March 18 (Bloomberg) — Trevor Williams, chief economist at Lloyds TSB Corporate Markets, talks about the effect of the Group of Seven intervention in the foreign exchange market for the first time in more than a decade. He speaks with Francine Lacqua on Bloomberg Television’s “On The Move.”
Fink Says BOJ Has More Work to Do to Stop Yen Volatility
March 18 (Bloomberg) — Naomi Fink, a Japan strategist at Jefferies & Co., discusses the Group of Seven’s agreement to jointly intervene in the foreign exchange market for the first time in more than a decade after Japan’s currency soared, threatening its recovery from the March 11 earthquake. She speaks with Linzie Janis on Bloomberg Television’s “Global Connection.”
Kotecha Says G-7’s Yen Action Draws `Line in the Sand’
March 18 (Bloomberg) — Mitul Kotecha, global head of foreign-exchange strategy at Credit Agricole CIB, discusses the Group of Seven’s agreement to jointly intervene in the foreign exchange market for the first time in more than a decade after Japan’s currency soared, threatening its recovery from the March 11 earthquake. Kotecha speaks with Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)
Aussie outlook daily & weekly
AUD/USD 18 March 2011
For much of this year the Aussie has been hovering around and bouncing off parity producing a very choppy market. Using late Decembers highs with early Januarys lows we can see a triangle pattern has formed on the pair. The market finally broke out of this 2 ½ month triangle to the low side earlier this week, also breaking though parity quite comfortably making new 2011 lows. We’re starting to pull back and would expect resistance to show itself at parity or the lower trend line of the triangle.
Although some distance away a break below November 2010 lows would suggest the bears are back in control of this market. It is more likely we see a pull back towards parity before any push lower.
Lower timeframes are showing little price action.
We can see the triangle pattern has also formed very well on the weekly charts supporting the daily chart outlook.
Yen Stabilizes After Intervention
Trading of the yen was significantly less volatile in the European trading session versus this morning as the price of the yen held relatively firm following a coordinated intervention by the G7 nations helped to stabilize the price of the yen.
At lunch time during the European trading session, the USD/JPY was trading lower with significantly less volatility at 81.44 after opening the day at 81.81.
Yesterday the yen received coordinated support from the G7 finance ministers in both words and in action as the United States, the United Kingdom, Canada, and the European Central Bank all pledged to support the yen on the open market. The joint effort to sell the yen via the central banks’ operation desks comes on the heels of the worst disaster in Japan since WWII.
Thursday the USD/JPY rose from 78.80 to a high of 81.98. This is in contrast to Wednesday’s low of 76.41 after speculators attacked the yen following a breach of the 80 yen level and a lack of a response by the Japanese government.
It remains to be seen if the intervention will have a significant impact on the yen given that the previous intervention by the Japanese Ministry of Finance on September 15th had only a short term impact on the value off the yen with the price of the USD/JPY rising 300 pips over three days before the pair resumed its sharp downtrend.
Traders should note that following yesterday’s intervention, the USD/JPY came off of its low for the day and rose 375 pips before beginning to decline once again.
Financial update following yen-intervention and UN resolution
Seniorstrategist Ib Fredslund Madsen comment on the two big newsstories friday: The joint G7 yen-interventiona and the UN agreed no flight zone over Lybia.
