Month: February 2010

By Fast Brokers – The USD/JPY is back on the rise as the Dollar appreciates across the board in reaction to a stronger than expected ADP Non-Farm Employment Change figure.  The outperformance of recent U.S. economic data has led investors towards the Dollar amidst economic uncertainties taking root across the globe.  The USD/JPY is benefitting in particularly since Japan’s recent economic data has left something to be desired.  Additionally, recalls at Toyota combined with the BoJ’s vocal determination to fight deflation has resulted inventors snapping up the Dollar against the Yen in light of economic improvements in the U.S.  Investors are currently awaiting U.S. Services PMI data due shortly.  Considering our analysis above, a positive Services PMI number could send the USD/JPY beyond previous February highs.  Meanwhile, both the BoE and ECB will make monetary policy decision tomorrow and the U.S. will release weekly Unemployment Claims data.  Hence, volatility could remain at a heightened level across the FX market, the USD/JPY included.

Technically speaking, the USD/JPY has multiple uptrend lines serving as technical cushions along with intraday and previous February lows.  As for the topside, the USD/JPY faces multiple downtrend lines along with 2/1 and 1/19 highs.  Meanwhile, the USD/JPY is fighting to create some topside separation between price and the psychological 90 level.

Present Price: 90.80

Resistances: 90.90, 91.07, 91.07, 91.24, 91.36, 91.47, 91.64

Supports: 90.69, 90.58, 90.46, 90.28, 90.12, 89.97

Psychological: 90, January highs and lows

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Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The Cable has come crashing down from the perches of its Asia trading session rally.  The risk trade rallied across the board after Australia’s trade Balance printed stronger than expected followed by an EU approval of Greece’s plan to reduce its outstanding fiscal debt.  However, gains were soon washed away after Britain’s Services PMI data point came in below analyst expectations.  UK data has been outperforming lately, making the pullback in services a shock for investors, and the Cable’s ensuing downturn reflected this mental state.   Services comprise a large part of the UK’s GDP, so weakness in services trumps strength in manufacturing. The Cable’s intraday decline accelerated after U.S. ADP Non-Farm Employment Change data printed stronger than analysts anticipated.  Strong U.S. employment numbers led investors to the Dollar as a safe haven due to the recent wave of positive U.S. economic data.  Meanwhile, investors are awaiting U.S Services PMI data.  An outperformance in U.S. services could paint a stark contrast between the U.S. and UK economies, enticing investors to favor the Dollar further.  The BoE and ECB will make monetary policy decisions tomorrow, meaning the Pound could remain very active over the next 24-48 hours.  Disregarding today’s services number, the recent wave of encouraging UK today may lead one to believe the BoE would tighten its monetary stance further.  However, debt issues in Greece and tightening in China could lead the BoE to err on the cautious side this time around.  Either way, the combination of events makes tomorrow’s BoE more interesting and a bit unpredictable.

Technically speaking, the Cable has multiple uptrend lines serving as technical cushions along with intraday and 2/2 lows.  As for the topside, the Cable still faces multiple downtrend lines along with intraday and 1/29 highs.  Furthermore, the psychological 1.60 area could serve as a technical barrier should it be retested.

