The equity market was in full focus once again in the NY session and stocks got absolutely decimated. The S&P 500 slipped more than -6% and the Dow plunged more than 500 points to close just above the critical 8500 area. The volatility in stocks meant that most of the price action was concentrated in JPY crosses. USD/JPY fell more than -100 pips in NY trading to 97.60/70 while EUR/JPY was pummeled more than -125 pips to the 125.50/60 zone. EUR/JPY made a low just above 124.60 and hit the lowest point since November 2003.
EUR/USD saw modest price action overall as it remained in a very tight hourly wedge formation. Resistance lurks near 1.2900 while the 1.2800 area looks to be critical support. Expect a retest of the 1.2740 lows on a break lower, while above 1.2900 should see pretty decent strength. GBP/USD meanwhile sank to fresh lows and shed -75 pips in the session to a close near the 1.6260/70 area. Given the ever more aggressive rate cut expectations for the ECB and BOE, we would expect EUR and GBP to remain quite heavy here.
Upcoming Economic Data Releases (Asia Session) Prior Estimate
- 10/22/2008 23:50 GMT JN Trade Balance Total SEP -¥324.0B ¥600.0B