Video courtesy of en.jyskebank.tv
Forex Daily Market Commentary: Concerted intervention of JPY agreed
By GCI Forex Research
FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400)
USD
In a surprise development, the Fed, the ECB, the Bank of England, and the Bank of Canada agreed to engage in “concerted intervention” with the Bank of Japan “on March 18, 2011″. The communique explained that the decision to intervene was taken “in response to recent movements in the exchange rate of the yen associated with the tragic events in Japan”. The text also repeated the G7′s concern over “excess volatility and disorderly movements in exchange rates”. Speaking later, Japan Finance Minister Noda made it clear that the BoJ would be active in USDJPY, but he was not sure in which pairs the other banks would intervene. The yen weakened v sharply on the announcement, and USDJPY continued to grind higher during the Asia session. EURUSD traded 1.3981-1.4088, USDJPY 78.83-81.89. Elsewhere, WTI crude jumped about $2/bbl on news that the UN security council authorised a no-fly zone over Libya, and approved “all necessary measures” to protect Libyan civilians. US data offered some positives for the dollar, though market participants continue to largely overlook releases. Initial jobless claims fell as expected and continue to signal an improving labor market. CPI rose as expected while core was stronger. Our analysts noted that core CPI on a y/y basis should put pressure on the Fed to reconsider their assessment mentioned in the March 15 FOMC statement that “underlying” inflation is “subdued”, especially with a strengthening labor market.
EUR
The euro held onto its early-European session gains stemming from the strong Spanish bond auction. The Spanish bond auction was considered to be strong as the bid to cover ratio for the 10-year came in at 1.81x vs. 1.54x prior. Considering the state of the market the periphery bond market is faring quite well, but we believe the market is struggling to absorb all the event risk at this stage so price action may be delayed.
ECB President Trichet speaks in Frankfurt around 1600GMT and he may wish to address the decision to embark on a round of joint intervention. On the monetary policy front, given recent comments from the ECB’s Liikanen who still pointed to an April rate hike, we would not expect too much of a departure from the last time we heard Trichet speak.
CHF
The SNB kept its 3m LIBOR target unchanged at 0.25%, though we judge the SNB statement to be more dovish, which is negative for the franc. The longer-term trajectory of the inflation forecast was largely kept unchanged but even so, inflation is only expected to hit 2% in 2013 which is well beyond the necessities of short-term action. The SNB expressed particular concern about other global developments and its impact on Swiss markets, and this will likely remain the driving theme within the policymaking community.
SNB Chairman Hildebrand later said the strong Swiss franc remains a burden for the economy and could lead to a slowdown throughout the year through exports.
TECHNICAL OUTLOOK
EURUSD 1.4282 key resistance.
EURUSD BULLISH Rise above 1.4086 has exposed 1.4282 key high from Nov 4. Initial support lies at 1.3855.
USDJPY BEARISH Recovery targets 82.01 with scope for 82.45 next, while support is at 78.83 intraday low.
GBPUSD BEARISH Look for a break below 1.5964, which would confirm the bear trend and open the way to 1.5845. Near-term resistance lies at 1.6200.
USDCHF BEARISH The pair found support at 0.8852 ahead of 0.8795. Initial resistance is at 0.9198.
AUDUSD BEARISH As long as resistance at 0.9963 is intact, a break below 0.9706 would expose 0.9625.
USDCAD BULLISH While support at 0.9735 holds, look for gains towards 0.9974 and 1.0011/58 resistance area.
EURCHF BEARISH Bounce off through 1.2706 exposes 1.2854. Near-term support lies at 1.2571 ahead of 1.2433/02 support zone.
EURGBP BULLISH Focus is on 0.8787 Fibonacci level, break of this would expose 0.8818. Near-term support is at 0.8626.
EURJPY BEARISH Resistance at 116.00/68 area, while support is at 110.54 intraday low.
Forex Daily Market Commentary provided by GCI Financial Ltd.
GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.
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.
EUR/USD: Continues to traded above 1.4000 following robust US data
By GCI Forex Research
EURUSD MovementFor the 24 hours to 23:00GMT, EUR rose 0.66% against the USD and closed at 1.4013.
In the EU, construction output rose by 1.8% (M-o-M) in January following a 2.0% decline in December. In the US, consumer price index (CPI) rose to 0.5% (M-o-M) following a 0.4% increase in January. Additionally, the Philly Fed index rose to 43.4 in March, following a score of 35.9 posted in February.
