EURUSD in spotlight but don't forget the JPY

3 June, 2016

While the ECB conference on Thursday afternoon failed to provide any unexpected fireworks, the EURUSD still managed to decline down the charts and moved back to 1.11 after Mario Draghi reminded investors that policymakers are willing to take further stimulus action if inflation prospects do not improve. Overall and while the ECB President stressed the need for patience when it comes to the EU recovery and appeared slightly more upbeat about the current EU economic outlook, he did manage at the same time to also maintain a cautious stance that will spell to the markets not to get overly carried away by any recent upturn in EU economic data.

One interesting take from the Mario Draghi press conference was that the ECB President made what could be perceived as supporting comments about the United Kingdom remaining in the EU, stating a belief that there were mutual benefits to both Europe and the United Kingdom if the latter was to stay in the EU. This might raise the question to traders whether there might be a negative spillover to the Euro if the overall outcome to the EU referendum on June 23 results in a UK exit.

Traders will now await the eagerly anticipated NFP report for the United States later on Friday where any further confirmation that the Federal Reserve could raise US interest rates later this summer would most likely install another round of pressure for the Eurodollar.

If you take a look at the current market headlines you can see that all the attention is focusing on the ECB, FED, OPEC and possible Brexit however it shouldn’t be forgotten that the Japanese Yen has encountered a lot of volatility on the financial markets this week. Despite Japanese Prime Minister Shinzo Abe announcing a delay to a sales tax until at least 2019, the Yen has rallied aggressively against its currency partners.

In all honesty, the decision to delay the Japanese sales tax should have been seen as delaying fiscal reforms and should have weakened the Yen but it had the complete opposite effect. The USDJPY 111 to 108 over the previous three trading days, while the losses have been far more severe for the EURJPY and GBPJPY.One reason that could explain why we are witnessing the JPY jump against its major currency partners is due to a slightly weaker risk appetite from investors towards the equity markets, but one could only imagine how much more severe risk appetite could weaken if the EU referendum later in June did result in the UK exiting the European Union.

Aside from risk aversion and equity markets looking pressured, it is however worth pointing out once more that the USDJPY has found its gains limited after finding tough resistance once again at 111.Technical traders will remember the previous occasion recently where the USDJPY met sellers at 111 resulted in the currency pair suddenly falling off a cliff at and recent history might quite be repeating itself with the USDJPY dropping from 111 to 108 in the past three days. 


Source link  
Earnings vs. Interest Rates: who wins?

Global equity markets failed to resume any kind of strong rebound following Tuesday's surge. Asian equity indices are deep in the red today...

Global stocks gripped by risk aversion

It has been a turbulent trading week for stock markets as trade worries, global growth fears, Italian budget concerns and geopolitical tensions led to a deterioration in risk sentiment.

Dollar lifted by hawkish Fed minutes

Dollar bulls were back in action on Wednesday evening after minutes from the Federal Reserve's September meeting reinforced expectations...


Yuan firms on Dollar weakness

Global investors will likely remain on high alert throughout the end of the week to see if the largest market sell-off since early 2018 will...

EM currency weakness refuses to go away

Tuesday has seen stability in Chinese markets following a very nervous beginning to the new trading week yesterday. Signs of China market stability...

Yuan eases on risk-off sentiment

Financial markets have entered the new trading week on negative footing as a mixture of different market themes weigh on investor sentiment...


Risk assets under pressure from rates

Chinese equities took a big hit after traders returned from a week-long holiday. Efforts by the People's Bank of China to free more than $100 billion...

U.S. Treasury Yields boost the greenback

The U.S. Treasury selloff on Wednesday was the biggest story in the financial markets. This time it wasn't only the rate-sensitive two-year yields that marched higher...

NAFTA deal fails to lift global risk appetite

Global investors remained defensive on Tuesday despite the U.S. and Canada agreeing to a new trade deal ending months of uncertainty...


In the past 24 hours Bitcoin has lost -0.27% and reached $6476.48675239. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has gained 0.6352% and is now at $1.1587. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -2.52% and is now at $204.067114988. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets91%
2FXTMFXTM88%
3HYCMHYCM87%
4Alfa-ForexAlfa-Forex86%
5FxProFxPro85%
6FIBO GroupFIBO Group84%
7OctaFXOctaFX83%
8HotForexHotForex82%
9FXCMFXCM80%
10AvaTradeAvaTrade77%
  


Share: