Previous Story
USD/JPY falls on Japan Finance Minister comments
Posted On 21 Nov 2014
Comment: 0
USD/JPY and most JPY crosses pushed lower on mid-morning comments from Japanese FinMin Aso. USD/JPY was bid into the Tokyo fix earlier, up from 118.00 to 118.37 on pre-long weekend demand. Already on the way down as this demand abated, the Aso comment led to fresh sales and renewed long liquidation. Slicing through 117.70-85 support and stops below, it fell to 117.35. A bounce back to 117.87 was met with fresh sales. Stops have been re-set sub-117.35-40 and more are eyed below 117.00. EUR/JPY fell back too post-fix with diminished investor flows allowing the cross to move down without much resistance. From 148.43, it traded through 148.00 and stops sub-147.90 to 147.49.
EUR/USD opened in Asia at 1.2539 after holding up surprisingly well last night despite strong US data on the heels of weaker EZ flash PMI data. Dipping to 1.2534 early, it later grinded higher on broad USD losses again led by USD/JPY. A high of 1.2569 was seen before offers returned and the pair steadied. Decent EUR/JPY sales helped cap the upside. The lack of more EUR/USD upside suggests short-term players are net long, and looking for excuses to take profits rather than add to their positions. The rally could extend towards 1.2650 but longer-term players may view this as fresh a fresh selling opportunity. There is also talk the SNB could begin diversifying out of large EUR reserves built up in past intervention efforts.
GBP/USD was better bid in Asia, up modestly from 1.5679 to 1.5714 on broad USD weakness before easing back. EUR/GBP did little, treading water between 0.7991-0.8000.
USD/CHF fell back modestly from 0.9587 to 0.9564 on USD sogginess. EUR/CHF was somewhat better bid between 1.2018-23 following threats of heated intervention from SNB’s Zurbruegg last night. There is also talk of the SNB diversifying its hefty EUR reserves built up on past interventions into other currencies.
AUD/USD opened in Asia at 0.8618, already having run up from London’s 0.8566 low to 0.8641 in New York as USD/JPY retraced lower. AUD/USD continued to take its cues from USD/JPY in Asia, bouncing further from 0.8612 to 0.8651 as USD/JPY fell again. Despite current buoyancy, the bigger picture should not be forgotten with damage to Australia’s terms of trade from sliding iron ore prices not felt until next year. The current 0.85-0.90 range could hold short-term but the risk remains down and massive sales are likely on a break below 0.8500.
The post USD/JPY falls on Japan Finance Minister comments appeared first on Forex Circles.