In the Asian session, at 4:00GMT, the EURUSD is trading at 1.4070, 0.41% higher from the levels yesterday at 23:00GMT.
The pair has its first short term resistance at 1.4135, followed by the next resistance at 1.4201. The first support is at 1.3957, with the subsequent support at 1.3845.
With a series of EU economic releases today, including current account and trade balance, trading in the pair is expected to be influenced by the resulting cues from these releases.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Forex Daily Market Commentary provided by GCI Financial Ltd.
GCI Financial Ltd (”GCI”) is a regulated securities and commodities trading firm, specializing in online Foreign Exchange (”Forex”) brokerage. GCI executes billions of dollars per month in foreign exchange transactions alone. In addition to Forex, GCI is a primary market maker in Contracts for Difference (”CFDs”) on shares, indices and futures, and offers one of the fastest growing online CFD trading services. GCI has over 10,000 clients worldwide, including individual traders, institutions, and money managers. GCI provides an advanced, secure, and comprehensive online trading system. Client funds are insured and held in a separate customer account. In addition, GCI Financial Ltd maintains Net Capital in excess of minimum regulatory requirements.
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.
Crude Oil Trades near $103.50 Level
By Anton Eljwizat
Crude oil prices rose significantly yesterday and peaked at $103.63 per barrel. However, the 4-hour chart is suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Forex traders involved with commodities like this can take advantage of this knowledge by going short on crude oil now, and at a great entry price!
• Below is the 4-hour chart for crude oil by ForexYard.
• The technical indicators used are the Slow Stochastic, RSI and Williams Percent Range.
• Point 1: There is a “doji” candlestick formed in the chart, indicating that a reversal should take place.
• Point 2: The Slow Stochastic indicates a bearish cross, signaling that the next move may be in a downward direction.
• Point 3: The RSI signals that the price of this pair currently floats in the over-bought territory, suggesting downward pressure.
• Point 4: Williams Percent Range also supports the downward direction.
Crude Oil 4-Hour Chart
Forex Market Analysis provided by ForexYard.
© 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.
G7 Agrees To Intervene In Order To Weaken Yen
Source: ForexYard
The Group of seven industrial nations has agreed on Thursday evening to stage a coordinated currency intervention in order to weaken the Japanese currency. As a result, the yen fell about 150 pips vs. the U.S. dollar and about 350 pips vs. the euro and the British pound.
Economic News
USD – Dollar Falls versus Majors As Positive U.S. Data Spurs Demand for Higher-Yielding Assets
The U.S. dollar fell against most of its major currency counterparts during Thursday’s trading session. The dollar saw a 170 pip slide against the euro, and the EUR/USD pair reached as high as the 1.4050 level. The dollar also saw a 150 pips fall vs. the British pound.
The dollar depreciated yesterday after positive U.S. economic releases have boosted demand for higher-yielding assets, such as the euro and the pound. The Consumer Price Index (CPI) in the U.S. rose by 0.5 percent in February, and the core CPI went up by 0.2 percent. The cost of living in the U.S. climbed more than forecast due to the highest food prices since 2008 and rising fuel costs.
In addition, initial Unemployment Claims in the U.S. fell by 16,000 in the week ended in March 12th. Applications for jobless benefits have decreased for a third week in the last four, signaling progress in the labor market.
Nevertheless, during night-trading, the dollar saw a sharp appreciation against the Japanese yen after the G7 agreed to conduct a coordinated intervention to weaken the Japanese currency.
As for today, traders should focus on two main events that are likely to dominate the market – the Japanese struggle to fight nuclear catastrophe, and developments from Libya which might include U.N. intervention. Any update regarding these two nations is likely to have a rapid impact on the market.
EUR – Euro rallies Against Dollar and Yen
The euro rallied against the U.S. dollar and the Japanese yen on Thursday’s trading session. The euro gained about 170 pips vs. the dollar, and the EUR/USD pair reached as high as the 1.4050 level. The euro also soared against the yen as well, and the EUR/JPY pair is trading near the 114.00 level.
