Negative US News Causes Further Carry Unwind
Thu, Sep 4 2008, 22:41 GMT
by Andrei Pehar
Several negative reports out of the US today triggered another sell-off in the GBP/JPY pair. Unemployment claims rose by 15,000 to 444,000, and the ADP non-farm employment change fell by 33,000. Crude oil inventories in the US fell by 1.9 million barrels.
This combination of news caused a 344.65 point sell-off in the Dow, pushing it below a key support level at 11363. The NASDAQ saw a loss of 74.69 points, and the S&P saw a 38.15 point drop, the largest since January. The GBP/JPY pair fell 721 pips, breaking a key support at 192.57, and also falling below its monthly 200 moving average.
All eyes now turn to the non-farm payroll numbers, which analysts expect to come in at -73,000, a decrease of 22,000 from the prior month. If the news fails to push us back above 192.57, which is now acting as resistance, then the door opens to further drops, which could potentially take us as low as 170.22, with support in the way at 182.04 and 176.77
