{"id":13083,"date":"2010-09-16T07:53:35","date_gmt":"2010-09-16T11:53:35","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=13083"},"modified":"2010-09-16T07:53:35","modified_gmt":"2010-09-16T11:53:35","slug":"rare-japanese-intervention-in-yen-trading-manages-to-halt-yens-bullish-trend","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/09\/16\/rare-japanese-intervention-in-yen-trading-manages-to-halt-yens-bullish-trend\/","title":{"rendered":"Rare Japanese Intervention in Yen Trading Manages to Halt Yen’s Bullish Trend"},"content":{"rendered":"

Source: ForexYard<\/a><\/strong><\/em><\/strong><\/span><\/p>\n

The most significant economic event yesterday was beyond any doubt Japan’s \u200econfirmation of a unilateral intervention in yen trading in order to put a stop to the \u200esoaring currency. The consequences were seen immediately and the yen saw its \u200ebiggest daily loss in 22 months. Unusual trading is expected today as well. \u200e<\/p>\n

Economic News<\/h2>\n

USD – Dollar Sees Mixed Results Vs. The Majors<\/h3>\n

The U.S. dollar saw mixed results against most of the major currencies during \u200eyesterday’s session. The dollar fell about 80 pips vs. the British pound, causing the \u200eGBP\/USD pair to reach the 1.5650 level. The dollar also saw an irregular 250 pips gain \u200eagainst the Japanese yen, following the recent 15-year low the USD\/JPY pair hit \u200eearlier this week. The dollar did not show a clear trend against the euro.\u200e<\/p>\n

The dollar was boosted against the yen yesterday following Japan’s decision to \u200eactively intervene in devaluing the national currency. It was only a couple of days ago \u200ethe yen reached a 15-year high against the dollar. This in turn caused the bank of \u200eJapan to unexpectedly buy dollars in order to halt the soaring yen. As a result the JPY \u200esharply fell against all the major currencies, including the greenback. \u200e<\/p>\n

Against the rest of the major currencies the dollar failed to see similar results \u200efollowing disappointing U.S. economic releases. The Empire State Manufacturing \u200eIndex showed that manufacturing in the New York region expanded at a slower pace \u200ethan forecast in September. In addition, the Industrial Production report showed that \u200etotal value of output produced by manufacturers rose by 0.2% in August. Analysts \u200ehad originally predicted the figure to come in at 0.3%. As a result, the dollar dropped \u200eslightly against the euro and pound.\u200e<\/p>\n

As for today, a batch of data is expected from the U.S. economy. The most significant \u200ereleases are likely to be the Producer Price Index, the weekly Unemployment Claims \u200eand the Philadelphia Manufacturing Index. Each one of these publications is likely to \u200ehave a large impact on USD trading. \u200e<\/p>\n

EUR – Euro Slips Against the Pound; Soars Vs. The Yen<\/h3>\n

The euro saw a volatile session during trading yesterday. The currency mainly saw ups \u200eand downs vs. the U.S. dollar, without marking a clear direction. Against the British \u200epound the euro fell about 100 pips. On the other hand, it gained over 350 pips against \u200ethe Japanese yen.\u200e<\/p>\n

The euro fell against the pound yesterday following the European Consumer Price \u200eIndex figure for August. The report showed that the euro-zone’s annual inflation rate \u200eeased to 1.6% from 1.7% in July, indicating that the European Central Bank has \u200eenough room to maintain its loose monetary policy, and to keep interest rates at a \u200erecord low of 1.00%. Investors interpreted this as an opportunity to open short \u200epositions against the euro, especially against high yielding assets, such as the pound.\u200e
\nNevertheless, the euro saw an extraordinary bullish move against the yen. The yen fell \u200eagainst all the major currencies due to the Japanese government’s intervention in JPY \u200etrading. \u200e<\/p>\n

Looking ahead to today, the most significant economic release from the euro-zone \u200eseems to be the European Trade Balance figure. Trade balance measures the difference \u200ein value between imported and exported goods and services over the previous month. \u200eA positive figure might support the euro.\u200e<\/p>\n

JPY – Yen Free-falls Following BoJ Intervention in Yen Trading<\/h3>\n

The yen tumbled against all the major currencies yesterday. It slipped about 250 pips \u200eagainst the dollar, causing the USD\/JPY pair to rise from a 15-year low to the 85.50 \u200elevel. The yen also lost about 350 pips against the euro and about 500 pips against the \u200eBritish pound.\u200e<\/p>\n

