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"Analysts: AUD/USD prospects"(2012-09-13)

 

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Analysts: AUD/USD prospects

 

 

 

On Thursday AUD/USD trades around $1.0450 after failing to fix above $1.0500 yesterday. The currency trades close to a three-week maximum. The further dynamics of the pair will depend on the Fed monetary policy decision (16:30 GMT).

 

Morgan Stanley: The markets are seeing a good chance that the Fed will announce QE3 today, what is supporting the risky currencies such as the Aussie and kiwi.

 

Citigroup: We suspect the market has priced in too high of odds of QE3. With that in mind, any rally in risky assets resulting from the Fed pursuing QE3 might be small and short-lived.

 

RBS: We see AUD/USD at the parity level ($1.0000) within the next 1-3 months given the Australian macroeconomic conditions and the threat coming from China.

 

 

eurusd_17-01.gif

 

 

Chart. Daily AUD/USD

 

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"September 17: forex news"(2012-09-17)

 

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September 17: forex news

 

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On Monday EUR/USD continues its uptrend, accelerated by the Fed’s QE3 announcement last week. Euro sentiment remains positive event despite the disagreement among the regional monetary authorities in matters like the EU banking union, Greece and Spain on the Eurogroup meetings, held this weekend. EUR/USD trades around $1.3130 after peaking to $1.3168 on Friday. Today euro zone is to release its current account (08:00 GMT) and trade balance (09:00 GMT). Tomorrow the German ZEW economic sentiment report may show investor confidence remains weak in the region’s biggest economy.

 

USD/JPY remains flat around 78.30 ahead of a two-day BOJ meeting (September18-19). Many economists expect the regulator to follow the Fed in expanding monetary easing in order to fight the expensive yen. Last week USD/JPY dropped to 77.12, hurting Japan’s exports. Today Japan has a bank holiday.

 

Demand on Aussie and kiwi is down today amid escalating tensions between Japan and China over the ownership of disputed islands. According to specialists, geopolitical disputes will further weigh on the high-yielding currencies. What’s more, the currencies remain under pressure after the Euro group meetings. AUD/USD trades around $1.0530 after reaching a six-month high at $1.0623 on Friday. NZD/USD slid to $0.8280 after Friday’s maximum at $0.8351. USD/CAD trades flat around 0.9700. GBP/USD declined from Friday’s high at $1.6254, but still trades above $1.6200.

 

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"CFTC trader positioning data"(2012-09-17)

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CFTC trader positioning data

 

 

 

The latest Commitments of Traders (COT) report for week ended on September 11 was released on Friday, September 14, by the Commodity Futures Trading Commission (CFTC).

 

Take a look at the following table.

 

 

 

cftc_eng.jpg

 

It’s necessary to note that the figures cited above are always a week old at the time of their release. Never the less, CFTC data gives a good oversight into how the market is positioned and if/how these positions are being unwound. Although the CME speculators represent a small fraction of trading in the currency markets, their trades are widely seen as typical of hedge fund investors' currency movements.

 

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"Key options expiring today"(2012-09-17)

 

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Key options expiring today

 

 

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (2 p.m. GMT).

 

Here are the key options expiring today:

 

EUR/USD: $1.3120, $1.3110, $1.3050, $1.3000, $1.2950

USD/JPY: 77.50, 77.65, 78.00, 78.65, 79.00

AUD/USD: $1.0550, $1.0600, $1.0650

 

 

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"Westpac: bears on USD/CAD"(2012-09-17)

 

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Westpac: bears on USD/CAD

 

 

Analysts at Westpac Institutional Bank recommend going short on USD/CAD at current levels, targeting 0.9400 and with a stop at 0.9860.

 

In their view, Canadian economy is a good performer and the central bank is unlikely to ease in the foreseeable future. Moreover, oil prices are rising on the back of the long-lasting tensions in the Middle East and the Fed’s QE3 launch. Specialists believe commodity prices will rise at least three month after the Fed decision.

