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Forex Daily News: Japanese Try to Rein in Yen

Written by UFXBank Research Team
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USD Dollar (USD) – The dollar slumped across the board in Forex Trading, as risk appetite and positive macro data led the market by fueling some optimism. Core Retail Sales came out at 0.6%, better than the expected 0.3% and Retail Sales came out at 0.4%, better than the expected 0.3%. The Stock Markets in the U.S. closed almost unchanged with the Dow Jones losing -017% and NASDAQ adding 0.18%, this occurring despite the surge in currencies markets. Crude Oil jumped to $78, but failed to hold there and fell by -0.5%, closing at $76.80 a barrel. Gold (XAU) traded on a new historical high, reaching the $1275 area, but closed at $1268 an ounce. Today, the NY Empire State Manufacturing Index is expected at 5 vs. 7.1 previously. The Import Price Index is expected unchanged at 0.2%, and the Industrial Production report is expected at 0.3% vs. 1% previously.

EURO (EUR) – The euro soared versus the dollar, reaching a 5 week high despite the negative macro data. The German ZEW Economic Sentiment came out at -4.3, worse than the expected 11.3, and Industrial Production came out at 0%, worse than an expected 0.2%. Holding above the support level of 1.2940 keeps the momentum positive for the pair. Overall, EUR/USD traded with a low of 1.2828 and with a high of 1.3032. Today, the CPI is expected unchanged at 1.6% and the Core CPI is expected at 0.9% vs. 1% previously.

EUR/USD – Last: 1.2969

Resistance

1.3025

Support

1.2950

1.29

1.2830

 

British Pound (GBP) – The Pound has gained versus the dollar as it finally breached the 1.5485 resistance level it was capped by. The CPI came out at 3.1%, better than an expected 2.9%, and the Core CPI came out at 2.8%, better than an expected 2.6%. Holding above the support level of 1.5430, keeps the momentum positive for the pair. Overall, GBP/USD traded with a low of 1.5347 and with a high of 1.5585. Today, the Claimant Count Change is expected at -5.1K vs. -3.8k previously. Also, BoE Gov Mervyn King will be speaking later today.

GBP/USD - Last: 1.5487

Resistance

1.5530

1.5580

 

Support

1.5475

1.5430

 

 

Japanese Yen (JPY) – The Yen gained against the dollar as the pair broke the 83.30 support level and reached a fresh 15 year low on speculation that the FED will keep buying treasury securities to sustain economic growth. Later on, however, announcements that the Japanese government would intervene on behalf of the Yen, turned the market momentum, and fueled pairs trading against the Yen by almost 200 pips. Holding above the support level of 83.80 turns the momentum to positive for the pair, as oversold conditions are seen here. Overall, USD/JPY traded with a low of 82.86 and with a high of 84.57. Today, the Tertiary Industry Index is expected at 0.7% vs. -0.1% previously.

USD/JPY-Last: 84.99

Resistance

85.30

Support

84.40

84.00

83.60

 

Canadian dollar (CAD) – Canada's dollar gained versus the U.S. dollar reaching the 1.02 area on speculations that BoC will continue to raise interest rates, but failed to sustain gains and jumped up to 1.03 areas. The Labor Productivity came out at -0.8%, worse than the expected -0.5%. Holding below the 1.0340 resistance area keeps the momentum negative for the pair. Overall, USD/CAD traded with a low of 1.0214 and with a high of 1.0304. Today, Manufacturing Sales are expected unchanged at 0.1%.

USD/CAD - Last: 1.0314

Resistance

1.0340

1.0400

Support

1.0220