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Market Opinion

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Dollar/Yen under pressure.

Thu, Feb 5 2009, 00:47 GMT
by James Whyte

ForexAmericas

In the news: In today’s markets the main stories driving the U.S. Markets lower involved the financial sector, as more concerns about the TARP II arise, including the remainder of the toxic assets in the bank’s books. Also adding to the sell off is the fact that companies continue to take down first quarter earning expectations. Oil prices also traded lower today as oil inventories indicated an increase of 7.2m barrels in the last week. Refineries also mentioned they will continue to cut production and will extend the maintenance schedule. At the close the Dow Jones ended down -1.52% and back below 8,000. The economy also continued to shed jobs, as ADP report showed a loss of 522k (lower than expected) in the month of January versus a 659k (revised) in the month of December. Now we look to Non-Farm Payrolls on Friday to give us the accurate number.

USD/JPY: Today dollar/yen got a bit of confidence after the U.S. ADP and ISM data, but that was short lived as the equity markets turned sour for the remaining of the session on concerns about the banking system and the “bad bank” issues looking grim. The change in dollar/yen today was -.06% with a low of 88.83 and a high of 89.78, this pair remains in a tight range. Our chart from yesterday, showed a descending trend line coming in at 89.80/90 level which has shown to be a good level given the high was 89.78. After today’s U.S. Market’s results, we should see a retest to the downside in this pair. The next support level comes in at 88.80/90, just a few pips below the 23.6% Fibonacci retracement.

Published on  Thu, Feb 5 2009, 00:51 GMT