Present Price: 1.5948

Resistances: 1.5961, 1.5975, 1.5992, 1.6005, 1.6015, 1.6024

Supports: 1.5937, 1.5921, 1.5900, 1.5876, 1.5863

Psychological: 1.60,  December and October lows

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Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Fast Brokers – The EUR/USD staged a solid rally over the past 24 hours as investors returned to the risk trade with the lack of negative psychological forces.  The EU later fed the rally by announcing it is backing Greece’s plan to get its fiscal house in order.  However, it remains to be seen whether this is a sign of concrete support or a political move to give the Euro some psychological support.  The risk trade has made a direct u-turn during the U.S. trading session after the headline U.S. ADP Non-Farm Employment Change number printed stronger than analyst expectations.  In fact, the barometer almost registered jobs growth.  On the downside, the ADP data revealed that announced layoffs increased significantly, taking a bit of the optimism out of the number.  Either way, this data point has proven to be Dollar positive.  Encouraging jobs data along with recent positive data releases has made the Dollar an ideal safe haven amidst global economic uncertainty.  Furthermore, the fact that EU headline Retail Sales data printed 5 basis points below analyst expectations didn’t help matters either.  Meanwhile, investors are awaiting America’s Services PMI data due shortly.  An outperformance in Services data could give the Dollar another boost, whereas a negative could strengthen the EUR/USD from intraday lows.  Activity should remain at a heightened state over the next 24 hours with the ECB and BoE making monetary policy decision on Thursday.  It’s difficult to imagine the ECB will tighten liquidity considering the debt issues in Greece combined with recent underwhelming data.  However, central bank statements usually move markets so investors should keep a sharp eye on behavior in the major Dollar crosses.

Technically speaking, the EUR/USD faces topside technical barriers in the form of multiple downtrend lines along with intraday, 1/29, and 1/28 highs.  Furthermore, the psychological 1.40 level could serve as a technical barrier should it be retested.  As for the downside, the EUR/USD has multiple uptrend line serving as technical cushions along with previous January lows.  The EUR/USD has more uptrend lines waiting in the distance, although they are sitting off screen at the moment.  Our 1st and 2nd tier uptrend lines could carry some weight since they run through April 2009 lows.  That being said, a failure of our 1st tier could send a fairly negative signal considering April 2009 lows are around the 1.30.

Present Price: 1.3944

Resistances: 1.3974, 1.3999, 1.4026, 1.4056, 1.4101, 1.4136

Supports:  1.3931, 1.3906, 1.3878, 1.3857, 1.3833, 1.3806, 1.3782

Psychological: 1.40, January lows

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Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.

By Anton Eljwizat – Last week’s bullish movement of the USD/DKK cross hasn’t received much support as of late. Below I will demonstrate that the USD/DKK pair has already commenced a downward trend for today, and the cross may tumble another 200-300 pips in the coming 2 days. Traders are strongly advised to take advantage of the trend at an early stage. Therefore, why not open short positions at this most recent price?

• The technical indicators that are used are the Relative Strength Index (RSI), Stochastic Slow and MACD.

• Point 1: The Relative Strength Index (RSI) indicates that the price of this cross currently floats in the overbought territory, signaling downward pressure.

• Point 2: : The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.

• Point 3: The MACD indicates an impending bearish cross, which may signal a downward movement is going to occur in the near future.

USD/DKK Daily Chart

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Source: ForexYard

Australia surprised economists by holding interest rates steady after the market unanimously predicted an interest rate hike. Also a chain of positive news has helped spot crude oil prices jump over 5.5% during the past two days.

Economic News

USD – Pending Home Sales Hurt the Dollar

The dollar fell today versus the EUR as worries were reduced over Greece’s ability to repay its sovereign debt. However, trading ranges were tight as investors were hesitant to open such large positions prior to the release of the U.S. Non-Farm Payrolls report on Friday.

The EUR/USD rose to a closing price to day of 1.3965 after opening the day at 1.3914. The GBP/USD also rose to 1.5972 from 1.5929, while the USD/JPY fell to 90.36 from 90.76.

The USD gave back some territory today against the majors after its recent rally. Some of the appreciation of the EUR/USD may have been caused by traders taking profits from the recent decline in the pair.

U.S. economic data was positive today after the release of better than expected monthly pending home sales. The economic indicator posted an increase of 1% after economists predicted a climb of only 0.4%.

Today traders will be following the release of the ADP Non-Farm Employment Change along with the ISM Non-Manufacturing PMI. The ADP report has been known to show a correlation with Friday’s all important Non-Farm Payrolls Report and can significantly move the market. The ISM survey gives a feel for how businesses view the American economy. Better than expected releases for these indicators could send the EUR/USD back to its next support level of 1.3830.

EUR – Greek Debt Fears Subside

Greece’s budget crisis has been driving trading for the EUR, but this issue may be put to rest tomorrow when the European Commission on Greece’s plan to reduce the government budget deficit meets today. The EUR was supported today as the spread on Greek government bonds tightened from their high last week. Larger spreads in government bonds are viewed as a poor signal of financial stability and increased risk in holding the debentures. Greece currently has a budget gap close to 13% of its 2009 GDP. The European Union mandates budget deficits up to 3% of GDP.

