The strong JPY makes further gains against major currencies while the Asian stocks are falling. We hope we will be able to report better news during this week while we observe the influences on the FOREX market. Nevertheless, have a nice day and good luck in trading.
Market review
The JPY was close to its highest level against the USD in more than a month after Asian stocks slumped and the CIT Group, which is a huge U.S. commercial and consumer finance company, deferred interest payments on subordinated bonds because efforts to cover the payments have been unsuccessful. The MSCI Asia Pacific Index fell 1.8 percent, which was the biggest fall since August 17th, while the S&P 500 Index decreased 2.2 percent yesterday. The JPY tends to rise in times of financial turmoil as Japan’s trade surplus reduces reliance on foreign capital, while the USD benefits from its status as the world’s main reserve currency. The USD/JPY is under the 93.00 level after it touched a low at 92.52. It is still trading in a downward trend while it fell for a second day. The next technical support would be around 91.70 – 92.00.
The AUD gained for near a one-week low versus the USD after an Australian government report showed economic growth unexpectedly accelerated in the second quarter. The AUD/USD climbed back over the 0.83 level and touched a high at 0.8318. The AUD also climbed against the EUR after it rose to 1.7087.
NZD/JPY
Since the 21st of August, the NZD/JPY has been trading inside a bearish trend channel and a long the weekly Pivot points. After going over the 63.22 first Pivot support, the market reached the lower line of the channel and touched also the 62.40 Pivot support line. This might be a sign for an oversold market and a recovery towards the upper line of the downturn trend channel.
EUR/AUD
Since the middle of August, the EUR/AUD has been moving inside a slightly falling trend channel. As we can see, the market additionally trades clearly along the Bollinger Bands, after it always pulled back as soon as it touched a band. Currently it trades in the middle of the channel around the middle band and a downward support line. If it crosses these levels, it may fall towards the lower line of the channel and the lower Bollinger band.
