الاثنين، 22 يوليو 2013

Can USD/JPY Hold The 100.00 Figure?

Market Drivers July 22, 2013
Abe wins election as expected, but not outright majority for LDP
USD/JPY comes under profit taking in the wake of results
Nikkei-0.47$ Europe -0.06%
Oil $108/bbl
Gold $1315/oz.
Europe and Asia:
None
North America:
USD Chicago Fed Nat Activity Index 8:30
USD Existing Home Sales 10:00
As expected Shinzo Abe coasted to a comfortable win Japan’s upper house elections, but the LDP party failed to secure an outright majority resulting in profit taking in USD/JPY that saw the pair tumble below the 100.00 mark in Asian session trade before stabilizing my morning European dealing.
Mr. Abe’s LDP party won 65 seats while his coalition partner New Komeito won 11 seats giving the LDP control of both houses of parliament for the first time since 2007. Investors initially greeted the news with enthusiasm as USD/JPY opened up at 100.80 in New Zealand, but the pair quickly came under profit taking pressure as the results provided no upside surprise.
As we noted on Friday, LDP needed to win 72 seat in order to assume outright majority in the upper house and it was not able to accomplish that. Furthermore, investors were also concerned that given LDP wide base of membership, the party may be resistant to enacting radical reforms as it instead concentrates on solidifying its power.
The combination of “sell the news dynamic” along with very illiquid summer markets in Asia caused plunge in USD/JPY with the pair hitting a low of 99.60 before finally finding some footing by late Asia trade. With the focus on the Japanese election now over, attention will turn back to the US and the direction of the pair for the rest of the week will likely be driven by US economic data.
To that end today’s Existing Homes sales report will provide key insight into the state of the housing market which remains critical to the US recovery. Last week/s Building Permits and Housing Starts both missed their mark suggesting that the spike in US rates could be dampening demand.
Today, the market is looking for a print of 5.27M units versus 5.18M the period prior. If the Existing Homes data meets or beats expectation the dollar may get a boost with USD/JPY rising towards the 100.50 mark. However if the data misses, USD/JPY could come under a second wave of selling pressure with shorts targeting the 99.50 level as the day progresses.

Recent posts by BKAssettManagement

- See more at: http://www.forexnews.com/blog/2013/07/22/can-usdjpy-hold-the-100-00-figure/#sthash.w3OyBFAH.dpuf
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Top Trade Idea for July 18th, 2013 – NZD/JPY

NZD/JPY Set Looms as Japan’s Election Could Effect Abe’s Plans
Abe’s next step of this plan involves a legislative agenda and makes the Monday elections in Japan all the more important as gaining seats in the upper chamber of parliament will be important to getting the support needed. If Abe and his LDP party can strengthen their position, this will be bullish for the Nikkei and USD/JPY.
However while I like JPY weakness, I like the breakout set up that is setting up in the NZD/JPY.
The NZD/JPY has consolidated nicely into a tight trading range making the breakout/breakdown set up more reliable on a pierce of the range. In this case the pair is setting up a potential break OUT on JPY weakness so while I do I have a FUNDAMENTAL bias for it, there is a technically supported bias for this too:
nzdjpy
The near-term ceiling (aka “breadcrumb”) is at 79.73 but I will wait for momentum through the 79.80 minor psychological level.
Support is at 76.67 and there is another layer of support just above the 75.00 level and although I am not looking to get short this pair, I have to remember that a 76.67 breakdown with sufficient momentum to take out 76.50 could easily follow through to those lows.
The MACD Histogram is positive so this makes the BUY on a break through 79.80 “pre-confirmed” – which suits me just fine since I would rather sell JPY versus the NZD.
About Raghee Horner
Raghee Horner is the Chief Currency Analyst for IBFX. She has written three books published by John Wiley & Sons including her latest, “Forex on Five“. Raghee is a featured contributor at TradeStation, ForexFactory, BabyPips, Investing.com, and is a blogger for the StockTwits Network. Raghee runs a popular morning chat, trading commentary, and alert service at TradeForexFutures.com.

Recent posts by Raghee Horner

- See more at: http://www.forexnews.com/blog/2013/07/18/top-trade-idea-for-july-18th-2013-nzdjpy/#sthash.WN3geWAl.dpuf
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How Will USD/JPY React to Japanese Election Results? - See more at: http://www.forexnews.com/blog/2013/07/19/how-will-usdjpy-react-to-japanese-election-results/#sthash.Yr8ImQbk.dpuf

Market Drivers July 19, 2013
USD/JPY retreats from highs on Nikkei fall
UK PSNB better but misses forecasts
Nikkei -1.48% Europe -0.58%
Oil $108/bbl
Gold $11286/oz.
Europe and Asia:
JPY Leading Index
JPY All Industry Activity Index
NZD Credit Card Spending
GBP Public Finances
GBP Public Sector Net Borrowing
North America:
CAD CPI 8:30
It’s been a very quiet lackluster night of trade in the currency market as the summer stall is clearly upon us. USD/JPY was the primary mover of the night first rising to weekly highs of 100.87 at the start of Asian session trade only to tumble sharply after Nikkei saw a 2.7% plunge in a matter of minutes.
Traders had little explanation for the sharp selloff in the Nikkei except to note that a large macro fund may have been liquidating its position ahead of this weekend’s Japanese election. USD/JPY eventually rebounded and stabilized around 100.30 in European morning dealing.
Although this weekend the G-20 will meet in Moscow, the primary focus of the FX market remains on Japan where Prime Minister Shinzo Abe’s LDP party is expected to do well in parliamentary elections, but just how well remains an open question. In order to obtain an outright majority the LDP needs to win 72 seats, but the polls put the LDP at 65-66 seat rate which would mean that it would still have to govern in a coalition.
If the LDP is able to capture an outright majority of seats, USD/JPY could gap open higher on Sunday and possibly challenge the near term swing highs at the 101.50 level. If on the other hand the winning margin is more modest, USD/JPY could slip below the 100.00 mark on knee jerk profit taking.
What appears to clear, barring any sharp surprises in the outcome is that Mr. Abe is likely to consolidate his power and maintain course for an accommodative fiscal and monetary policy. That in turn should prove to be USD/JPY bullish unless the JGB market in Japan turns volatile once again.
Elsewhere the majors continued to tread water in very listless London trade with virtually no economic data on the calendar. In North American session the eco calendar remains barren and price action may continue to be slow as trader’s attention is focused more on the heatwave in New York rather than any activity on their screens.

Recent posts by BKAssettManagement

- See more at: http://www.forexnews.com/blog/2013/07/19/how-will-usdjpy-react-to-japanese-election-results/#sthash.Yr8ImQbk.dpuf
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Chart of the Day for July 19th, 2013 – EUR/USD

Prices are consolidating below resistance at 1.3163, the 61.8% Fibonacciretracement. A break higher targets the 76.4% level at 1.3260. Near-term support is at 1.3085, the 50% retracement, with a move below that exposing the 38.2% Fib at 1.3007.
eurusd

Recent posts by DailyFX

- See more at: http://www.forexnews.com/blog/2013/07/19/chart-of-the-day-for-july-19th-2013-eurusd/#sthash.hmAefThm.dpuf
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