A news heavy week promises to create volatility for the major pairs of the EUR. The strengthening the EUR experienced today may not continue throughout the week. On Thursday the European Central Bank will publish its minimum bid rate along with the accompanying announcement explaining the central bank’s position on the European economy. The market is not expecting the central bank to show a significant improvement to the European economy. This could weigh on the EUR during this week’s trading.

JPY – Australian Interest Rate Held Steady, Shocking the Market

The Australian central bank caught the market off guard yesterday with an unexpected decision to keep interest rates steady. Economists predicted the Australian interest rate would rise 0.25 basis points to 4.00%. Instead rates will remain for the time being at 3.75%. The decision to keep rates unchanged may allow the Australian economy to grow faster. However, keeping interest rates lower may also bring about unwanted inflation.

The surprise move was a positive for the AUD/USD as the pair climbed to a high of 0.8881 from an opening day price of 0.8801. The currency pair rallied 28% last year as the Australian central bank raised interest rates 3 times in the previous year. The rising Aussie dollar has weighed on the earnings of many Australian exporters. A stronger currency makes an exporter’s goods more expensive in the local currency.

The next policy meeting for the central bank is scheduled for March 2nd. There the central bank is again forecasted to raise interest rates to 4.00%. Traders should be cautious as trading on Australian interest rate moves has proven to be unpredictable.

Crude Oil – Crude Prices Jump on Positive USD Data

Spot crude oil prices rallied to a two-week high after the release of better than expected U.S. pending home sales. Prices jumped after the data release was seen by traders as an opportunity to buy crude after the positive economic data spurred the potential for higher future crude oil demand.

Crude oil prices rose today to $76.82 from an opening price of $74.68. Over the last two days the price of spot crude oil has jumped 5.5%.

The Pending Home Sales release is just one in a string of positive U.S. economic releases. Both last Friday’s GDP and Monday’s manufacturing data were better than expected, leading some spot crude oil traders to believe that future demand may begin to rise with economic improvement

Today traders will be focused on this week’s crude oil inventory data from the U.S. Energy Information Administration. Oil inventories are expected to rise by a meager 0.4M barrels. A data release below this level could help push crude oil prices up further, perhaps to the resistance line of $79.

Technical News

EUR/USD

The Relative Strength Index (RSI) on the daily chart indicates that this currency pair is currently in oversold territory, indicating that a bullish trend may be on the horizon. Still, most other indicators put the pair in neutral territory, meaning that traders may want to take a wait and see approach for the pair today.

GBP/USD

The Stochastic Slow on the 4-hour chart indicates that the pair is approaching overbought territory. This sentiment is confirmed by the Relative Strength Index (RSI) on the 2-hour chart, indicating a bearish trend could occur today. Traders are advised to go short with tight stops today.

USD/JPY

The Relative Strength Index (RSI) and Stochastic Slow on both the daily and hourly charts indicate that the pair is currently trading in neutral territory. Traders may want to take a wait and see approach today, as it is not yet known what direction the pair could take.

USD/CHF

The Relative Strength Index (RSI) on the daily chart indicates that the pair is currently in overbought territory. Usually this means that a downward correction is imminent, although most of the other technical indicators show the pair in neutral territory. Traders may want to wait for a clearer picture to emerge before making any major decisions.

The Wild Card

GBP/CHF

The Relative Strength Index (RSI) on the 1-hour chart indicates that the pair is currently in overbought territory. This theory is supported by the Stochastic Slow, also on the 1-hour chart. Based on this information, forex traders may want to go short with tight stops today, as the pair may see a downward correction.

Forex Market Analysis provided by Forex Yard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

The U.S markets raced forward yesterday after a mixed start, as economic data and an oversold correction, encouraged investors back into stocks. Pending home sales was the driver of the session, hitting analyst’s expectations of 1%. This was following last month’s drop of -16.4% after surging for months, as buyers rushed to take advantage of an $8000 tax credit for first time buyers.