The JPY saw its largest daily loss in 22 months after Japan’s Finance Minister \u200eYoshihiko Noda said the Bank of Japan actively devalued the currency. This was the \u200efirst time since 2004 that the Japanese leadership decided to intervene in the forex<\/a> \u200emarket. The decision came after the yen saw a 15-year high against the dollar. The fear \u200ewas that the strong yen would damage Japan’s export industry. \u200e<\/p>\n

As for today, the yen is likely to remain the most volatile currency of all the majors. \u200eTraders are advised to look for notifications regarding the BoJ’s actions in the market, \u200eand take under consideration that if the Japanese leadership will continue to intervene, \u200ethe yen may see another bearish session.\u200e<\/p>\n

OIL – Crude Oil Falls For the 3rd Day to $74.70 a Barrel<\/h3>\n

Crude oil fell to a session low of $74.70 a barrel yesterday. After starting out at \u200earound $76.50 a barrel, oil saw a sharp drop before correcting some of its losses to end \u200ethe day around $75.50 a barrel.\u200e<\/p>\n

Crude fell yesterday after U.S. regulators agreed to a Friday Restart of Enbridge’s \u200ebiggest pipeline from Canada, restoring crude supplies to Midwest refineries. In \u200eaddition, reports showed that demand for gasoline in the U.S, the world’s largest oil \u200econsumer, fell by 2.6% lately. The combination of bigger supplies and lower demand \u200etypically lead to a drop in prices.\u200e<\/p>\n

Looking ahead to today, traders are advised to follow the leading economic \u200epublications, especially from the U.S. and the euro-zone, as they tend to have a large \u200eimpact on crude oil trading. Traders should keep in mind that positive results are likely \u200eto support crude oil prices.\u200e<\/p>\n

Technical News<\/h2>\n

EUR\/USD<\/h3>\n

The bullish trend is losing its steam and the pair seems to be consolidating around the \u200e\u200e1.2990 level. There is a bearish cross forming on the 4-hour Slow Stochastic, \u200eindicating a bearish correction might take place in the nearest future. When the \u200edownward breach occurs, going short with tight stops appears to be the preferable \u200estrategy<\/p>\n

GBP\/USD<\/h3>\n

The daily chart is showing mixed signals with its RSI fluctuating in neutral territory. \u200eHowever, the 4-hour chart’s RSI is already floating in the over-sold territory \u200esuggesting that the recent downward trend is losing steam and a bullish correction is \u200eimpending. Going long with tight stops might be the right strategy today.\u200e<\/p>\n

USD\/JPY<\/h3>\n

The volatility this pair has seen recently has created a number of contradictory signals. \u200eThe hourly chart shows a bullish cross on the Slow Stochastic, indicating an upward \u200emovement may be coming. Contrary to this is the bearish cross on the 4-hour chart, \u200esignaling an impending upward movement. Waiting for a clear signal might be wise \u200etoday. \u200e<\/p>\n

USD\/CHF<\/h3>\n

The pair has been range-trading for a while now, with no specific direction. The Daily \u200echart’s Slow Stochastic providing us with mixed signals. The 4 hour charts do not \u200eprovide a clear direction as well. Waiting for a clearer sign on the hourlies chart might \u200ebe a good strategy today.\u200e<\/p>\n

The Wild Card<\/h2>\n

CAD\/CHF<\/h3>\n

This pair has been trading very flat these past few weeks, but has now begun to show \u200esigns of life. The MACD on the hourly and 4-hour chart shows clear bullish crosses, \u200esignaling an impending bullish move. The daily chart also has a bullish cross on the \u200eSlow Stochastic, which supports this notion. Forex traders can join this upcoming \u200etrend by entering early buy positions and riding the upcoming spike for profits this \u200eweek. \u200e<\/p>\n

Forex <\/strong>Market Analysis provided by ForexYard.<\/a><\/strong><\/em><\/p>\n

\u00a9 2006 by FxYard Ltd<\/p>\n

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.<\/p>\n","protected":false},"excerpt":{"rendered":"

By ForexYard – The most significant economic event yesterday was beyond any doubt Japan’s \u200econfirmation of a unilateral intervention in yen trading in order to put a stop to the \u200esoaring currency…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-13083","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13083","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=13083"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/13083\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=13083"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=13083"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=13083"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}