 

usdcad_14-00.gif

 

 

 

Chart. Daily USD/CAD

 

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"BK Asset Management: buy EUR/JPY"(2012-09-17)

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BK Asset Management: buy EUR/JPY

 

 

 

According to analysts at BK Asset Management, euro still has some room for growth. They recommend buying EUR/JPY at 101.75 with a stop at 99.75 and a target of 105.00.

 

In their view, EUR/JPY is the best currency pair to take advantage of the euro-positive sentiment, boosted by the QE3 announcement. Specialists give a meaning to the tone of Bernanke’s speech on Thursday: the pledge of “unlimited” bond purchases is likely to support the markets for a long time. They also point at a decline in euro short positions (see CFTC data), what means the single currency will get a lift soon. What’s more, the Bank of Japan is likely to follow the Fed in policy easing in order to fight the expensive yen. As a result, the EUR/JPY cross has good prospects for growth.

 

eurjpy_16-14.gif

 

 

 

Chart. Daily EUR/JPY

 

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"EUR/USD: is the rally over?"(2012-09-18)

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EUR/USD: is the rally over?

 

 

 

On Tuesday EUR/USD dropped back to the $1.3050 area from a new 4-month high at $1.3171, opened yesterday. The pair was pulled down by the German ZEW survey: the economic sentiment improved from -25.5 to -18.2 (consensus of -19.0), but it still remains deep in the negative territory. EMU's economic sentiment improved a lot, rising from -21.2 to -3.8 in September.

 

Despite the fact that today the euro sentiment is negative, strategists at BMO Capital believe the single currency still has prospects for growth. They recommend buying EUR/USD on a pullback at $1.3025, setting a stop at $1.2925 and a target at $1.3325.

 

eurusd_1709.gif

 

Chart. Daily EUR/USD

 

 

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" AUD/USD down after RBA minutes"(2012-09-18)

 

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AUD/USD down after RBA minutes

 

 

AUD/USD is declining for a second consecutive day after peaking $1.0623 on Friday (highest since August 9). The pair has already slid to the $1.0420 area, the next support is seen at $1.0406 (50-day MA) and than at $1.0320 (200-day MA and September 11 minimum).

 

The Aussie is under pressure today as the RBA meeting minutes showed the monetary authorities see the strong national currency as a threat to the economy and believe there is enough room for rate cuts. They have also mentioned the risks from China and from Europe.

 

RBS: Central bank officials acknowledged risks from China and weaker commodity prices in particular and thus have a bias to cut, but did not show real urgency.

 

Westpac: It seems unlikely that the Aussie can make substantial gains simply on the back of the Fed printing more money.

 

audusd_1709.gif

 

 

Chart. Daily AUD/USD

 

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"Key options expiring today"(2012-09-18)

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Key options expiring today

 

 

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (2 p.m. GMT).

 

Here are the key options expiring today:

 

EUR/USD: $1.3000, $1.3100, $1.3100, $1.3130-35, $1.3150, $1.3230

USD/JPY: 78.75, 78.50, 78.30, 78.00, 77.50, 77.20

GBP/USD: $1.6200, $1.6000

EUR/GBP: 0.8075

AUD/USD: $1.0450, $1.0500, $1.0600

 

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What to wait from the BoJ?"(2012-09-18)

 

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What to wait from the BoJ?

 

 

 

On Wednesday the Bank of Japan will announce its monetary policy decision. According to a Bloomberg survey, 5 of 21 economists predict the BOJ will ease policy tomorrow, while 16 are expecting a move by October. Easing expectations are mainly caused by the QE3, announced by the Fed last week: Japan’s monetary authorities are afraid the expensive yen may hurt the economy.

 

Mitsubishi UFJ Morgan Stanley Securities: A lack of additional monetary easing could risk a stronger yen. The Bank of Japan will probably increase its asset- purchase program by about 5 trillion yen ($64 billion).

 

Nomura: The likelihood of monetary easing by the BoJ is gradually rising as the Fed embarked on its new QE and conflict with China adds further uncertainty to the economic outlook. However, no additional easing is expected this week, as USDJPY is trading favorably.

 

Bank of Tokyo Mitsubishi UFJ: We expect the BoJ to remain on hold tomorrow, although there is a high risk of further easing before year end with the Japanese economy losing upward momentum amidst weakening external demand.

