WWM - Analytics

    WWM

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    US FX Market Open Monday March 21, 2016:  TOKYO HOLIDAY SAPS JPY ENTHUSIASM

     

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    Overnight Events

    • EUR/USD plays 1.1235-1.1285, USD/JPY 111.22-111.66
    • Cable soft as politics weighs: Plays 1.4375-1.4468
    • EZ Jan C/A s/adj E25.4bln vs EUR28.5bln rvsd prev
    • EZ Jan Net Inc Flow E45.6bln vs EUR89.3bln rvsd prev
    • Brexit could cost Britian GBP100 bil & a million jobs - CBI
    • RBNZ to investigate alleged leak of Mar 10 OCR decision
    • China Feb gasoline exports up 169.5% y/y, diesel up 587%

    USD/JPY
    • USD/JPY static as Tokyo holiday saps enthusiasm
    • Range has been a narrow 111.22-111.66 range
    • 539M worth of 112.00 strikes set to expire at NY cut
    • Recall 112.00 was an hourly high posted last Thu
    • 2 yard drop in CFTC net yen longs increases scope for falls in USD/JPY
    • EUR/JPY has fallen from 125.75 to hit 125.23

    Today’s events

    An expiring FX option heading into the New York Cut, if close enough to the strike price, can act as a magnet for selling/buying.  If the option is large, it can generate enough trading to move the market.  

    Option Expirations(Source:ThompsonReuters)

     USD/JPY
    • USD/JPY static as Tokyo holiday saps enthusiasm
    • Range has been a narrow 111.22-111.66 range
    • 539M worth of 112.00 strikes set to expire at NY cut
    • Recall 112.00 was an hourly high posted last Thu
    • 2 yard drop in CFTC net yen longs increases scope for falls in USD/JPY
    • EUR/JPY has fallen from 125.75 to hit 125.23

    Chart - GBP/USD bull trap weighs (Source:ThompsonReuters)
    GBP/USD risk is growing for losses down to tenkan line at 1.4284, a break and close below which will unmask the falling kijun line at 1.4186. Cable’s uneven recovery from 2016 1.3836 low posted in February was halted on Friday at 1.4514, one pip below February 16 1.4515 peak. Doji formed on Friday’s candlestick highlighted the indecision in the market. Heavy resistance of the thick cloud which currently spans 1.4444-1.4660 has led to the weakness on Monday. While there was upside breaks of 1.4475 last week - 76.4% retrace of the 1.4672-1.3836 fall – the failure to sustain the move above sets up a bull trap. Only a sustained trading above 1.4475 for a number of days will reassure bulls that they are in control. Chart: https://tmsnrt.rs/1pWguud

    Economic Data(Source:Bloomberg)

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