30 Dec 2013
Session Recap: EUR/USD advances further while the USD/JPY feels vertigo
FXstreet.com (San Francisco) - The Dollar traded lower against most of its major competitors as low volume hurt the Greenback. However, the movements were limited.
The EUR/USD tested levels above 1.3800 again but the pair failed to close above it and it finished at 1.3795. Movement is significant as pair extended gains after Friday’s retracement from 1.3890. According to Valeria Bednarik, "hourly chart presents a slightly bullish tone as per price advancing above 20 SMA and indicators heading north in positive territory, while the 4 hours chart shows also a positive technical tone, with a break above 1.3820 required to confirm more advances."
On the other hand, the USD/JPY posted its first daily decline in 5 sessions. According to the latest CoT report, short JPY position on the IMM grew to $17.2 bln in the week of December 24, the largest since mid-2007. The USD/JPY traded at 5-year highs at 105.40 and it declined to close above 105.00 at 105.15.
According to the FXstreet.com Forecast Pool, there is not much fate in the USD/JPY bullishness: Yohay Elam from ForexCrunch expects "consolidation before another move higher in 2014." However, "The Fed taper announcement has taken the U.S. central bank a step closer to monetary policy tightening while the Bank of Japan is still in the middle of its 2-year easing cycle," comments AllThingsForex analyst Ilian Yotov. "The USD should be able to continue to benefit from such disparity of monetary policies."
The GBP/USD traded positive for fifth day in a row after advancing to 1.6530. However the pair lost momentum after the American opening and it closed just shy of 1.6500.
Main headlines in the American session:
US: Annual Pending Home Sales fall 1.6% in November
Dallas Fed index ticks up in December
The Fed givith and the Fed taketh away
Fed releases QE schedule for January
CFTC Commitments of Traders: Fresh highs in bets against the yen
Wall Street opens the week with a mixed note
The EUR/USD tested levels above 1.3800 again but the pair failed to close above it and it finished at 1.3795. Movement is significant as pair extended gains after Friday’s retracement from 1.3890. According to Valeria Bednarik, "hourly chart presents a slightly bullish tone as per price advancing above 20 SMA and indicators heading north in positive territory, while the 4 hours chart shows also a positive technical tone, with a break above 1.3820 required to confirm more advances."
On the other hand, the USD/JPY posted its first daily decline in 5 sessions. According to the latest CoT report, short JPY position on the IMM grew to $17.2 bln in the week of December 24, the largest since mid-2007. The USD/JPY traded at 5-year highs at 105.40 and it declined to close above 105.00 at 105.15.
According to the FXstreet.com Forecast Pool, there is not much fate in the USD/JPY bullishness: Yohay Elam from ForexCrunch expects "consolidation before another move higher in 2014." However, "The Fed taper announcement has taken the U.S. central bank a step closer to monetary policy tightening while the Bank of Japan is still in the middle of its 2-year easing cycle," comments AllThingsForex analyst Ilian Yotov. "The USD should be able to continue to benefit from such disparity of monetary policies."
The GBP/USD traded positive for fifth day in a row after advancing to 1.6530. However the pair lost momentum after the American opening and it closed just shy of 1.6500.
Main headlines in the American session:
US: Annual Pending Home Sales fall 1.6% in November
Dallas Fed index ticks up in December
The Fed givith and the Fed taketh away
Fed releases QE schedule for January
CFTC Commitments of Traders: Fresh highs in bets against the yen
Wall Street opens the week with a mixed note