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
EUR/USD
Bearish
Oil - US Crude
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
Wall Street
Bullish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
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
More View more
Real Time News
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/mu8ruJd0hG
  • The $USD, Euro, British Pound and Australian Dollar will all be at the mercy of political developments in Asia, Europe and North America this week. An avalanche of PMI data will set the backdrop. Find out from @ZabelinDimitri here: https://t.co/L8cfAgVx94 https://t.co/IkL6eYc0eq
  • Are recent gains in the Indian Rupee and Nifty 50 warranted? Risks are brewing in the background, leaving USD/INR in a consolidative setting as the Nifty pressures resistance. Get your $USDINR market update from @ddubrovskyFX here:https://t.co/svDaSdprvN https://t.co/dkQtNiE1fs
  • Seasonal factors, oversupply issues and the outbreak of COVID-19 has seen the price of liquefied #naturalgas (LNG) fall to 22-year lows (1.519), with the situation exacerbated by ‘fuller-than-normal’ storage facilities. Get your market update here:https://t.co/VOqfkBQ4aR https://t.co/hiWxPVFdMv
  • S&P 500 bulls in command, #Nasdaq 100 produces “V” shaped recovery, while #FTSE 100 extends . Get your #equities market update from @daniele recovery https://t.co/mbWlBUItWv https://t.co/N64fXcj97Y
  • Crude #oil prices await the #OPEC+ meeting where record output cuts could be prolonged as demand for energy from the US and China continues recovering. What could be the downside risks? https://t.co/M8BORPx4sH https://t.co/3kHHeibDb9
  • The risk rally continued in a big way this week and #Euro bulls have remained in-charge against the US Dollar and Japanese #Yen. Get your market update from @JStanleyFX here: https://t.co/o7vPmczvMJ https://t.co/GX2YTXz83u
  • The price of #gold may continue to exhibit a bullish behavior in June as the pullback from the yearly high ($1765) reverses ahead of the May low ($1670). Get your Gold market update from @DavidJSong here: https://t.co/OeaYtCpcIo https://t.co/UQVPIVCTCP
  • The $USD breakdown has taken the index into confluence support at the objective yearly open. Get your USD technical analysis from @MBForex here: https://t.co/A16XEv6n4d https://t.co/GzEp3gCAe5
  • US equities continue to run higher with the Nasdaq 100 setting a fresh all-time-high, not even three months after giving back almost a third of its value in about a month. Get your #Nasdaq technical analysis from @JStanleyFX here: https://t.co/1LI54uvI8x https://t.co/e9FvSLqfaA
Forex: Commentary from Japanese Officials Adds Fuel to Technical Turn in Yen

Forex: Commentary from Japanese Officials Adds Fuel to Technical Turn in Yen

2013-02-08 13:00:00
Christopher Vecchio, CFA, Senior Strategist
Share:

ASIA/EUROPE FOREX NEWS WRAP

With the Euro pulling back significantly yesterday, and the commodity currencies in general signaling broader risk-aversion for the past few weeks, a bit of interesting commentary from a key Japanese official has provoked a sharp pullback in the Yen-crosses (AUDJPY, EURJPY, USDJPY, etc. lower). Japanese Finance Minister Taro Aso said in parliament today that “the yen’s sudden move from ¥78 or ¥79 to ¥90 [versus the US Dollar) was not something we anticipated.”

As Senior Technical Strategist Jamie Saettele made note of in the DailyFX Real Time News feed this morning, a number of ‘bells’ are going off suggesting that we may have arrived at a turning point in the Yen-crosses. Specifically, our attention is on EURJPY; earlier this week, taking a fundamental perspective, I suggested that the Euro may have topped. If the technical conditions are in place to see the Yen bottom and the Euro top, the fundamentals are certainly there as well. According to the CFTC’s COT report, net non-commercial futures positioning remains near its shortest level in the Yen since July 2007. Meanwhile, Euro long positioning has surged. In Japan, Bank of Japan Governor Masaaki Shirakawa announced that he would step down on March 19 earlier this week, but this does not present a material change to the view that further dovish policies will be in place until the new BoJ Governor takes the reins.

Europe is a trickier situation, but one that is starting to look rather fragile. Political concerns in both Italy and Spain are heating up, with the former on the verge of tight elections, while the latter is seeing corruption charges and general disintegrating sentiment towards the government build. On the monetary front, with European Central Bank President Mario Draghi emphatically underscoring the softening inflation and growth outlooks, rate expectations have turned south, sending the EURJPY has towards ¥123.50.

