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Forex: USD/JPY erases daily gains

The USD/JPY is trading at the lower band of the trading range drawn during the European session, around the opening price of 93.63, with a Doji daily candlestick, having erased all gains made during the Asian shift to as high as 94.06.

BoJ's Sato called for a new level of action to reach the 2% inflation target, focused on a kind of monetary policy able to affect exchange rates. The most recent USD/JPY rally was triggered by BoJ Governor Shirakawa's decision to leave his duties earlier than expected.

“There is no doubt that Prime Minister Shinzo Abe will appoint an ultra-dove to enforce his views on monetary policy. Even though the central bank has not been sovereign for some time the appointments are likely to create further pressure for JPY”, wrote Commerzbank analyst Lutz Karpowitz, expecting further USD/JPY rally if the new BoJ governor starts the unlimited purchase of bonds before 2014, the current scheduled date.

“With the recent break through 93.16 the uptrend has been renewed and although current intraday bias is negative, signaling a minor corrective pattern towards 93.10, the overall outlook is still bullish, for 95.00”, wrote Deltastock.com analyst Stoyan Mihaylov.

Forex: EUR/USD extending downside

The EUR/USD was trading -0.46% lower on the day, at 1.3520, the lower band of the trading range seen during the European session after falling from just below 1.3600 on the Asian shift. However, after its fourth attempt to try a move lower, below 1.3520 intraday support, the pair is giving in and has already printed a low at 1.3507.
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Forex: GBP/USD upside capped at 1.5680

After the failed attempt to break above 1.5680, the sterling is back to trade around the mid 1.5600s, as risk aversion continues to gather pace on Wednesday....
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