25 Aug 2015
USD/JPY bulls failing at 119.00; where is this headed?
FXStreet (Guatemala) - USD/JPY is currently trading at 118.87 with a high of 119.08 and a low of 118.24.
119.00 was achieved on a comeback from overnight "look-twice" lows down at 116.16 on the back of severe market turmoil in European and US sessions. At one point, just before Wall Street's open, the Yen jumped almost two cents vs the greenback on a 1 minute stick.
However, there has been a relatively robust recovery in the global stock arena ( S&P500 futures are up 1.5% at tome of writing), as markets get a grip and begin to consolidate the volatility and aftermath of the stocks rout. However, Asian equities are opening lower in suit of US stock performances, where the DJIA (Dow) fell on an intraday record of 1100 points, seeing the Yen rally to the hilt. Finally, the Dow finished down 3.56%, the S&P fished down 3.94% and the NASDAQ-100 finished down 3.78%.
The greenback found some respite in weakness on the back of Lockhart signalling that the Fed remains on target for rate hikes to start this year, although later explain din a press conference that hikes will be gradual and not 25bps at each and every meeting.
Fed hike now at 50:50 this year
However, there is a 50:50 call in markets now that the Fed will hike this year and some are now forecasting that there cannot be a hike until much further in to next year while current global circumstances cannot be taken lightly, and a Fed hike could be a "nonsense" in an environment of global turmoil, uncertainty and more than half the components of the consumer price index have declined in the past six months at the same time that market expectations of inflation are now pricing in less than two percent annual inflation several years out.
Technically levels to the downside are 115.84, ahead of 112.56, 110.00 and back to 105.18 on the longer term range. Near term rallies are likely to struggle in this environment past 122.30 with 120 coming back in as the psychological level.
Total focus is now with the Shanghai Composite open today.
119.00 was achieved on a comeback from overnight "look-twice" lows down at 116.16 on the back of severe market turmoil in European and US sessions. At one point, just before Wall Street's open, the Yen jumped almost two cents vs the greenback on a 1 minute stick.
However, there has been a relatively robust recovery in the global stock arena ( S&P500 futures are up 1.5% at tome of writing), as markets get a grip and begin to consolidate the volatility and aftermath of the stocks rout. However, Asian equities are opening lower in suit of US stock performances, where the DJIA (Dow) fell on an intraday record of 1100 points, seeing the Yen rally to the hilt. Finally, the Dow finished down 3.56%, the S&P fished down 3.94% and the NASDAQ-100 finished down 3.78%.
The greenback found some respite in weakness on the back of Lockhart signalling that the Fed remains on target for rate hikes to start this year, although later explain din a press conference that hikes will be gradual and not 25bps at each and every meeting.
Fed hike now at 50:50 this year
However, there is a 50:50 call in markets now that the Fed will hike this year and some are now forecasting that there cannot be a hike until much further in to next year while current global circumstances cannot be taken lightly, and a Fed hike could be a "nonsense" in an environment of global turmoil, uncertainty and more than half the components of the consumer price index have declined in the past six months at the same time that market expectations of inflation are now pricing in less than two percent annual inflation several years out.
Technically levels to the downside are 115.84, ahead of 112.56, 110.00 and back to 105.18 on the longer term range. Near term rallies are likely to struggle in this environment past 122.30 with 120 coming back in as the psychological level.
Total focus is now with the Shanghai Composite open today.