USD/JPY Discussion

Japanese yen rose to new session highs against the euro and the dollar on Friday morning in New York after the publication of disappointing reports on consumer sentiment in the United States for the month of August. Report agency Reuters and the University of Michigan showed that the mood of American consumers are likely to have worsened in August compared with July. These data have contributed to the withdrawal of funds from riskier currencies and purchasing their yen, which Friday is used as a currency of refuge even better than the dollar. Investors are reducing positions open in the calculation of the restoration of U.S. economy. The volume of such items has increased due to expectations created after the data on employment in the United States for the month of July. Now traders are likely to feel that their optimism was premature. The pair dollar / yen has fallen to its lowest level in more than a week - 94.42, while a pair of Euro / yen has fallen to its lowest level in two sessions - 134.41. As U.S. stocks falling in price, and the tendency of investors to the risk of weakening, more profitable assets lose won earlier position. A pair of Australian dollar / U.S. dollar fell to intraday minimum 0.8383. Prior to the start of the New York session, a couple went up to 11-month maximum of 0.8476. The pair euro / dollar has recently fallen to a sessional minimum of 1.4231. On Friday morning in New York, a pair of Euro / dollar traded at 1.4233 on EBS system against 1.4282 on Thursday evening. The pair dollar / yen traded at 94.52 against 95.36. The pair euro / yen traded at 134.53 against 136.24. A pair of British pound / dollar traded at 1.6539 against 1.6572, and the pair dollar / Swiss franc traded at 1.0718 against 1.0702. Japanese currency is rising throughout the New York session. In doing so, its growth against the euro and the dollar accelerated after the consumer price index in the United States for the month of July. The consumer price index in the United States in July, declining the fastest annual pace since 1950. This indicates that inflation is not a threat to the American economy and the Fed / Fed / USA, which will likely hold a key interest rate and yield of the dollar low.

The dollar is increasing in European bid on Thursday, restoring a minimum of three weeks to the euro, thanks to a fixed profit on short positions in anticipation of the announcement the meeting of the European Central Bank and the release of data on employment in the U.S. economy.

Support for the dollar today has Chinese Deputy Foreign Minister He Yafei, who expressed hope for a diversification of the international monetary system, but noted that it is not heard that Beijing lodged a request for discussion of reserve currencies at the summit of Group of Eight, which will be held in Italy next week, reports Reuters. The representative of the Ministry of Finance also reported Reuters that Russia has not seen such a request of China.

Traders adjust short positions on dollar before data on employment in the U.S. economy outside the agriculture sector, say analysts.

By 14.27 Moscow time the euro fell 0.57% to 1.4066 dollars after 1.4202 dollars to the growth of the previous day. The index of the dollar, reflecting the value of U.S. currency to a basket of six major world currencies, rose 0.51% to 80.040 p.

By the yen the dollar was stable in the region of 96.64 yen, the euro depreciated by 0.5% to 136.00 yen

Stocks fell sharply, but the Nasdaq index has avoided the day of distribution, the index fell by NYSE volume growth. (Review by 17 August).

The market ended its band of continuous growth on Friday and showed "distribution day." Nasdaq fell by 1.2% on Friday and 0.7% in the week after the growth at 1.1% the previous week. This is a nervous action, and the type of graphics Nasdaq led to reflections on the beginning of the consolidation of the market. Meanwhile, the indices of NYSE and S & P 500 on Friday fell by 1% and 0.9%, respectively. Dow fell 0.8%. All indexes broke four lanes of continuous growth. Volume rose and fell on the NYSE Nasdaq. Thus, the increase in volume at NYSE, along with significant losses have created a clear "time sharing" on the NYSE-related indices.

Yet it was the day of distribution, deserves comment.

Technical power outages may have distorted the volume on Thursday on the NYSE,

denting technically amounts to a comparison of the two sessions. However, it is brought to account

four days of distribution for the S & P 500 and the other three major market indexes.

Does this mean that now the market upward trend is under pressure? Else

No, but one or two days, with a clear allocation of circumstances it would be

enough to turn the light on the traffic lights on the market green to yellow.

Action on Friday was very quiet among the leaders of growth.

There was virtually leaders who grew up in the quick sale, and some fell in

a large extent.

Some of the losers have been associated with China's shares, are able to move

together with the general movement of the Chinese market, where the Shanghai index has fallen by 3% in

Friday.

Chinese largest operator of Real Estate (real estate market) and for the first time

placed the shares in the 2007 E-House Holdings (EJ) fell by 0.68 to 21.66 in nearly double

volume.

This decline took place despite the increasing rate analysts Oppenheimer & Co. on

E-House shares to "buy." Stocks are now at 27% of 17.08 - the point of purchase.

Manufacturer of electric transformers Jinpan International (JST) plummeted to 6.67 to

30.52 in the six-average.

Thread traded share has gone below the 50-day moving average.