Healthcare and Industrials helped to pull the markets higher, both closing with gains of 2.07% and 1.91%, respectively. In addition, Crude oil helped the intraday momentum as it jumped by nearly 4%. The black gold finished the session above its 50 day moving average after dropping throughout the month of January.

From a technical point of view, the broader market (S&P500) is trading below major resistance and its 50 day moving average. When observing the chart below, one can see that the index has now entered back into a prior consolidation area, with strong resistance ahead.

Forex

On the Forex market the Dollar index dropped lower and finished the session with a -0.21% loss. To date, the Dollar is trading within a bullish trend, but has started to present a technical correction. Even though during the start of a new cycle, the Dollar index will often trade correlated to equities, odd bullish days will tend to have a negative effect on the U.S Dollar, as investors seek riskier assets. On the chart below, the Fibonacci retracement levels have been plotted.

On individual pairs the GBP/USD bounced off major support after the U.K’s nationwide consumer confidence and the construction PMI both came out better than expected. The PMI result which measures the activity level of purchasing managers in the construction industry came close to its 50 middle mark, at 48.6. Even though the number is still below levels which indicate expansion, the figure was better than the expected 48.2.

The latest data from the Nationwide Building Society showed yesterday that confidence among savers and consumers increased during 2009. After starting at an all time low, the confidence figure slowly improved throughout the year and is now at 76 points, up 32 points on the year.

The GBP/USD presented an interesting turnaround session after forming a reversal candlestick. Technically, the GBP is now trading on support, below minor trend line resistance. A break of either two lines could lead this pair into a new trend.

The Day Ahead

Volatility should pick up over the next three trading days as the ECB and BOE are expected to release their rate decisions, while the U.S is scheduled to release employment data. The U.S will start off today and release their ADP result. This event is widely watched by investors as it is expected to give a clue as to the NFP result scheduled on Friday. Economists are expecting a -40.00k, compared to last month’s -84.00k.

Daily Forex Market Analysis provided by eToro

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.

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USDCHF is in uptrend from 1.0132 and the fall from 1.0640 is treated as consolidation of uptrend. Support is now located at the lower border of the rising price channel on 4-hour chart. As long as the channel support holds, we’d expect uptrend to resume and one more rise towards 1.0800 is still possible after consolidation.

Daily Forex Forecast

By GCI Forex Research

Fundamental Outlook at 1500 GMT (EDT + 0500)

€

The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3965 level and was supported around the $1.3885 level.  The common currency gained some ground on news the European Commission will support Greece’s deficit-reduction program that will be published tomorrow.  Greece’s budget deficit was 12.7% of GDP last year and is struggling to convince the markets it can bring that down to 3% by 2012.  Greek debt is now trading at a massive 400bps premium at the ten-year level over German bunds, the highest level since 1998.  Most traders expect the European Central Bank will keep monetary policy unchanged on Thursday.  Data released in the eurozone today saw EMU-16 producer price inflation up 0.1% m/m and off 2.9% y/y.  Also, January PMI construction improved to 48.6 from 47.1 and German December retail sales were up 0.8% m/m and off 2.5% y/y.  Some dealers were spooked into selling the euro last night after Reserve Bank of Australia surprised the markets by not raising interest rates last night on the premise that higher-yielding currencies like the Australian dollar could be weaker.  ECB member Weber today said fiscal consolidation is the “main challenge” in 2010 and said he expects a “slight” worsening of the German labour market in 2010.  He also said Germany will not experience a recovery before 2011 and added the economic recovery in 2010 increasingly depends on exports.  In U.S. news, traders will pay close attention to testimony today from former Fed Chairman Volcker who will indicate hedge funds and private equity funds should be allowed to profit and fail.  Volcker is also a proponent of limiting the size of banks so that none are “too big to fail” and create unmanageable systemic risk.  Data released in the U.S. today saw December pending home sales print as expected at 1.0% m/m and up 10.5% y/y.  Tomorrow’s data will include MBA mortgage applications, January Challenge job cuts, and January ISM non-manufacturing data.  The big news this week will be Friday’s January non-farm payrolls data.  Some dealers believe the U.S. jobs report will show some improvement following a bit of an economic bounce the economy received at the end of Q4 2009.  Treasury Secretary Geithner today reported small banks “remain under enormous pressure” and said the proposed additional fee on banks will not impact lending.  Euro bids are cited around the US$ 1.3740 level.

