euro remained under pressure against the US dollar throughout yesterday's
trading session, as investors remained cautious regarding Greece's financial
situation. The EUR/USD spent much of the day range trading around the 1.3225
level after failing to break above key resistance lines the day before. Today,
traders will want to pay attention to the weekly US Unemployment Claims figure.
A better than expected result may result in the euro falling further against
- US Unemployment Claims May Generate Volatility Today
GBP - Sterling Tumbles
Following MPC Meeting Minutes
JPY - Yen Drops to
7-Month Low vs. USD
Crude Oil - Crude Comes
Off Recent Highs amid Decreased Demand
Market Trends – 23 February 2012
USD - US Unemployment Claims May Generate
US dollar saw gains virtually across the board yesterday, as the combination of
a number of international factors resulted in investors reverting to the
greenback. The USD/JPY extended its bullish trend, reaching as high as 80.37
before staging a mild downward correction. The pair's seven-month high can be
attributed to last week's decision by the Bank of Japan to boost its asset
buying program. The decision, combined with recent positive US fundamental
indicators, has led to the value of the USD spiking.
Against the euro, the dollar continued to move up as concerns that Greece's
financial troubles could still be an issue led to traders abandoning riskier
assets. After peaking at 1.3263 during the morning session, the EUR/USD spent
much of the day trading close to the 1.3220 level.
Turning to today, traders will want to pay attention to the US Unemployment
Claims figure, set to be released at 13:30 GMT. Applications for first time
unemployment insurance in the US are forecasted to have gone up slightly from
last week. If true, the dollar may come under pressure against safe-haven
currencies like the yen during the afternoon session. At the same time, a lower
than forecasted result could help boost the greenback vs. its riskier currency
GBP - Sterling Tumbles Following MPC Meeting
British pound tumbled against most of its main currency rivals yesterday,
following the release of the latest MPC Meeting Minutes. The meeting minutes,
which left the possibility of further quantitative easing in the coming months,
caused investors to abandon the sterling in favor of safer assets. The GBP/USD
dropped close to 160 pips following the news, but was able to stage a mild
correction during the evening session. The GBP/JPY slid close to 90 pips before
stabilizing around the 125.85 level.
Whether the pound is able to rebound during today's trading session will be
largely dependent on fundamental indicators out of the euro-zone and US. The German
Ifo Business Climate, set to be released at 9:00 GMT, is forecasted to show
some improvement over last month. If true, investors may choose to place their
funds with riskier assets, like the pound. Later in the day, the US
Unemployment Claims figure is set to be released. Should the figure show
improvements in the US employment sector, the pound may extend its losses
against the greenback.
JPY - Yen Drops to 7-Month Low vs. USD
yen fell against most of its main currency rivals during yesterday's trading
session, as fresh comments from the Bank of Japan (BOJ) left open the
possibility of further intervention in the currency markets. The USD/JPY hit a
seven-month high at 80.37 before settling at the 80.20 level. The EUR/JPY shot
up around 75 pips throughout the day before settling at around the 106.30
Whether or not the yen bounces back from these losses during today's session is
largely dependent on any moves by the Bank of Japan. Should the BOJ determine
that the yen is overvalued and threaten to once again intervene in the currency
markets, the JPY could extend its losses. On the other hand, should either the
German Ifo Business Climate or the weekly US Unemployment Claims figure come in
worse than forecasted, the yen may reverse some of its losses during the
Crude Oil - Crude Comes Off Recent Highs
amid Decreased Demand
oil saw slight downward movement during trading yesterday, as reports of
decreased manufacturing in the euro-zone and China indicated a slowdown in
demand. Still the commodity remained well above $105 a barrel, largely because
of ongoing tensions in the Middle East. News that Iran denied UN inspectors
access to a sensitive military site, signaled that the conflict with the West
is far from over.
Turning to today, fluctuations in the price of crude oil will largely be
determined by developments out of the Middle East. Any signs that Iran will
move to limit exports may keep prices at their current highs. That being said,
should any poor euro-zone news negatively impact investor risk appetite, the
commodity may take some losses.
chart indicators are placing this pair in overbought territory, indicating that
downward movement could occur in the near future. A bearish cross has formed on
the Slow Stochastic, while the Williams Percent Range is hovering close to the
-20 level. Traders may want to go short in their positions.
Relative Strength Index is moving downward, but has yet to cross into the
oversold region. Traders can take this as a sign that the pair has room to
extend its bearish correction. This theory is supported by the Slow Stochastic
on the same chart, which has recently formed a bearish cross. Traders may want
to short their positions for the time being.
pair's recent upward trend looks like it still has room to grow. While the
weekly chart's Relative Strength Index has gone up, it has yet to cross over
into the overbought zone. Traders may want to continue going long in their
positions for the time being.
bullish cross on the daily chart's Slow Stochastic indicates that upward movement
could occur in the near future. The Williams Percent Range on the same chart,
which is currently right around the -80 level, supports this theory. Going long
may be a wise choice for traders.