The manufacturer of electric motors Harbin Electric (HRBN) fell 0.49 to 16.53 in almost

double the amount.

Action has recently found support at its 50-day time line.

These Chinese stocks, however, are not the best on the market, stocks

set of higher quality.

The current upward trend in the market exposed to the Chinese leaders to share best

fundamental and technical ratings. They have not shown any alarming

action on Friday.

This action, such as a manufacturer of jewelry products of mass market

production Fuqi International (FUQI), a software developer Longtop

Financial Technologies (LFT) and Internet search engine operator Baidu (BIDU), all

adjust to a small volume - indicate that institutional investors,

not dumped their shares.

News on Friday included the disappointing data on consumer spending and

consumer mood, and that scared the markets.

However, Bloomberg reported that, according to specialists JPMorgan, economic

recovery will be in the form of "V-shaped", opposed to the less optimistic

representations regarding the type of "economic recovery".

IBD 100 fell 2% Friday and lost 0.9% as a result of the week.

The expectations and forecast: I personally, as opposed to professionals JPM, see recovery

economy in the "L-form, namely in relation to long-term and fatal weakness in consumer demand in the United States, and yet because the government and the Fed is almost done little to resolve the problem.
So I think that it is likely the beginning of a deep and long-term downward correction in U.S. stock market, which will reach at least 50% reduction from the current 5-month growth and will take at least 2-3 months. Perhaps the first movement we've seen in falling markets, 14 August - probably will be another attempt to increase - it is unpredictable. But it seems to me almost physically shown how difficult the market (stock market dollars) given to each new movement up to current levels - the market as a "boned under its own gravity" - and this requires a permit - in the form of correction.

Latest Helpful Charts 4 Those Who Care

14.08.09.
Friday for stock «bulls» fails. NASDAQ failed at 1.19%, S & P 500 fell 0.85% and the DJ - at 0.82%. European stock platform also finished the day with losses. Past week and the stock markets and commodity markets finished with losses - this is the first time in more than a month.

It is difficult to find the true causes of what happened. Here and summer with his thin market, and the approximation of the period of payments on loans, which are typical for the end of the fiscal year ending in September. It is difficult to assume that not only Russia's corporate sector will need the U.S. to repay loans in that currency. Yet, of course, we look forward to a semi-annual period, the repatriation of yen. Other markets have been fairly overbought, but not very good statistics in Friday's done it.

A preliminary value of the index from the University of Michigan consumer sentiment in the U.S. for August was 63.2 against 69.5 in the forecast, the previous value of 66.0. Thus, the index value is reduced the second month in succession. This calls into question the early restoration of the American economy, which is based on household consumption.

Unpleasant picture of the consumption of added indicators of consumer inflation, which signals the development of the U.S. economy deflationary processes. The consumer price index in the United States in July was 0.0% per month, which is fully consistent with the projection of its previous value was 0.7%. It also became aware of the decline in CPI by 1.9% per year, a month before the fall of 1.4% per year. The consumer price index excluding prices for food and energy rose in July to 0.1% as compared to June, the previous index value of +0.2% for the month. In relation to the July 2008 core CPI gained 1.5%, previous figures were 1.7%.

Slightly priobodril only indicator of industrial production, which in July added 0.5%, the forecast was +0.4% and the previous index value -0.4%.
On the morning of Monday, the stock traded platform for losses, futures on U.S. stock indices have lost about 0.8%, commodity prices continue to fall. On the foreign exchange market continued to purchase low yen and U.S. dollar.

Japan has already accounted for in GDP for 2 months. It became known that the country's economy grew for the first time in five quarters thanks to a sizeable infusion of government, as well as increased demand for Japanese exports. In quarterly terms, growth in the Japanese economy was 0.9% versus expectations of 1.0% and in years - 3.7%. In the 1 quarter of the outcome of economic growth was -3.8% in the annual and quarterly terms - -14.2% annualized.

Expectations

Today we expect out of the euro area external trade, as well as the New York manufacturing index. TICS's done a picture out of United States.

Forecasts

We hope this week for a strengthening of correction, the reasons for this were still at the beginning of the review, also expect that Monday will continue the traditional practice for completion by Friday. Therefore, expect to see the dollar continue to strengthen slightly as the yen. In commodity markets expect sales to continue.

Official figures showed that Japan's economy grew for the first time since the beginning of 2008 in the 2 quarter of 2009, followed by data that Germany and France came out of recession.
The Japanese economy, the second largest in the world during the period of April-July rose by 0.9%. Last year GDP grew by 3.7%, after a serious fall in demand for automobiles, electronics and other goods. The drop in exports has not yet been completed. In the 2 quarter exports grew by 6.3% - the first quarterly increase in 5 quarters.
Significant role in rebuilding the economy of Japan played China - the biggest trade partner and the stimulation of demand from the government.
Tokyo continued a series of measures to infusion of money - including cash payments, to mitigate the blow of rising unemployment, which in July reached 5.4% in June, approaching the peak after the Second World War, 5.5%.
These news stories were not in a position to support the stock market, shares fell by 3.1% this morning, because of the decline in Wall Street and a stronger yen. Nikkei-225 index lost 329 points to close at 10 269.

