If you were looking for crazy market theatrics on this day in North American trade you were sorely disappointed as markets pretty much behaved in an orderly fashion. Even though the pall of a potential Greek calamity continues to hang over the investing world, you wouldn’t have seen the effects of it today. The EUR/USD remained between 1.07 and 1.08 and was largely driven more on US economic releases than anything else, and equities enjoyed a slow grind higher amid the constant noise of corporate earnings releases.
Despite the good US din enjoyed at the moment, the USD/JPY didn’t make much hay today. The 120 level seemed to act as a cap to any advances on the day and could potentially continue to act that way as we get closer to the end of the week. If we were to assume that risk of a Grexit were to become ever-present over the next couple of days, the USD/JPY could act in a safe haven type of fashion. That typically means that the JPY would increase in value and send the USD/JPY tumbling.
In addition to the potential fundamental reasons for a fall are the technical which shows that we are currently approaching the 61.8% Fibonacci retracement of the April high to low. Combined with the 120 psychological level, the Fibonacci guidepost may act as additional resistance on any attempts to advance. While I essentially made this same argument on the EUR/JPY yesterday on this site, that drop hasn’t yet come to fruition, and the potential Greek tragedy playing out over the next couple days isn’t likely to make anyone feel confident in holding risky assets.
Figure 1:
Source: www.forex.com
Recommended Content
Editors’ Picks
EUR/USD consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold extends rally to new record-high above $2,610
Gold (XAU/USD) preserves its bullish momentum and trades at a new all-time high above $2,610 on Friday. Heightened expectations that global central banks will follow the Fed in easing policy and slashing rates lift XAU/USD.
Pepe price forecast: Eyes for 30% rally
Pepe’s price broke and closed above the descending trendline on Thursday, eyeing for a rally. On-chain data hints at a bullish move as PEPE’s dormant wallets are active, and the long-to-short ratio is above one.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.