 

 

japan-yen.jpg

 

 

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"September 19: forex news"(2012-09-19)

 

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September 19: forex news

 

 

 

The risk appetite improved on Wednesday as the Bank of Japan realized investors’ expectations and added 10 trillion yen ($127 billion) to its 45 trillion-yen fund that buys assets including government debt. The BOJ decision is aimed at weakening the yen as the strong national currency damages exports. The easing was not fully priced by the markets. After the announcement USD/JPY rose to 79.10: the pair moves up for a fourth consecutive day after plummeting to 77.12 on the Fed’s QE3 announcement on September 13.

 

EUR/USD rose to $1.3085 on the back of the BOJ easing after yesterday’s decline. Today watch for housing market data in the US. Both AUD/USD and NZD/USD move on the upside, but still remain far from September 14 maximums. GBP/USD trades around $1.6258 (close to a 4-month high) ahead of the BOE meeting minutes release (8:30 GMT).

 

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"Key options expiring today"(2012-09-19)

 

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Key options expiring today

 

 

 

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (2 p.m. GMT).

 

Here are the key options expiring today:

 

EUR/USD: $1.2900, $1.3000, $1.3100, $1.3120, $1.3150, $1.3260

USD/JPY: 79.00, 78.60, 78.40, 77.90

GBP/USD: $1.6200, $1.6100

EUR/CHF: 1.2100

AUD/USD: $1.0345, $1.0400-05, $1.0445, $1.0475, $1.0525, $1.0550

 

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"Aspen Trading: buy EUR/JPY"(2012-09-19)

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Aspen Trading: buy EUR/JPY

 

 

 

Analysts at Aspen Trading Group recommend buying EUR/JPY at current levels, targeting 105.50 and with a stop at 101.50.

 

In their view the dollar selloff, caused by QE announcement, is over. Instead, the Japanese yen will become a funding currency. According to specialists, euro will get a lift soon when Spain finally asks for financial aid.

 

Note that the specialists at BK Asset Management gave a similar trading recommendation a few days ago.

 

 

 

eurjpy_12-46.gif

 

Chart. Daily EUR/JPY

 

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Analysts: BOJ easing disappoints

 

 

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Photo: Frantisek Staud

 

USD/JPY has slid back below the 79.00 mark after peaking 79.21 on the Bank of Japan’s easing (asset-purchasing program was expanded by 10 trillion yen today). At this moment the regulator’s efforts to weaken the yen don’t really look successful: the pair still remains below the 200-day MA and further gains are not likely. Most analysts are disappointed by today's BOJ actions.

 

Nomura: The BOJ action was done in order to avoid market disappointment and immediate pressure from the Japanese policymakers. The easing surprised the markets (many investors expected the BOJ to ease in October), but was not impressive. The USD/JPY rally is a good selling opportunity for short term investors.

 

BTMU: Following the recent FOMC decision the feeling was that waiting any longer could have triggered a lurch lower in USD/JPY. The decision today could well be followed up by further easing steps at the meeting in October. Ahead of the elections the regulator may ease more aggressively in order to fight deflation.

 

ING: The BOJ easing is too small and too late: America and Europe will expand their monetary base at a more rapid rate than Japan. The BOJ doesn’t sound convincing: USD/JPY gains above 79.20 (today’s high) are limited. Japan will not be able to reach its 1% inflation target by the end of the fiscal year.

 

usdjpy_14-44.gif

 

 

Chart. Daily USD/JPY

 

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"GBP/USD: technical comments"(2012-09-20)

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GBP/USD: technical comments

 

 

 

GBP/USD declines for a third consecutive day and has already broken below the $1.6200 mark. The pair still remains overbought: on a daily chart we see RSI at 70.

 

Analysts at Commerzbank forecast GBP/USD to dip lower. Initial support lies at $1.6110 (trend line connecting April 2011, August 2011 and April 2012). On the upside strong resistance is seen at $1.6300 (2012 maximum). Above $1.6300 there is scope for a move to extend to the $1.6500 level, which if seen, is expected to cap.

