The yen took a bite out of the rest of the foreign exchange market on Wednesday to cap off a strong month. JPY was the top performer while the pound sterling lagged. Aussie is the worst performer in early Thursday Asia after weaker than expected capex data. All eye turn to Thursday's release of the US Jan core PCE price index, expected unchanged at 1.5%. A new trade in CAD cross has been posted & sent to Premium subscribers moments ago.

A calm settled over markets in the past two weeks but if the moves in the US dollar and yen are any indication, more trouble could be brewing. A rally in the yen Wednesday preceded a 30 point drop in the S&P 500. The index finished on the lows for the second straight day.

Technically, there were breaks all over. GBP/JPY fell below the 200-day moving average and the February low. EUR/JPY also hit the lowest since September in a sharp fall.

Against the US dollar, the euro, GBP and Canadian dollar also broke the February lows as they erased the recent bounces. The pound was the biggest Wednesday loser amid snags in the Brexit deal flare up, particularly the Irish border.

Economic data wasn't a major factor as the estimate of Q4 GDP dipped to 2.5% from 2.6%, as expected. One concern was in pending home sales as they fell 4.7% compared to a 0.5% rise expected.

One refuge of the bulls is that Wednesday was month-end and that flows could skew the market moves. However, we remind them that they said the same thing at the end of January, only to be beaten up in the first month of February.

Looking ahead, the Asia-Pacific calendar is buys with several Japanese releases including capital spending, corporate profits, the PMI from Nikkei, consumer confidence and vehicle sales. Those will offer a solid look at the path of the economy.

Aussie is down across the board after private capital expenditure data showed firmes planned to spend AUD $84bn in 2018-19, vs AUD $86.5bn expected, while spending in Q4 fell 0.2% vs exp +1.0%.

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD still holds above 1.2000, but barely

Resurgent demand for the greenback put EUR/USD under pressure, although the pair holds above the weekly low. ECB’s cautious stance put some pressure on the shared currency.


GBP/USD tumbles to 1.3820 on dollar strength

GBP/USD has tumbled toward 1.3820 as the dollar gains ground across the board. US jobless claims beat estimates, while concerns mount about US tax hikes. 


Gold: Bulls looking to test hourly resistance structure

On a day where stocks have fallen and the US dollar has risen, the precious metals are under pressure again. The negative correlation between the S&P 500 and DXY is compelling and should be noted.

Gold News

Binance could be in trouble as European regulators are examining the exchange

Binance is reportedly under scrutiny for offering stock trading through cryptocurrencies even though other exchanges have done it before through the same platform, CM-Equity.

Read more

Biden’s ‘Green reset’ could be great for Silver

As top officials around the world convene this week for a “climate summit,” President Joe Biden’s administration is planning the most radical expansion of government’s role in the economy since FDR’s New Deal.

Read more