¥/ CNY

The yen appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥90.25 level and was capped around the ¥90.90 level.  Finance minister Kan urged Bank of Japan to continue implementing “appropriate and flexible policies” and work closely with the government to combat deflation.  BoJ Governor Shirakawa last week reported it is a “critical challenge” to root out deflation but said this week that a lack of final private demand is the “root cause of deflation” and there is no “magic wand” to lift prices.  Kan also said “it is possible that the yuan will be one of the agenda items. I will discuss it on the understanding that stable growth in China is desirable for Japan.”  Notably, bids fell short of the BoJ’s offer today in its open market operation as part of the central bank’s lending program announced in December.  Prime Minister Hatoyama said the budget environment in 2011 will remain “severe.” Bank of Japan Chief Economist Momma yesterday reported “the risk that the Japanese economy will fall off from a cliff is small, but there is still a long way to go.  Even if the global economy continues to recover, the spread of that to capital spending and the labour market will be limited.”  Momma also indicated capital spending will not indicate signs of a rebound until the fiscal year beginning in April 2011 and said the labour market will also remain weak.  The Nikkei 225 stock index gained 1.63% to close at ¥10,371.09.  U.S. dollar offers are cited around the ¥94.75 level.  The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥125.80 level and was capped around the ¥126.80 level.  The British pound moved lower vis-à-vis the yen as sterling tested bids around the ¥143.85 level while the Swiss franc moved lower vis-à-vis the yen and tested bids around the ¥85.45 level. In Chinese news, the U.S. dollar depreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8271 in the over-the-counter market, down from CNY 6.8275.  A rumour circulated through the market last night that China will permit the yuan to appreciate after July. People’s Bank of China adviser Fan Gang yesterday reported China’s “real worry” remains asset bubbles that could emerge as China’s economy emerges from a crisis period into a “boom time.”  Fan also noted moves by PBoC to reduce liquidity last month were “timely and necessary.”

₤

The British pound moved higher vis-à-vis the U.S. dollar today as cable tested offers around the US$ 1.5995 level and was supported around the $1.5900 figure level.  The big question facing traders is whether Bank of England’s Monetary Policy Committee will scale back, pause, or extend its bond purchase program when its monetary policy announcement is made on Thursday.  The opposition Tory party, appearing poised to assume the top government slot in H1 2010, today reported it would keep the BoE’s inflation target at 2.0% if they assume power and control of the government.  Many data were released in the U.K. yesterday. First, January manufacturing PMI improved to 56.7 from 54.6, a fifteen-year high.  Second, December mortgage approvals decreased to 59,020.  Third, net lending to individuals rose by ₤1.2 billion in December.  Fourth, Hometrack January house prices were up +0.1%.  Cable bids are cited around the US$ 1.5720 level.  The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.8760 level and was supported around the ₤0.8710 level.

CHF

The Swiss franc appreciated vis-à-vis the U.S. dollar today as the greenback tested bids around the CHF 1.0540 level and was capped around the CHF 1.0605 level.  There was talk in the European session that Swiss National Bank lifted the euro/ Swiss franc cross to keep a lid on the Swiss franc.  Data released in Switzerland today saw the SECO consumer climate indicator improve to -7 from -14.  The media this week reported Swiss National Bank is unlikely to abandon its policy to keep a lid on the Swiss franc even though the domestic economy continues to improve.  U.S. dollar offers are cited around the CHF 1.0760 level.  The euro moved higher vis-à-vis the Swiss franc as the single currency tested offers around the CHF 1.4740 level while the British pound moved lower vis-à-vis the Swiss franc and tested bids around the CHF 1.6800 figure.

