USD/JPY has posted gains on Monday

USD/JPY has posted gains on Monday, following huge losses last week as the yen rebounded. In the European session, the pair is trading just shy of the 119 line. On Sunday, Prime Minister Shinzo Abe’s Liberal Democratic party swept to victory in parliamentary elections. On the release front, the all-important Tankan releases were mixed. In the US, there are no major events to start off the week. Empire State Manufacturing Index looked awful, slipping to -3.6 points. Later in the day, we’ll get a look at Industrial Production. Both indicators are expected to improve, which could give the US dollar a boost. There are no Japanese releases on Monday.
Japan’s ruling Liberal Democratic party registered a convincing election victory, giving Prime Minister Abe a comfortable majority in the lower house of parliament. However, winning the election is likely to be the easy part, as the economy is stumbling and Abe’s economic reforms will face resistance from the upper house. Growth and inflation have not met the government’s target, and the yen has tumbled to around 120 under “Abenomics”, with the BoJ implementing radical monetary easing. Meanwhile, the Japanese Tankan indices were a mix in the Q3 readings. The Manufacturing Index dipped to 12 points, down from 13 points in Q2. There was better news from the Non-Manufacturing Index, improving to 16 points, up from 14 points in Q2. The yen showed little response to these key releases.
USD/JPY posted strong gains early in the Asian session, testing resistance at 118.69. The pair then retracted. In the European session, the pair has pushed higher and broken above the 118.69 line. USD/JPY is steady early in the North American session.
118.69 has switched to support role as the dollar has pushed higher. It could see further activity in the North American session. 117.94 is stronger.
On the upside, 119.63 is an immediate resistance line. USD/JPY ratio is pointing to gains in long positions on Monday. This is consistent with the pair’s movement, as the yen has posted losses. The ratio has a majority of long positions, indicative of trader bias towards USD/JPY continuing to gain ground.

USD/JPY has posted strong gains on Thursday

USD/JPY has posted strong gains on Thursday, following strong gains by the yen for most of the week. In the European session, the pair is trading in the mid-118 range. The yen lost ground after Japanese Core Machinery Orders tumbled by 6.4%. As well, Tertiary Industry Activity disappointed with a reading of -0.2%. In the US, today’s major events include unemployment claims and retail sales. There are no Japanese releases on Thursday.
Japanese manufacturing took a downturn in October, as Japanese Core Machinery Orders swooned, posting a decline of 6.4%. This was the first decline since June, and was much worse than the estimate of -2.1%. Tertiary Industry Activity also disappointed with a drop of 0.2%, its second decline in three readings. The economy is clearly in trouble, as two consecutive quarters of negative growth mean that the country is officially in recession. Another ominous sign is that consumer confidence indicator continues to weaken. Not surprisingly, the Japanese consumer is less optimistic, as Consumer Confidence softened for a fourth straight month, falling to 37.7 points in November.
USD/JPY posted strong gains early in the Asian session, breaking above resistance at 117.94. The pair continued to post gains in European trade, testing resistance at 118.69. The pair has since retracted.
117.94 has reverted to a support role as the dollar has pushed higher. The next support line is 116.66.
On the upside, 118.69 is under strong pressure. 119.63 is stronger. USD/JPY ratio is pointing to gains in long positions on Thursday, resuming the trend we saw earlier in the week. This is not consistent with the pair’s movement, as the yen has posted losses. The ratio has a majority of long positions, indicative of trader bias towards USD/JPY gaining ground.

EUR/USD is showing little movement on Wednesday

EUR/USD is showing little movement on Wednesday, as the pair is trading in the high-1.23 range. On the release front, it’s a quiet day, with no major events out of the Eurozone or the US. In the Eurozone, French Industrial Production disappointed, posting a decline of -0.8%. In the US, today’s highlight is Crude Oil Inventories.
The Eurozone continues to struggle with low inflation levels, and a senior ECB official is warning of deflation dangers. Speaking in Washington on Tuesday, an ECB board member Peter Praet said that falling oil prices could push Eurozone inflation into negative territory. Such a scenario would spell bad news for the sluggish Eurozone economy and could push the euro to lower levels.
German numbers have been mixed recently and the trend has continued this week. On Tuesday, Trade Balance climbed to EUR 20.6 billion, marking a 3-month high. This easily beat the estimate of 18.1 billion. On Monday, German Industrial Production didn’t look sharp, posting a weak gain of 0.2%. This was a sharp drop from the 1.4% gain a month earlier. As the Eurozone’s largest economy, the euro is sensitive to German data and could lose more ground if key German data misses expectations.
EUR/USD has shown little movement in the Asian and European sessions.
1.2407 remains a weak resistance line. 1.2518 is stronger.
1.2286 is a strong support level.
Current range: 1.2286 to 1.2407 EUR/USD ratio is pointing to gains in short positions on Wednesday, continuing the trend we saw a day earlier. This is not consistent with the pair’s movement, as the euro is almost unchanged. The ratio is pointing to a majority of short positions, indicative of trader towards the dollar posting gains.

EUR/USD was flat in the Asian session

EUR/USD is almost unchanged on Monday, following gains a day earlier. In the European session, the pair is trading in the mid-1.22 range. The wobbly euro finds itself at its lowest level against the dollar since August 2012. On the release front, there are no major releases out of the Eurozone or the US. German Industrial Production dropped to 0.2%, while Eurozone Sentix Investor Confidence came in at -2.5 points. In the US, today’s sole event is the Labor Market Conditions Index, a new indicator which the Federal Reserve introduced in October.
Eurozone numbers were not impressive to start off the week. German Industrial Production posted a weak gain of 0.2%, compared to a 1.4% gain a month earlier. Investor confidence remains low, as the Eurozone Sentix Investor Confidence report recorded a decline of 2.5 points, a fourth straight decline.EUR/USD was flat in the Asian session. The pair has edged lower in European trade, breaking support at 1.2286.
1.2286 is a weak resistance line. Will the pair break below this line? 1.2407 is stronger.
1.2143 is a strong support level. EUR/USD ratio is pointing to gains in long positions on Monday. This is not consistent with the pair’s movement, as the euro has posted small losses. The ratio has a majority of long positions, indicative of trader bias towards EUR/USD moving upwards

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XAU/USD

Gold is flat on Wednesday, as the spot price stands at $1201.10 in the European session. On the release front, there are two key releases – ADP Nonfarm Employment Change and ISM Non-Manufacturing PMI.
Gold prices have taken traders on a roller coaster ride early in the week. On Sunday, gold dropped sharply after Swiss voters rejected a proposal to boost the Swiss National Bank’s gold reserves. Had the motion passed, the SNB would have been required to purchase some 1500 metric tons of gold over five years. Gold prices sank to $1142 per ounce early on Monday, but reversed directions and has posted huge gains, climbing close to 5% on the day. Still, the long-term range for gold remains bearish, as the US economy strengthens and the markets prepare for a rate hike in 2015.
XAU/USD has shown little movement in the Asian and European sessions. The pair continues to trade close to the key $1200 line.
1200 is fluid and could see more action during the day. It is currently a weak support level.
1215 is an immediate resistance line. 1240 is stronger.
Current range: 1200 to 1215. XAU/USD ratio is pointing to gains in long positions on Wednesday. This is consistent with the pair’s movement, as gold has posted very small gains. The ratio has a majority of long positions, indicative of trader bias towards gold moving to higher gold.