|Day's Range||0.009 - 0.009|
|52 Week Range||0.0087 - 0.0096|
Yahoo Finance's Jared Blikre joins Alexis Christoforous from the floor of the New York Stock Exchange to break down the latest market moves.
Primarily driving the price action early in the week was risk aversion with fears of Turkish contagion weighing on risky assets. Heading into the week-end, investors also appeared more optimistic that next week’s lower-level trade talks between China and the United States offer some hope that the two countries will find a way to head off a full-blown trade war. Australia’s jobs report missed expectations in July. The Dollar/Yen struggled all week to reverse its two-week decline, with lower Treasury yields and aversion to risk continuing to drive investors into the Japanese Yen.
The US dollar has been pretty mixed during the week against the Japanese yen, which makes perfect sense considering the dynamics at play in this currency pair. On one hand, you have a risk sensitivity in this pair, but at the other hand you have the US dollar being a bit too overbought.
US dollar strength has been seen all across the Forex world, with perhaps the lone exception being the Japanese yen. You can see that we fell during the day on Friday as well, reaching towards the ¥110.00 level, an area that I think is rather supportive.
The U.S. dollar looks listless on Friday, sliding against a handful of its major rivals but rallying against some emerging markets as investors assess the state of risk sentiment amid worries over further sanctions on Turkey.
The Euro rallied slightly higher during the Thursday’s session reaching towards the 1.14 level but due to the presence of strong resistance above, the market rolled over a bit. The British Pound initially tried to rally above the 1.12750 level in the yesterday’s session but failed in its attempt and rolled over. The AUD rallied during the yesterday’s session but later in the day sellers are seen getting involved pushing the price lower.
The US dollar has pulled back from initial gains during the day on Thursday, as we continue to see a lot of choppiness in Forex markets overall.
The market is likely to get a bounce from here but will not be a significant one as the negative sentiment still dominates the market. If the market breaks below the 1.27 level, then it will unwind rapidly towards its next psychologically important level, the 1.25 level.
Today’s price action will be dictated by investor aversion to risk. If demand for higher risk assets continues to increase then look for the USD/JPY to be underpinned. The news about the trade discussion between the U.S. and China is just a headline. However, investors seem to like it. There’s no guarantee that the trade discussions will end successfully, however, the news seems to have stopped the speculative selling for now.
The US dollar fell against the Japanese yen in a “risk off” move early on Wednesday, testing the ¥111.75 region as I record this. There is a bit of support underneath though, so the question now is whether or not the US dollar can stabilize?
Based on the early price action, the direction of the USD/JPY is likely to be determined by trader reaction to the 50% level at 111.126.
While break of 1.1510-1.1500 dragged the EURUSD to thirteen-month low, the 200-week SMA, at 1.1355 now, is likely offering an intermediate halt to the pair’s south-run towards the 1.1300-1.1280 horizontal-region. In case the quote refrains to respect the 1.1280 rest-point, the 1.1210 and the 1.1120 might entertain the sellers. Alternatively, the 1.1440-50 may restrict the pair’s immediate advances before highlighting the 1.1500-1.1510 support-turned-resistance. Given the buyers’ ability to surpass 1.1510 barrier, the 1.1565-70 and the 1. ...
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The pair continued to suffer in the Monday’s session initially lower at the open but reversed some of its momenta during the American session. The Euro had lost a significant part of its value in the last two trading sessions due to fears of contagion on European Banks from the economic crisis in Turkey. The negative sentiment prevailed in the market throughout the Monday’s session as the market is very concerned about the entire Turkey situation.
Based on the early trade, the direction of the USD/JPY on Tuesday is likely to be determined by trader reaction to the main 50% level at 110.662.
The US dollar initially gapped lower to kick off the week, as traders expressed their concern dealing with the Turkish situation. However, it seems as if things are calming down between Ankara and the United States, and this could give the markets reason enough to put more of a “risk on” face.
China posted weaker-than-expected economic numbers across the board in data just released. Fixed Income Investment came in at 5.5%, down from 6.0% and below a 6.0% forecast. Industrial Production was 6.0%, below the 6.3% estimate, but matching the previous month. Retail Sales fell to 8.8% from 9.0%, also coming in under the 9.2% forecast. Finally, the Unemployment Rate rose to 5.1% from 4.8%.
Based on last week’s price action and the close at 111.273, the direction of the USD/JPY this week is likely to be determined by trader reaction to the Fibonacci level at 110.859 and the 50% level at 110.662.
Economic data will take a backseat to renewed geopolitical tensions. If weakness in the Turkish Lira continues to drive contagion fears, money will flow into the safe-have Japanese Yen. According to reports, the European Central Bank (ECB) is concerned over the impact of a weak Turkish Lira on European banks. This may be the big story that Dollar/Yen investors will be watching this week.
The New Zealand Dollar closed sharply lower against the U.S. Dollar last week after the Reserve Bank unexpectedly committed to keep interest rates at record lows through to 2020 on disappointing economic activity. The Reserve Bank of Australia wasn’t as dovish as the RBNZ, nonetheless, the Australian Dollar weakened as the central bank showed no intention of raising rates over the near future. The Dollar/Yen was under pressure last week on trade tensions and on revelations the Bank of Japan is under pressure to move away from its accommodative policy. Geopolitical tensions in Turkey drove the Lira sharply lower, causing investors to dump higher-yielding currencies like the Euro, Australian and New Zealand Dollars. Money then flowed into the safe-haven U.S. Dollar and Japanese Yen.
On Friday, the U.S. Dollar Index spiked to its highest level since May 17, 2017 after the Euro plunged against the greenback to its lowest level in more than a year as a steep drop in the Turkish Lira sparked a massive flight-to-safety exodus into the dollar.
The US dollar has been very choppy against the Japanese yen during the week, hugging the ¥111 level. This is the wrong time of year to be looking for major moves, as most large traders are probably away at holiday. That being said, there are a lot of geopolitical issues going on at the same time so this pair could pick up rather quickly.
The US dollar fell against the Japanese yen during the day on Friday, as we have seen a general “risk off” trade overall. This of course is negative for this pair and going into the weekend I think far too many people were concerned about the trade war headlines to hold on to this trade.
With risk off today, the direction of the Dollar/Yen will be determined by the size of the buying moving into the Japanese Yen and the Dollar. Money is flowing into each currency for protection. Stock market weakness is fueling the carry trade which is pushing money out of stocks and into the Yen as investors pay back margin loans to Japanese banks.