Taking a look at European credit, peripheral yields have eased, but the hangover of the ECB press conference yesterday has held back the Euro from rallying. The Italian 2-year note yield has decreased to 1.594% (-6.5-bps) while the Spanish 2-year note yield has decreased to 2.671% (-8.1-bps). Similarly, the Italian 10-year note yield has decreased to 4.519% (-5.6-bps) while the Spanish 10-year note yield has decreased to 5.294% (-9.4-bps); lower yields imply higher prices.

RELATIVE PERFORMANCE (versus USD): 11:30 GMT

JPY: +1.15%

AUD: +0.53%

NZD: +0.50%

GBP:+0.20%

CHF:+0.15%

EUR:+0.06%

CAD:+0.02%

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): -0.48% (+0.53 % past 5-days)

ECONOMIC CALENDAR

Commentary_from_Japanese_Officials_Adds_Fuel_to_Technical_Turn_in_Yen_body_Picture_7.png, Forex: Commentary from Japanese Officials Adds Fuel to Technical Turn in Yen

See the DailyFX Economic Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators.

TECHNICAL ANALYSIS OUTLOOK

Commentary_from_Japanese_Officials_Adds_Fuel_to_Technical_Turn_in_Yen_body_Picture_6.png, Forex: Commentary from Japanese Officials Adds Fuel to Technical Turn in Yen

EURUSD: No change: “Consolidation occurring after overshoot towards 1.3700; with the daily RSI uptrend breaking, a pullback towards 1.3500 should not be ruled out. I maintain: with the daily RSI well into overbought territory, a pullback would be deemed healthy. Dips into 1.3500 are deemed constructive. Support is 1.3615/20 (weekly R2), 1.3540 (weekly R1), and 1.3500. Resistance is 1.3635/60 and 1.3755/85 (weekly R3, monthly R1).”

Commentary_from_Japanese_Officials_Adds_Fuel_to_Technical_Turn_in_Yen_body_Picture_5.png, Forex: Commentary from Japanese Officials Adds Fuel to Technical Turn in Yen

USDJPY: No change: “Further bullish price action as US Treasury yields strengthen and speculation over BoJ policy arises again. Resistance comes in at 92.00/05 (breaking now) (weekly R1), 93.15/20 (weekly R2), and 93.45/50 (monthly R3). Support comes in at 91.00 and 90.00/10 (weekly pivot, monthly R2).”

Commentary_from_Japanese_Officials_Adds_Fuel_to_Technical_Turn_in_Yen_body_Picture_4.png, Forex: Commentary from Japanese Officials Adds Fuel to Technical Turn in Yen

GBPUSD: The pair is holding below the 61.8% Fibonacci retracement from the June low to January high, vindicating the “cover on dips, sell rallies” perspective. I continue to look to sell rallies in the pair as significant RSI divergence exists. A hold below 1.5675 eyes a move towards 1.5500, and ultimately, 1.5265/70, the June low. Resistance comes in at 1.5825 and 1.5885/90. Support is 1.5675 and 1.5580 (monthly S1).

Commentary_from_Japanese_Officials_Adds_Fuel_to_Technical_Turn_in_Yen_body_Picture_3.png, Forex: Commentary from Japanese Officials Adds Fuel to Technical Turn in Yen

AUDUSD:A break below 1.0360 has given way to a move into the November swing low and 200-DMA at 1.0285/310, which could prove to be an area to look for a bounce. However, the daily RSI support dating back to June 2012 is breaking, suggesting that further downside should be sought. Resistance comes in at 1.0360 and 1.0425. Support is 1.0290 and 1.0150.

Commentary_from_Japanese_Officials_Adds_Fuel_to_Technical_Turn_in_Yen_body_Picture_2.png, Forex: Commentary from Japanese Officials Adds Fuel to Technical Turn in Yen

S&P 500: Tuesday I said: “as indicated on the charts the past weeks, noting “nearing the top 1505/1512” – the top was 1504.6. If this breaks, 1520 is in sight.” Indeed, the irrational exuberance has continued, bringing topline Bearish Rising Wedge resistance in focus at 1512/15; the December 2007 highs of 1520/24 could be reached on an overshoot. Bottom line: I’m expecting a crash in the S&P 500 unless volumes accelerate rapidly, given the disconnect from reality.

Commentary_from_Japanese_Officials_Adds_Fuel_to_Technical_Turn_in_Yen_body_Picture_1.png, Forex: Commentary from Japanese Officials Adds Fuel to Technical Turn in Yen

GOLD: The past few weeks I’ve maintained: "When considering the move off of the September highs, a measured A-B=C-D (as expressed on the Daily) suggests that a bottom could be in place at [1630/40].” The rebound has ensued, with the alternative safe haven rallying up to 1690 today. A daily close above 1700 points towards 1722/25 and 1755. Support is 1663 (200-EMA) and 1640/45.

--- 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, please fill out this form

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

DISCLOSURES

News & Analysis at your fingertips.