The attention of investors is riveted to the data on an index of investor confidence in Germany. Economists predict improvement in numbers and stop the decline in fear of economic recovery. Yen falls against major rivals on speculation Japanese investors, and against a background of sales by importers. The dollar fell against the Australian currency. Growth in equity markets much ahead of the situation in the economy, and this implies that it might be coming down as the correction for the shares. Investors shunned risky opening positions. Major currencies continue to be traded in the newly-established bands.

On Tuesday morning, from the market we are seeing some correction to the movements on Monday. In stock sites Asia-Pacific region plagued by vague feelings, but most of the regional indices weakly positive. In commodity markets, most instruments added to the price of industrial metals are highly appreciable. Futures on the U.S. stock indices are also in the black. On the currency market seen weak sales of yen and U.S. dollar.

The growth of Japanese stocks provoked the strengthening of the dollar against the Japanese yen at the auctions in Asia on Tuesday, but the U.S. currency may resume its decline. Yesterday's drop in global stock indices has led many to believe that Japanese shares today, too, will fall. The dollar may continue to decline to 94.00 yen.Para dollar / yen could reach 93.50, if the data on the development of new homes in the United States today at 16.30 Moscow time, will be weaker than expected, that is, restoring the American economy is likely to continue until go slow.

Futures for crude oil rose in Asia on Tuesday, after falling on Monday to a minimum of 29 July. The contract for light sweet crude oil with delivery in September traded at 67.14 dollars per barrel, higher by 39 cents, than the price the previous day.
Raw Vrent in October went up by 3 cents to 70.57 dollars per barrel.
"Some people think that the correction was exaggerated, and now you can buy. But the uncertainty about global prospects are still holding prices at current levels," - said Ben Vestmor, economist, National Australia Bank. Oil is likely to remain in the range 65,23-67,90 dollars so far.
"Downward risks are greater, rising as the dollar is stable, as stock markets rise," - said Mark Perven, head of ANZ.

At the Asian auctions yen is becoming lower than dollar and euro, as the Asian stock sites made as a princeple the positive dynamics of Wall Street. Yen serves as a funding currency in a strategy carry trade. Dealers inform that Japanese exporters, the main force which can support the yen in Asia,has been not active this day, that's why it's hardly to believe in the ability of Japanese currency to find support. Maybe, only in that moment when the short-term players will start to record profits in long positions in pairs Euro / yen and dollar / yen.

so palerman what is ur position for dollar yen now ????

Daily indicators continue to cast a negative signal, and the dollar / yen remains only slightly above the support near Y94.19/05. The latter is the target of bears, and the break below will open the way towards reducing Y93.17/20 and Y91.75.


RES 4: Y98.88 maximum of 5 June
RES 3: Y97.74/79 61.8% from lower to Y101.44, a maximum of 7 August
RES 2: Y96.50/79 100-day moving average, a maximum of 12 August
RES 1: Y95.00/20 21, 200-day moving average, a minimum of 13 August

The current rate of dollar / yen: Y94.31

SUP 1: Y94.19 minimum of 17 August
SUP 2: Y94.05 61.8% of growth from Y91.75, a minimum of 29 July
SUP 3: Y93.17/20 76.4% of growth from Y91.75, a minimum of 22 July
SUP 4: Y91.75 least July 13

short @94.19 SL 94.41 TP 93.81

Apart from lisintg these fundamentals, maybe you could explain how they can help forecast what will happen with the yen pairs, I think that'd be really helpful. Because I have no idea what all of this means and how this affects the yen.

Things are looking very bearish to me for USD/JPY, my higher time frame charts are asking to go short, lower time frames are random as usual.....last time it jumped above from current levels, but now it looks like bearish momentum is building here.....cann't decide if it right time to go short but am definitely not going long.....maybe its just better to wait

What do you guys think right now technically??

These kind of news are not useful fundamental information. This is intraday stuff and come out only after the action has taken place. No future indication....please try to post info which may drive fundamentals in future.

I'd wait for a price to go up to the 94.40/50 area, wait for a reversal and short from there. My last trade was a short from 95.04 after the reversal at 95.28 and took profit at 94.15. So that's my plan for now. I dont like to trade against the trend. I'd say the overall trend is down, medium term trend is down.

Hi Tataoc....thanks for the chart The trend for UJ is definitely down but it has been trading in a range for many days now. I am having a feeling that this break may be quite substantial, it is because I can see bearishness on higher time frames (weekly) this time. I am also not sure to go for it right now as you too think it can move higher and then turn but I am also thinking of scaling out the positions. Lets see

i thing that USDJPY didn't find any problem @61.8 fibo level... Daily the trend is down...

I'm short @ 93.65 SL 94.53