Forex Daily Market Commentary provided by GCI Financial Ltd.

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DISCLAIMER: GCI’s Daily Market Commentary is provided for informational purposes only. The information contained in these reports is gathered from reputable news sources and is not intended to be U.S.ed as investment advice. GCI assumes no responsibility or liability from gains or losses incurred by the information herein contained.

By CountingPips.com

U.S. Pending Homes sales edged up in the month of December following a deep decline in November according to the monthly report released by the National Association of Realtors (NAR) today. The NAR report showed that pending home sales contracts signed by buyers rose by 1.0 percent in December following November’s 16.4 percent decrease. On an annual basis, pending home sales were 10.9 percent above the December 2008 sales level. December’s sales rise matched the market forecasts that were expecting an approximate 1.0 percent increase.

NAR chief economist Lawrence Yun commented on recent pending home sales levels saying, “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” he said. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”

Pending home sales in the Northeast increased by 2.3 percent in December while the Midwest saw an increase by 5.2 percent and sales in the South advanced by 2.2 percent. Sales in the West decreased by 3.8 percent for the month.

On an annual basis, all four areas were above the December 2008 sales level with the Northeast showing an annual gain of 14.9 percent, the Midwest showing a 8.7 percent annual rise, the South showing a 5.5 percent increase and the West showing a 18.6 percent annual advancement.

US Dollar trades lower in forex trading, Stocks rise

The US Dollar has been trading lower versus most of the major currencies today as the U.S. stock markets have advanced. The USD has been declining versus the euro, British pound, Japanese yen, Canadian dollar, Swiss franc and the New Zealand dollar as of 1:24 pm EST in the U.S. session. The American currency has held gains made versus the Australian dollar which declined sharply after the Reserve Bank of Australia surprised the markets and held its interest rate steady earlier today.

The US stock markets, meanwhile, have traded higher today with the Dow Jones advancing by over 80 points, the Nasdaq increasing over 10 points and the S&P 500 up by close to 10 points at the time of writing.  Oil has climbed higher by $2.41 to trade at $76.84 while gold has gained by $12.20 to trade at the $1,116.50 per ounce level.

USD/CAD 4-Hour Chart – The US Dollar is losing ground today versus the Canadian Dollar by approximately 30 pips in forex trading. The USD/CAD pair has fallen below the 1.0600 level today as this pair has broken out to the downside of the rising price channel on the 4-hour chart that gained steam on January 19th.  The uptrend culminated with a high of 1.0721 in yesterday’s trading and marked its highest level since December 17th.

By Fast Brokers – The USD/JPY is trading off of intraday highs after rallying in light of the RBA keeping its benchmark rate unchanged.  The RBA’s decision led to risk aversion, benefitting the USD/JPY.  Additionally, Japan’s Average Cash Earnings data printed much weaker than analyst expectations, leading investors to favor the Dollar over the Yen in light of recent impressive U.S. economic data.  However, the USD/JPY is drifting back towards its psychological 90 level as analysts await U.S. Pending Home Sales.  The USD/JPY’s behavior has been a bit unpredictable as of late considering the market turmoil taking place around the globe.  Meanwhile, it seems the BoJ’s commitment to a loose monetary policy coupled with strong U.S. economic data has resulted in an upward momentum in the USD/JPY.  This momentum could be tested soon considering the U.S. will also release Services PMI and ADP Non-Farm Employment Change data tomorrow.  Should U.S. data releases disappoint, this would likely drive the USD/JPY lower, and vice versa.

Technically speaking, the USD/JPY has multiple uptrend lines serving as technical cushions along with 1/28 and 1/22 lows.  As for the topside, the USD/JPY faces multiple downtrend lines along with 1/29 and 1/20 highs.  Furthermore, the .90 area could continue to have a psychological influence on the USD/JPY over the near-term.

Present Price: 90.33

Resistances: 90.46, 90.56, 90.69, 90.90, 91.04, 91.24

Supports: 90.22, 90.08, 89.97, 89.77, 89.58, 89.36

Psychological: 90, January highs and lows

Market Commentary provided by Fast Brokers.

Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.

Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.