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Market Session Recaps

Asia Session

Fri, Nov 16 2007, 07:01 GMT
by Forex.com Research Desk

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The final Asia session of the week saw Forex traders trying to make sense of the extreme volatility witnessed in the FX markets over the course of the last week.  With no top tier economic data on tap for the session to act as a catalyst for the next move,  the market looked to test established medium term technical levels.  The pairs most in focus once again were the high yielding JPY crosses following another sell off in New York equities, and the continued pressure these carry trades have faced over the past 24 hours.

The session began with crosses convincingly higher from their New York closes.  EURJPY spent the previous session slowly grinding towards immense medium term support at 161.00. Into the start of the Asia session, this level acted like a springboard, catapulting the high yielder through 161.50, and into the 161.80s area, helping it recoup a portion of losses from previous sessions.  AUDJPY enjoyed decent bids as well, helping the pair gain 70+ pips to deal in the 98.20 area.  Both rallying pairs helped keep their components above critical levels.  EURUSD held the 1.4600 mark in spectacular fashion, with rumors of a large bid near 1.4610.  AUDUSD also held its medium term support level of .8840, even after being tested several times.

In late session trading, the bankable trend resurfaced, as most currency traders once again looked to sell into carry strength, and did they ever.  Following the Tokyo fix, most of the carries seemed as though they were in freefall, plunging to lows.  EURJPY dropped 100+ pips, breaking the 161.00 support level and triggering large stops bringing the pair to lows near 160.50, and AUDJPY was back dealing around 97.00, a good 120 points from the highs.  Going forward, credit jitters will likely keep any upside move to the carry contained, and provide opportunities to continue to sell into rallies.  With London and New York traders gearing up to finish out another wild weak, 200 pips in some of the JPY crosses isn’t inconceivable.    

Upcoming Data Releases (London Session):

  • EZ: 0500 Trade Balance; Consensus 3.0B
  • SZ: 0315 Adjusted Retail Sales; Consensus 4.2%
  • SZ: 0315 Adjusted Retail Sales; Consensus 4.2%

Published on  Fri, Nov 16 2007, 07:04 GMT


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