggish digestion patterns, Bitcoin just launching higher through some big res. PTJ singing the praises prob didn't hurt #Bitcoin $BTCUSD https://t.co/nC9cKkcbNe https://t.co/NC4Hqd8qoH
  • Fiscal updates are basically the new trade war updates. https://t.co/3P01Ys8Qgr
USD Index Searches for Support- JPY Losses to Soften the Blow

USD Index Searches for Support- JPY Losses to Soften the Blow

2012-06-06 23:16:00
Michael Boutros, Strategist
Share:
USD_Index_Searches_for_Support-_JPY_Losses_to_Soften_the_Blow_body_Picture_4.png, USD Index Searches for Support- JPY Losses to Soften the BlowUSD_Index_Searches_for_Support-_JPY_Losses_to_Soften_the_Blow_body_Picture_3.png, USD Index Searches for Support- JPY Losses to Soften the Blow

The greenback is markedly weaker at the close of North American trade with the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) off by 0.67% on the session after moving a full 135% of its daily average true range. The losses come on the back of a stellar performance in equity markets with a rebound in risk appetite fueling a broad-based rally in stocks amid speculation that the ECB will do more to shore up the ailed banking system while fostering a stronger recovery. At the same time, renewed speculation for another round of quantitative easing from the Fed propped up risk sentiment despite an upbeat Beige Book and it seems as though market participants continue to see scope for additional support as the deepening crisis in Europe threatens the global economy. Stocks closed at session highs with the Dow, the S&P, and NASDAQ surging 2.37%, 2.30% and 2.40% respectively while the greenback posted its largest single day decline since January 27th.

The dollar pulled away from key daily resistance at the 100% Fibonacci extension taken from the August 1st and October 27th troughs at 10,255 with and RSI break back below the 60-mark suggesting that a larger correction may already be underway. Daily support comes in at the former October high at 10, 134 backed by the 78.6% extension at 10,080. While our long-term outlook remains weighted to the topside, look for the dollar to remain on the defensive as we head into Asia-Pacific trade with only a break below 10,080 invalidating our bias.

USD_Index_Searches_for_Support-_JPY_Losses_to_Soften_the_Blow_body_Picture_2.png, USD Index Searches for Support- JPY Losses to Soften the Blow

An hourly chart shows the index trading within the confines of a newly formed descending channel formation with the greenback closing below the 23.6% Fibonacci retracement taken from the May advance at 10,203. Soft interim support now rests at 10,156 with subsequent floors seen at the 38.2% retracement at 10,130, 10,100, and the 50% retracement at 10,070. Initial resistance is eyed at the confluence of channel resistance and the 23.6% retracement at 10,203 backed by 10,255, 10,275 and 10,300. A breach above last week’s high at 10,323, invalidates this current setup with such a scenario eying topside targets at 10,134, and 10,400. Note that the index will likely remain under pressure in the interim with a breach above channel resistance and an RSI break above 60 needed to dispel further downside pressure.

USD_Index_Searches_for_Support-_JPY_Losses_to_Soften_the_Blow_body_Picture_1.png, USD Index Searches for Support- JPY Losses to Soften the Blow

The greenback declined against three of the four component currencies highlighted by a 1.86% decline against the Australian dollar. Stronger than expected GDP data coupled with a rebound in broader market sentiment fueled a massive rally in the high yielder as growth prospects improved and despite a 25 basis points interest rate cut earlier this week. While the rally has been rather impressive, it’s important to note that key employment data released later tonight may intensify the volatility with a weaker than expected print risking a pullback of magnitude after posting its largest single day advance this year.

The Japanese yen is the weakest performer of the lot with a loss of 0.62% on the session. The continued risk on environment is likely to keep the yen under pressure in the interim as investors unwind haven trades move in favor of higher yielding assets. We have maintained our long position from last week with initial targets now targeted at 80.10. For a technical outlook and key levels on the AUD/USD and the USD/JPY, refer to the Winners/Losers report.

---Written by Michael Boutros, Currency Strategist with DailyFX.com

Join Michael on Thursday morning for a Live Scalping Webinar at 1400GMT (10ET)

To contact Michael email mboutros@dailyfx.com or follow him on Twitter @MBForex for the latest charts and commentary

To be added to Michael’s distribution list, send an email with the subject line “Distribution List”

Introduction to Scalping for Beginners Webinar

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

DISCLOSURES