 

 

gbpusd_16-40.gif

 

 

Chart. Daily GBP/USD

 

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"September 21: forex news"(2012-09-21)

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September 21: forex news

 

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Today the market sentiment is much better: the high-yielding currencies are gaining momentum after yesterday’s drop. EUR/USD is retracing yesterday’s losses, eyeing the key level of $1.3000. The Minneapolis Fed President Narayana Kocherlakota said the regulator should hold rates at around zero until unemployment drops below 5.5%. Meanwhile, according to Financial Times data, the EU policymakers are discussing a new rescue plan for Spain. According to Westpac analysts, the formal Spanish bailout is becoming closer, what will support the risky currencies in the near-term. Today Spanish Prime Minister Mariano Rajoy is scheduled to meet his Italian counterpart Mario Monti in Rome.

 

AUD/USD again trades above the $1.0400 mark, while NZD/USD rose back to the $0.8300 level. USD/CAD moves down. Today watch for the CPI data release in Canada (12:30 GMT). GBP/USD rose to $1.6250. UK public sector net borrowing data will be released at 8:30 GMT. USD/JPY moves on a downside for a third consecutive day.

 

 

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"Key options expiring today"(2012-09-21)

 

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Key options expiring today

 

 

 

Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (2 p.m. GMT).

 

Here are the key options expiring today:

 

EUR/USD: $1.2900, $1.2910, $1.2940, $1.2990, $1.3085, $1.3100

USD/JPY: 78.20, 78.40

GBP/USD: $1.6250, $1.6120

EUR/GBP: 0.7945

AUD/USD: $1.0410, $1.0450, $1.0460

AUD/JPY: Y82.50

 

 

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"Credit Suisse: bearish on EUR/USD"(2012-09-21)

 

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Credit Suisse: bearish on EUR/USD

 

 

Analysts at Credit Suisse recommend going short on EUR/USD at current levels, targeting $1.2829 and with a stop at $1.3190. In their view, the recent failure to break above the $1.3170 level (78.6% Fib. retracement from the Feb.-July decline) may pull the pair down to the 200-day MA.

 

eurusd_11-27.gif

 

 

 

Chart. Daily EUR/USD

 

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"TD Securities: CAD is to weaken"(2012-09-21)

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TD Securities: CAD is to weaken

 

 

Strategists at TD Securities recommend buying USD/CAD at current levels, targeting C$1.0000 and with a stop at C$0.9663. By the end of the year the pair may even strengthen to C$1.0500.

 

According to specialists at TD Securities, yesterday’s sharp decline in risky assets (even despite the today’s rebound) is a negative signal for the loonie. USD/CAD rise above C$0.9800 may signal the new wave of the risk aversion.

 

usdcad_13-59.gif

 

 

 

Chart. Daily USD/CAD

 

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"Dollar weakness won't help the euro"(2012-09-21)

 

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Dollar weakness won't help the euro

 

 

In recent years in the periods of dollar weakness the central banks diversified their currency reserves out of the dollar into the euro. Most analysts expect a new period of a weak greenback: the Federal Reserve announced a new round of cheap liquidity injection on September 13. Will the single currency find support because of the QE3? Not really.

 

According to most economists, the single currency seems to have lost the confidence of the reserve managers. The central banks are more likely to diversify their reserves into the G10 emerging currencies. Therefore, we don’t have to expect the single currency to benefit from the dollar’s strength this time.

 

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Photo: Bloomberg

 

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"CFTC trader positioning data"(2012-09-24)

 

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CFTC trader positioning data

 

 

 

Here are the essentials of the latest Commitments of Traders (COT) report, released on Friday, August 21, by the Commodity Futures Trading Commission (CFTC) for a week ended August 18.

 

It’s not surprising that the large speculators increased their total US dollar short position from $6.18 billion to $10.05 billion. EUR net shorts declined bringing the market’s sentiment to the best level since November 2011. With all the speculations about whether the single currency will be able to sustain gains and reach new summits or it’s doomed for the slide, it’s quite important to know where the market players stand. GBP switched from net shorts to longs, to the best positions since May. JPY net longs declined, CHF net shorts contracted. See more in the table below.

