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Yen back on the bids in Asia, FOMC minutes – Key event

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 18, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The US dollar kept its bullish momentum intact in a data-deficient Asian session today, with all eyes focused on the upcoming FOMC minutes later in the day. The Japanese currency outperformed all the majors and staged a solid comeback from weekly lows versus its American rival.

    Key headlines in Asia

    French police in shootout with suspect in Paris

    Gold sits at 5-yr low, Dec Fed rate hike inevitable

    Dominating themes in Asia - centered on JPY, AUD, NZD

    The yen emerged the best performer so far among the G10 currencies and jumped back on the bids, as the JPY bulls stood resilient to the persisting broad USD strength. USD/JPY trades -0.11% lower at fresh session lows of 123.30. The major is seen correcting heavy correcting heavy gains booked yesterday after the US CPI report-backed rally to 123.50 levels. The renewed upward rally in the yen can be attributed to the latest news on Pairs shootout that unnerved markets again. Investors flocked to the safe-haven - the yen after worries resurfaced over Paris attacks after media reported shooting during police operation on northern part of Paris.

    While the Antipodeans trade mixed, with the NZD jumping back on the bids and extending its recovery from six-week lows reached post poor GDT dairy auction results. GDT price index showed a further 7.9% drop to $2,345 in average dairy prices, following the previous decline of 7.4% on November 3. While Aussie remains pressured near 0.71 handle as the ongoing rout in gold and copper prices continue to weigh on the resource-linked AUD. However, offering some respite to the Antipodes, China’s new home prices rose in Oct, which eased concerns over the country’s economic slowdown somewhat. China is the OZ economies top trading partner.

    The Asian stocks are seen wavering between gains and losses, with Japan’s benchmark, the Nikkei paring gains and now trades +0.30% at 19,686 while mainland China’s benchmark, the Shanghai Composite gains 0.17% to 3,611 while Australia’s S&P ASX index advances 0.29% to 5,133. Hong Kong’s Hang bucks the trend and loses -0.17% to 22,223.

    Heading into Europe & the US

    Nothing of relevance in terms of economic news for the EUR, GBP traders in the European session ahead, as the EUR calendar remains absolutely data-empty.

    Hence, the attention now shifts towards the North American session, with the Fed Oct 28 meeting minutes to remain the main risk event today. On the data front, US building permits and housing starts will be reported. Besides, FOMC Member Dudley is scheduled to deliver a speech in New York ahead of the US open.

    EUR/USD Technicals

    The Research Team at AceTrader noted, “Despite last week's rebound from Tuesday's low at 1.0674 to 1.0831 on Thursday, subsequent retreat and breach of aforesaid support signals the erratic decline from 1.1715 has once again resumed and consolidation with downside bias would be seen for weakness towards 1.0600/10, then 1.0585/90, however, loss of momentum would keep price above support at 1.0564 and yield a much-needed correction later. On the upside, only above 1.0831 would abort daily bearish scenario and risk would shift to the upside for a stronger retracement to 1.0894/98.”
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