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.

Free Trading Guides
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
Wall Street
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.31%, while traders in US 500 are at opposite extremes with 76.93%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/K2JT5NtBzZ
  • Commodities Update: As of 13:00, these are your best and worst performers based on the London trading schedule: Gold: 0.64% Silver: 0.13% Oil - US Crude: -1.76% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ERG8JOGxZf
  • Indices Update: As of 13:00, these are your best and worst performers based on the London trading schedule: France 40: -0.23% Wall Street: -0.31% US 500: -0.36% Germany 30: -0.54% FTSE 100: -0.72% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/JEODi73ZcM
  • Finland's government states that is rejects EC proposal for recovery package as it now stands and demands change $EUR
  • GBP/USD is easing back Thursday after a week of gains as the June 30 deadline for the UK to ask for an extension of its Brexit transition period approaches. Get your $GBPUSD market update from @MartinSEssex here:https://t.co/ymQqurP9Nw https://t.co/pmPrbAgrC6
  • One for the ECB minutes to provide clarity - Lagarde says there was "broad" consensus over EUR 600bln boost in PEPP
  • In reaction to the larger than expected stimulus package, the Euro jumped to fresh highs of 1.1270 from 1.1200.Get your $EURUSD market update from @JMcQueenFX here:https://t.co/JdjmStjKwa https://t.co/aOdPDrpvNM
  • #LAGARDE sobre el tribunal de justicia alemán: El #BCE está bajo jurisdicción de la corte de justicia europea y tenemos fe en que se encuentre una solución adecuada que no hiera los intereses del BCE ni de los otros implicados $EUR
  • ECB says they have not discussed adding corporate junk bonds to PEPP $EUR
Japanese Yen Strengthens Further Following Disappointing US Housing Data

Japanese Yen Strengthens Further Following Disappointing US Housing Data

2012-05-30 14:25:00
Christopher Vecchio, CFA, Senior Strategist

THE TAKEAWAY:US Pending Homes Sales Decline > Housing Recovery Remains Weak > USDJPY Depreciates

The US economy is starting to show signs of stress in the housing sector again. After yesterday’s S&P/Case-Shiller index showed that housing prices dropped to their lowest post-crisis (2008) levels, today’s Pending Home Sales reading for April has solidified concerns. From March, sales dropped by 5.5 percent, while on a yearly-basis sales increased by 14.7 percent. According to a Bloomberg News survey, market participants were expecting no change in the monthly reading, but were anticipating a massive 22.0 percent increase year-over-year. Even in comparison to the prior figures, which were revised down to 3.8 percent m/m (from 4.1 percent) and 10.5 percent y/y (from 10.8 percent), it’s clear that this report was all-around disappointing.

This data is even more discouraging when considering mortgage rates, which Zillow reported yesterday, had fallen to 3.60 percent. As noted previously, it is our firm belief that the housing market has not bottomed yet. If housing sales are continuing to fall even as mortgage rates remain at record lows, it’s clear that buyers are waiting for prices to drop lower; and until prices drop further, the housing market won’t have a sustained rate of demand to suggest a bottom is in place. This in turn could lead the Federal Reserve to try and ease tensions further, in the form of mortgage back security (MBS) purchases, which in theory should helping lending.

USDJPY 1-minute Chart: May 30, 2012

Japanese_Yen_Strengthens_Further_Following_Disappointing_US_Housing_Data_body_Picture_1.png, Japanese Yen Strengthens Further Following Disappointing US Housing Data

Charts Created using Marketscope – Prepared by Christopher Vecchio

Following the release, the US Dollar was sold off across the board, as it’s clear that market participants have raised their expectations for another round of quantitative easing by the Fed. Typically, and as was the case today, when QE hopes arise, the Japanese Yen tends to benefit as the “most palatable” safe haven, relatively speaking. The USDJPY, which was already down over 0.60 percent on the day, fell from just below 79.00 to a fresh session low of 78.87. This is the lowest exchange rate that the USDJPY has traded at since February 16.

USDJPY declines should be supported by 78.65, the 200-DMA. As Currency Strategist Michael Boutros notes, the “sweet spot” for the USDJPY rests in the 78.65 to 79.10/15 area, and we both expect this area to mark a major inflection point for the currency. That is to say, that a break below 78.65 could lead to a quick move towards 77.00, whereas consolidation in this zone should form a base for a move back towards 85.00. This view is invalidated should the Federal Reserve announce another round of QE, which would dilute the value of the US Dollar and send investors back into the Japanese Yen as the favored safe haven (that is until the Bank of Japan steps in to intervene itself).

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to cvecchio@dailyfx.com

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


News & Analysis at your fingertips.