The euro’s strengthening yesterday was mostly affected by overseas developments. The euro gained against the U.S. dollar after reports have shown that the U.S. economy continues to recover. The U.S. Consumer Price Index rose by 0.5% in February, as food costs reached their highest level since 2008. In addition, initial unemployment claims in the U.S. fell by 16,000 last week, signaling that the labor market recovers as well. This has supported risk-appetite in the market, and as a result strengthened the euro vs. the dollar.
The euro climbed against the yen after the G7 said they had agreed to stage a coordinated currency intervention in order to weaken the surging Japanese currency.
Looking ahead to today, Traders are advised to follow the German Producer Price Index release, which is scheduled at 07:00 GMT. A positive data might to strengthen the euro further. Traders should also follow all the updates from Japan and Libya, as these are likely to have a large impact on the market for the near future.
JPY – G7 Agrees To Intervene In Order Weaken Yen
After soaring to a record high against the U.S. Dollar, the Japanese yen saw a sharp bearish correction during night-trading after G7 agrees to devaluate the Japanese currency.
The yen slid after the Group of seven nations said they had agreed to stage a coordinated currency intervention in the attempt to support the Japanese economy following the devastating earthquake and tsunami affects.
The yen saw a 150 pips fall against the yen and the USD/JPY pair climbed towards the 81.50 level. This move had an even bigger impact on the euro, as the EUR/JPY pair bounced by 350 pips towards the 114.50 level.
As for today, the Japanese nuclear crisis will continue to dominate global news. Traders are advised to follow any update from Japan, as it is likely to have an instant impact on the yen. Traders should also follow any further indications regarding an intervention by the G7 or the Bank of Japan.
Crude oil – Crude Oil Climbs to $103.50 a Barrel After U.N. Authorizes Military Action in Libya
Crude oil surged to $103.50 a barrel during Thursday night trading, after the United Nations have authorized a military strike to curb Libyan leader Muammar Gaddafy. The U.N. Security Council vote came several hours after Gaddafi threatened to storm Benghazi overnight.
As a result, crude prices, which were already surging, saw a sharp 200 pips gain, and crude climbed from $101.70 to $102.85 a barrel almost instantly. During the night crude oil prices continued to climb, and reached as high as $103.50 a barrel.
Looking ahead to today, traders should first and for most remain updated regarding any development in Libya. Traders should take under consideration that any update regarding a clash involving U.N. troops has potential to boost crude prices event further.
Technical News
EUR/USD
The EUR/USD pair continues to rise, and reached as high as the 1.4085 level yesterday. Currently as the 4-hour chart’s MACD continues to point upwards, the pair might see further bullishness, with potential to reach the 1.4120 level.
GBP/USD
The Cable has been seeing range-trading over the past few days, trading between the 1.5980 and the 1.6200 levels. The pair now seems on its way towards the higher boarder of the range. If manages to breach it, the pair has potential to reach as high as the 1.6350 level before the weekend.
USD/JPY
The USD/JPY saw a sharp bullish correction yesterday, following the G7 decision to devaluate the Japanese currency. A bullish cross on the 4-hour chart’s Slow Stochastic signals that the bullish move has more steam in it. Going long might be the right choice today.
USD/CHF
The USD/CHF is in the midst of a very strong bearish trend. In addition, as both the MACD and the RSI on the daily chart provide bearish signals, the pair looks to proceed with the bearish movement today. Going long might be the right strategy today.
The Wild Card
Crude Oil
Crude oil prices continue to surge in a daily basis, and by now have reached as high as the $103.50 level. Currently as all oscillators on the daily chart are providing bullish indications; it seems that another bullish movement might take place today. This might be a great opportunity for forex traders to join a very popular trend.
Forex Market Analysis provided by ForexYard.
© 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.
