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European Session – Dollar continues to rally against yen above 112

Posted on October 31, 2014 at 2:14 pm GMT

The yen continued to be mauled, post-Bank of Japan policy announcement. It fell to a near 7-year low against the dollar, briefly entering the 112 yen handle. The diverging monetary policies between the Bank of Japan and the US Federal Reserve will likely push the dollar higher versus the yen in coming months. As the BoJ announced more policy easing measures today, the Fed on Wednesday announced its decision to end its bond buying program and is on track to [..]

Forex News – Week ahead promises developments because of ECB, US payrolls

Posted on October 31, 2014 at 1:33 pm GMT

Next week will provide a significant update on the health of the US labor market, while the ECB Governing Council will convene in Frankfurt and Mario Draghi’s press conference will be closely watched as always. There will also be some important news out of Australia – both regarding the labor market and the decision of the Reserve Bank of Australia. A series of PMI indicators out of the UK may show how the economy there is shaping up for the [..]

Forex News – BoJ eases to fight deflation

Posted on October 31, 2014 at 12:49 pm GMT

For the first time in over a year and a half, the Bank of Japan decided to launch another round of stimulus measures, known as quantitative easing. After concluding its monetary policy meeting on Friday, the Japanese central bank announced it would raise its monetary base target to an annual increase of 80 trillion yen from 60-70 trillion yen. The reason behind the BoJ’s move today was to combat risks of deflation, as the Bank was concerned that its 2% [..]

Asian Session – Yen plunges following Bank of Japan surprise of extra stimulus

Posted on October 31, 2014 at 8:17 am GMT

The Bank of Japan surprised the markets today by announcing that it was going to add to its existing stimulus program. The Bank of Japan is going to add liquidity at an 80 trillion yen annual pace, compared to an annual target of 60-70 trillion yen previously. Most economists were not expecting this move as the Bank’s Governor recently made relatively upbeat comments about the Japanese economy and the Bank previously gave the impression it was on hold for now. [..]

Technical Analysis – EURJPY spikes up to 140.00

Posted on October 31, 2014 at 8:08 am GMT

EURJPY spiked higher towards the key technical level of 104.00 yen, surging over 200 pips since the Asian session open on Friday. After making attempts this week to break above 138.00, prices crossed into the daily Ichimoku cloud and above it. The bulls now have a strong upper hand as the market is also above the 200-day moving average, reinforcing the bullish bias. RSI is in bullish territory above 50. EURJPY is currently hovering at the 78.6% Fibonacci retracement level [..]

European Session – Dollar rises on headline US Q3 GDP

Posted on October 30, 2014 at 2:35 pm GMT

The US dollar held onto gains today following upbeat US third quarter growth numbers. The advance reading of GDP rose at an annual rate of 3.5% between July and September, which beat forecasts by 0.5%. The main driver behind expansion in Q3 was a jump in military spending, (the highest in 5 years) and solid gains in business investment and export sales. Today’s data follow a 4.6% rebound in Q2 GDP but despite the Q3 figure being lower, economists believe [..]

Forex News – Dollar firms as Fed ends QE, sees improving US labor market

Posted on October 30, 2014 at 11:05 am GMT

The Federal Reserve concluded its 2-day policy meeting on Wednesday with a surprisingly upbeat statement by the FOMC (Federal Open Market Committee). The US central bank announced that its stimulus program of bond purchases will stop at the end of October, as was widely expected by the markets. What was not expected was the more hawkish tone in the statement as it showed that the Fed had more confidence in the US economy and did not seem too bothered about [..]

Technical Analysis – USDJPY surges above 109.00

Posted on October 30, 2014 at 7:49 am GMT

USDJPY is back on the upside after consolidating around the key technical level of 108.00 earlier this week. The hawkish FOMC statement acted as a catalyst for a surge higher and resulted in a daily close above this key 108.00 level. Prices are now into the next handle at 109.00. The market has retraced 78.6% of the downleg from 110.08 (October 1 high) to 105.19 (October 15 low). Momentum is bullish as the RSI is above 50 and rising. There [..]

Asian Session – US dollar extends gains following optimistic FOMC statement

Posted on October 30, 2014 at 7:00 am GMT

The dollar continued its climb and extended its gains from the previous day after the Federal Reserve appeared more confident than the market expected on the US economy. The Fed decided to stop its monthly bond purchase program known as QE, as was widely expected. What was less expected was the relatively upbeat assessment of the US economy, as it said the “underutilization of labor resources is gradually diminishing”. The Fed did not appear particularly worried about the possibility of [..]

European Session – Majors trade in narrow range ahead of key Fed announcement

Posted on October 29, 2014 at 2:52 pm GMT

Major currencies traded in a mostly narrow range today, as the US dollar awaited the decision out of the Federal Reserve. The Fed was expected to end its quantitative easing program and October was going to be the last month when the central bank pumped fresh money into the markets through the purchase of government and mortgage-backed bonds. Nevertheless, the Fed was probably going to stick to its promise of ultra-low rates for a “considerable time”; a pledge that encourages [..]

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