Cable & Dollar/Yen Big Losers

Daily Forex Fundamentals | Written by DailyFX | Jan 22 09 13:47 GMT |

Funds - Once again the preferred trade in the overnight session was the flight to safety buying with the USD and Yen as the prime beneficiaries. Price action in EUR/USD and USD/CHF was less interesting with the latter pairs seemingly content on trading in a more consolidative fashion. However, any favorable price action in Cable or USD/JPY seen late Wednesday, was negated with the market content on using rallies as formidable sell opportunities to build on existing short positions. The overnight release of the much weaker than expected CBI Industrial Trends survey (-48 versus -39 forecast) did not help the Sterling cause with the data series putting in the lowest reading since July 1992. Attempts by Japanese Vice FinMin Sugitomo to curb the appreciation in the Yen by warning that the government was closely watching the currency markets and that “abrupt and excessive currency moves were undesirable” unsurprisingly failed to influence traders with the pair poised to retest and take out the key trend lows by 87.15 from December which were matched on Wednesday. Looking ahead, key event risk for the North American session comes in the form of US housing/building permits (605k and 610k expected) and initial jobless claims data (540k expected) at 13:30GMT along with the concurrent release of Canadian retail sales (-1.5% expected) and leading indicators (-0.6% expected). Later in the morning, we get the release of the Bank of Canada Monetary Policy Report at 15:30GMT. Techs - EUR/USD has been locked in consolidation mode following yesterday’s late session rebound and the market is confined to inside day price action thus far. Given oversold nature and ability to hold above key 78.6% fib retrace off the major 1.2330-1.4720 move, we retain a mildly bullish bias for Thursday. Key levels to watch above and below now come in at 1.2945 and 1.3080. USD/JPY has showed zero follow through off of yesterday’s bullish candle close and the pair looks set to retest the key matched trend lows at 87.15. Key levels to watch come in at 89.55 and 87.15. GBP/USD price action is quite bearish with the bullish dragonfly/hammeresque close on Wednesday nearly being fully negated today. Inability to break back above 1.4025 keeps downside pressures intact, and a retest of the recent trend lows at 1.3620 Is now favored. USD/CHF is trading marginally higher and the price action is bullish as the pair looks to put in yet another daily higher high and higher low. Next key topside resistance comes in at 1.1735 (12Dec low) . Only back under 1.1380 delays. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.