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
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
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
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
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.08%, while traders in US 500 are at opposite extremes with 71.40%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Asn1swWh7q
  • Heads Up:🇲🇽 Industrial Production YoY (MAY) due at 11:00 GMT (15min) Expected: -24.3% Previous: -29.3% https://www.dailyfx.com/economic-calendar#2020-07-10
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Silver: 0.29% Gold: 0.15% Oil - US Crude: -2.55% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4BnbUobwrJ
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.42% 🇪🇺EUR: 0.09% 🇳🇿NZD: 0.08% 🇦🇺AUD: -0.04% 🇨🇭CHF: -0.10% 🇨🇦CAD: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/wFigkggpWQ
  • A macro forex trading guide exploring how to trade the Euro vs the Swedish Krona and Norwegian Krone through the prism of the Core-Perimeter model. Get your market update from @ZabelinDimitri here:https://t.co/n6zwlZJmGO https://t.co/Y79noqMYjd
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.32% Germany 30: 0.22% France 40: 0.10% US 500: -0.48% Wall Street: -0.57% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/QApJ84oHnR
  • Yesterday, USD/CHF declined to a near three- months low. Will today’s US PPI numbers at (13:30UK) boost the US dollar price? #USDCHF, #USeconomy, #USD https://t.co/iMm8NARYxe
  • UK 8-year Gilts on the cusp of turning negative..#gilts #sterling @DailyFXTeam https://t.co/ldXS2eYzJl
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here:https://t.co/vg7w10la3j https://t.co/8rwkKVigC4
  • South Africa's Eskom says the possibility that Eskom may be forced to implement loadshedding has increased as the power system is severely constrained $ZAR
Yen Continues to Extend Declines; Sterling Pressured by Dovish Minutes

Yen Continues to Extend Declines; Sterling Pressured by Dovish Minutes

2012-02-22 11:54:00
Joel Kruger, Technical Strategist
Share:
  • Greece agreement out of the way but saga still ongoing
  • UK Telegraph highlights some of the risks ahead
  • Yen emerging as the major story amidst Eurozone mess
  • USD/JPY breaks back above 80.00 for first time in 6 months
  • Daily RSI at highest level in over 10 years
  • BOE Minutes show some members wanted more QE
  • European PMIs softer than expected

The fallout from the latest Greece agreement has been rather uneventful and the Euro remains locked in a multi-session consolidation. Although the development was indeed a positive one, investors are still anticipating more troubles out of the Eurozone over the coming days and weeks. The question on everyone’s mind right now is whether Greece will indeed be able to effectively implement the austerity measures required by the EU and IMF. The UK Telegraph has also dampened things somewhat after pointing out that with Greek elections just around the corner, there is still a good deal of uncertainty that needs to be priced in.

Relative performance versus the USD Tuesday (as of 11:50GMT)

  1. CHF -0.02%
  2. EUR -0.05%
  3. CAD -0.12%
  4. AUD -0.26%
  5. NZD -0.32%
  6. GBP -0.42%
  7. JPY -0.66%

But with all of the attention on the ongoing Eurozone saga, some might be missing the more interesting price action in the market right now, with the Yen taking front and center stage. After months of directionless price action by record highs against the US Dollar, the Yen has finally started to breakout and to the downside for that matter, warning of a major structural shift. The recent moves by the Bank of Japan to increase bond purchases have not been taken lightly, and this is seen as the primary driver for the Yen selling.

Additionally, the impressive bid tone in global equities and the Nikkei in particular is also adding to the Yen depreciation. From here however, we think additional Yen weakness over the short-term could be a tough go, with technical studies so stretched and warning of a short-term correction. USD/JPY has broken back above 80.00, but there are some solid offers between 80.25-80.75 that should cap additional gains from here. It is also worth noting that the daily RSI in USD/JPY is at its highest levels since December 2001 when the market was trading above 130.00.

Elsewhere, the Pound has been the second worst performing major currency on the day thus far after the Bank of England Minutes revealed a 7-2 split on the vote to increase asset purchases, with the dissenting members appealing for an even more aggressive raising of the facility than what was delivered. German manufacturing PMIs came in on the weaker side of expectation but failed to materially influence trade.

ECONOMIC CALENDAR

Yen_Continues_to_Extend_Declines_Sterling_Pressured_by_Dovish_Minutes_body_Picture_5.png, Yen Continues to Extend Declines; Sterling Pressured by Dovish Minutes

TECHNICAL OUTLOOK

Yen_Continues_to_Extend_Declines_Sterling_Pressured_by_Dovish_Minutes_body_eur.png, Yen Continues to Extend Declines; Sterling Pressured by Dovish Minutes

EUR/USD: Inability to close below previous key support at 1.3025 leaves the market locked in some multi-day consolidation, with no clear short-term directional bias. At this point, the key levels to watch above and below comes in by 1.3325 and 1.2970 respectively, and a daily close above or below will be required to open the door for the next major move. Until then, we can expect to see some choppy inter-day trade.

Yen_Continues_to_Extend_Declines_Sterling_Pressured_by_Dovish_Minutes_body_jpy2.png, Yen Continues to Extend Declines; Sterling Pressured by Dovish Minutes

USD/JPY:The market is doing a good job of showing the potential for the formation of a major cyclical bottom after taking out the 200-Day SMA and now clearing psychological barriers by 80.00 for the first time in 6 months.This further solidifies basing prospects and we could be in the process of seeing a major bullish structural shift that exposes a move towards 85.00-90.00 over the coming months. At this point, only back under 77.00 would delay outlook and give reason for concern. However, in the interim, it is worth noting that gains beyond 80.00 over the coming sessions could prove short-lived with technical studies at their most overbought levels in over 10 years and warning of some corrective declines towards previous resistance now turned support by 78.00 before bullish continuation.

Yen_Continues_to_Extend_Declines_Sterling_Pressured_by_Dovish_Minutes_body_gbp2.png, Yen Continues to Extend Declines; Sterling Pressured by Dovish Minutes

GBP/USD: The market is back to challenging the 200-Day SMA which managed to successfully cap gains on previous attempts. At this point, we continue to recommend fading any strength towards or just over the 200-Day SMA in anticipation for yet another topside failure and bearish resumption. As such, our recommendation would be to look to sell rallies towards 1.6000. Ultimately, only a close above 1.6250 would fully negate outlook.

Yen_Continues_to_Extend_Declines_Sterling_Pressured_by_Dovish_Minutes_body_swiss1.png, Yen Continues to Extend Declines; Sterling Pressured by Dovish Minutes

USD/CHF: Setbacks have been very well supported in early 2012 ahead of 0.9000, and it looks as though the market could be looking to carve a medium-term higher low ahead of the next major upside extension. We will now look for a weekly close back above 0.9300 to provide added confirmation for probability of underlying bullish resumption. Ultimately, look for a push back above 0.9600 and towards 1.0000 over the coming weeks. Only a break and weekly close below 0.9000 would negate and give reason for concern.

--- Written by Joel Kruger, Technical Currency Strategist

To contact Joel Kruger, email jskruger@dailyfx.com. Follow me on Twitter @JoelKruger

To be added to Joel Kruger’s distribution list, send an email with subject line “Distribution List” to jskruger@dailyfx.com

Click here for real time news and market commentary.

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

DISCLOSURES

News & Analysis at your fingertips.