 

 

cftc_engl.png

t’s necessary to note that the figures cited above are always a week old at the time of their release. Never the less, CFTC data gives a good oversight into how the market is positioned and if/how these positions are being unwound. Although the CME speculators represent a small fraction of trading in the currency markets, their trades are widely seen as typical of hedge fund investors' currency movements.

 

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"Gold is close to 2012 maximums"(2012-09-24)

 

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Gold is close to 2012 maximums

 

 

 

On Friday spot gold reached $1,787.52, the highest level since February. Today gold eased down to the levels around $1,757 an ounce – the move seems like a technical correction. The majority of analysts expect the precious metal to gain more as the major central banks around the world ease their policy.

 

UBS: The target for gold price is at $1,950 an ounce. We won’t be surprise if gold drops below $1,750, but those levels will surely attract new buyers.

 

At the same time, note that gold has already added 11% this quarter.

 

ANZ: Gold is close to the year’s high and market players may try to take profits. In addition, $1,800 looks like an obstacle.

 

What’s your opinion?

 

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Image from youcapital.ru

 

 

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"EUR/GBP: technical and fundamental "(2012-09-24)

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EUR/GBP: technical and fundamental

 

 

 

EUR/GBP declined to 0.7965 (lowest level in two weeks and the 100-day MA) as demand for relatively safe British pound rose in conditions of risk aversion. The pair moves back to the downward channel created in May 2011.

 

In a short term the single currency may get some lift if we get positive signals about the resolution of the euro crisis (Spain, Greece, banking union etc.). Resistance for the pair is seen at 0.8100/13 (September 14 maximum), 0.8135 (200-day MA) and then at 0.8160 (50% Fib. retracement of a 2007-2008 uptrend and June 2012 maximums).

 

In a longer prospect, however, the euphoria will come to an end and the investors will remember about dead-locked euro zone’s fundamentals. Sooner or later the ECB will inject more cheap liquidity into the economy, while the Bank of England is likely to remain on hold. As a result, EUR/GBP is expected to continue the downtrend. We see the next support in the 0.7907/7883 area (50-day MA and September minimums), at 0.7811 (August minimum) and at 0.7755.

 

 

eurgbp_14-45.gif

 

 

Chart. Daily EUR/GBP

 

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"EUR/USD: short-term technical picture"(2012-09-24)

 

 

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EUR/USD: short-term technical picture

 

 

 

 

EUR/USD closed last week below $1.3000, an important psychological level, after reaching $1.3172 last Monday. The near-term outlook seems negative. MACD went below the signal line on the daily chart. We don’t see any solid support close enough, so euro looks vulnerable for a decline to $1.2825 (200-day MA). On the upside, the pair needs to rise above $1.3165 to get chance to get to $1.3280.

 

daily_eurusd_14-53.gif

 

 

 

Chart. Daily EUR/USD

 

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Comment here http://www.fbs.com/analytics/2012-09-24/19273-eurusd-short-term-technical-picture

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"SD/JPY: neutral/negative bias"(2012-09-24)

 

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SD/JPY: neutral/negative bias

 

 

 

USD/JPY is moving down for the fourth day in a row after reaching September peak of 79.22 last Wednesday. On the daily chart one may see that on the upside the pair is capped by the Ichimoku Cloud. USD/JPY closed last week above 78 yen and is expected to fluctuate around this level in the near term.

 

Resistance: 78.17 (Tenkan-sen), 78.40/50 (Kijun-sen, 50-day MA), 78.80/85 (August 9 maximum, Cloud bottom), 79.00 (psychological level, 100-day MA), 79.30 (200-day MA, Cloud top).

 

Support: 78.00, 77.64 (June 1 minimum), 77.12 (September 13 minimum).

 

TD Securities: USD is looking a little vulnerable to weakness versus yen this week; the sideways range trading may be the most likely outcome. Short-term price trends are very indecisive – the market is essentially trying to find a stronger sense of direction.

 

 

 

Chart. Daily USD/JPY

 

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If you have any questions to our analysts, you're welcome to ask them in comments to this article!

Recent market news from FBS

 

 

 

Comment here http://www.fbs.com/analytics/2012-09-24/19276-usdjpy-neutralnegative-bias

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