25 Aug 2015
USD/JPY bulls losing the traction of the session
FXStreet (Guatemala) - USD/JPY is currently failing on the 119 handle and has penetrated down to session lows at the same time that the stocks are selling off.
Despite a better day for the US dollar and positive data in the US, USD/JPY has lost the traction it was making on the 119 handle and has sold off to session lows of 118.24 at time of writing. The volatility remains, despite a period of calmness after the sup rose cut by the PBoC.
However, as analysts at Brown Brothers Harriman explained, the PBoC were unlikely looking to do anything more than add liquidity foremost into the economy and their thoughts come second place when it comes to the poor stock market investors out there. "We think the rate cut is at least as much (if not more) important for liquidity management than for equity market sentiment, from a perspective of the PBOC."" There could be worse to come yet, as analysts at ING explained as well, underpinning strengthen the Yen.
PBoC actions
The PBoC cut the RRR by 50bps to 18.00% with additional cuts for individual sectors. The PBoC also cut the deposit rate by 25bps to 1.75% and lending interest rates by 25bps to 4.60%. The move supports risk sentiment and offers in the Yen accelerated from the mid point of the 119 handle.
US data events
We have seen the highest US Consumer Confidence Index since January coming in at 101.5 vs consensus 93.4. This was supporting strength in the dollar whilst better than expected Services PMI was arriving also at 55.2 vs. consensus at 55.1. New home Sales less were a disappointment though coming in at 0.507m vs 0.520m consensus. Looking ahead, tomorrow's data is full of key events for the US economy. We have the US Durable Goods as well as Fed's Dudley speaking.
USD/JPY downside playing out
Valeria Bednarik, chief analyst at FXStreet explained that In the 4 hours chart, the technical indicators have lost their upward potential after correcting the extreme readings reached on Monday, but remain well below their mid-lines, in line with the shorter term view.
Technically, Karen Jones, chief analyst at Commerzbank explained, "The rebound is indicated to terminate 120.30-1121.30 and this will leave the market exposed on the downside. Below 115.14 lies the 23.6% retracement of the entire move up from the 2011 low – this is located at 113.98. We do anticipate that the market will hold just ahead of here for some consolidation at least."
Despite a better day for the US dollar and positive data in the US, USD/JPY has lost the traction it was making on the 119 handle and has sold off to session lows of 118.24 at time of writing. The volatility remains, despite a period of calmness after the sup rose cut by the PBoC.
However, as analysts at Brown Brothers Harriman explained, the PBoC were unlikely looking to do anything more than add liquidity foremost into the economy and their thoughts come second place when it comes to the poor stock market investors out there. "We think the rate cut is at least as much (if not more) important for liquidity management than for equity market sentiment, from a perspective of the PBOC."" There could be worse to come yet, as analysts at ING explained as well, underpinning strengthen the Yen.
PBoC actions
The PBoC cut the RRR by 50bps to 18.00% with additional cuts for individual sectors. The PBoC also cut the deposit rate by 25bps to 1.75% and lending interest rates by 25bps to 4.60%. The move supports risk sentiment and offers in the Yen accelerated from the mid point of the 119 handle.
US data events
We have seen the highest US Consumer Confidence Index since January coming in at 101.5 vs consensus 93.4. This was supporting strength in the dollar whilst better than expected Services PMI was arriving also at 55.2 vs. consensus at 55.1. New home Sales less were a disappointment though coming in at 0.507m vs 0.520m consensus. Looking ahead, tomorrow's data is full of key events for the US economy. We have the US Durable Goods as well as Fed's Dudley speaking.
USD/JPY downside playing out
Valeria Bednarik, chief analyst at FXStreet explained that In the 4 hours chart, the technical indicators have lost their upward potential after correcting the extreme readings reached on Monday, but remain well below their mid-lines, in line with the shorter term view.
Technically, Karen Jones, chief analyst at Commerzbank explained, "The rebound is indicated to terminate 120.30-1121.30 and this will leave the market exposed on the downside. Below 115.14 lies the 23.6% retracement of the entire move up from the 2011 low – this is located at 113.98. We do anticipate that the market will hold just ahead of here for some consolidation at least."