Currency Updates:
U.S. Dollar Trading (USD) the Japanese Yen once again dominated the headlines and moved most of the other majors with EUR/JPY dragging the EUR/USD higher. The G7 downplayed the recent moves in the Yen as just an overvalued currency returning to normal values. They did suggest the recent comments about Yen targets like Y95-Y100 was not helpful with such universal guidance from Japan counter to the G7 rules. Looking ahead, January Retail Sales forecast at 0.1% vs. 0.5% previously. Also US Treasury Secretary Speaks.
The Euro (EUR) the EUR/USD soared chasing the EUR/JPY higher and supported by the uptrend in the EUR/CHF. The major broke above 1.3410 and quickly moved to 1.3475 before fading back with some easing in the EUR/JPY. The EUR/JPY continued to be the most volatile in the market moving in a 200 pips but in a wild fashion up down up and finally down again reacting to comments out of the G7 and G20.
The Japanese Yen (JPY) USD/JPY shot above Y94 on the US treasury comments in Asian yesterday before falling all day and catching the market long ahead of the BOJ event risk tomorrow. So far in Asia Wednesday we have fallen through Y93 and still searching for support as profit takers are joined by short term speculators.
The Sterling (GBP) GBP/USD found support under 1.5600 and surged on GBP/JPY buying and EUR/GBP selling in the US session. The outlook is negative as major supports have been broken and the rallies have been sold into lately. Only a move above 1.5800 would stem the negativity towards Cable in the medium term. Looking ahead, BOE Governor King speaks and BOE Inflation Report released.
Australian Dollar (AUD) the Aussie reversed aggressively yesterday after finding support at fresh trend lows near 1.0230. The short squeeze has continued so far in Asia with stops being hit up to 1.0360. February Westpac consumer sentiment showed a surge of 7.7% vs. 0.6% previously and surprised the market. The negativity seen over the last two weeks has been linked to large EUR/AUD buying but this has slowed in recent sessions and last night reversed from 1.3100 resistance.
Oil & Gold (XAU) Gold stabilized at $1643 support before bouncing to $1650 with reports of a North Korean Nuclear test supporting the alternate safe haven. OIL/USD broke resistance at $97.00 and heading towards $98 a barrel the 2013 highs.
