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Yen gains ground vs majors.

Thu, Jan 15 2009, 02:28 GMT
by James Whyte

ForexAmericas

Market View:

Today the Dow finished down for the sixth day in a row after a decline in retail sales (-2.7%, more than double the forecast). The U.S stock indices are down about 9% over the last six sessions. With all 30 down stocks down the Dow Jones closes at -248.42 for the day and touches lowest level since December 1, 2008. In the news today was the release of the beige book showing; Retail sale remaining weak, particularly during the holiday season-despite the deep discounts. Most residential real estate markets continued to worsen as well. Manufacturing activity decreased (with few exceptions). Energy prices are down across the board, however an increase in raw materials to produce energy has increased. Oil closed lower after a jump in weekly inventories report. Overnight the European markets finished the day lower by about 4.72%.

In focus today:

USD/JPY: Risk aversion has been the driver in leading the Yen higher in the last days of trading. With the US data out this morning below forecast, driving the equity markets lower, the usd/jpy has definitely been affected by these events, touching a low of 88.59 in early NY trading. The pair has been on a steady decline after touching a high of 94.61 on January 6, 2009. Given the worries about the financials back in the markets, we should expect the Yen to gain momentum and take this pair lower. With a previous bottom from this morning, we see first support at 88.59 from there it’s a long way down to the 87.10-20 level last seen on December 17, 2008. On a bounce we see currently a resistance line at 89.50, but do not expect the pair to get there in today’s trading session.

Published on  Thu, Jan 15 2009, 02:33 GMT