The Aftermath of Forex Volatility

When heavier than expected news reports prevails before and after trading sessions expect increase volatility & price action. This occurred when Moody's rating agency have downgraded the UK one notch lower after Friday's trading hours that led the opening price in Asia to hit @1.5085 low and stayed within these price levels.

However, the opening price gaps occurred across the board, especially with the Japanese Yen reacted on the stance of the ADB Kuroda and that Prime Minister Shinzo Abe will appoint someone who shares his dovish position with regards to monetary stimulus is expected. While the Asian market opened @94.20 from the previous closing price of 93.40 then drove the prices to as low as 90.85 and currently working @91.93.

Other than the recent Italian elections, all eyes would focus on Fed Chairman Ben Bernanke as he would be making his congressional testimony for two days which would again make the market vulnerable to sensitive comments posing price swings in both directions. 

But as we have mentioned in our previous market analysis dated the 22 of February; a major correction was indeed expected in the first two days of this trading week. Whereas, the corrective strength of the JPY

Market Perspective: EURJPY & USDx

The major trend for the EURJPY cross rate is still intact as the bigger technical perspective on the chart is bullish. The rapid acceleration of the USDJPY behind the fundamentals of the Japanese Yen and strength of the EURO have fueled the the EURJPY cross strength.

Monetary easing from Japan and renewed policy makers in Europe have been the reinforcing factors supporting this trend. That is unless some newer policy changes would take effect or announced to reverse price action in the market. And the FOMC minutes have outweighed these two remaining reasons until a fresh incentive would either reinforced the resurging strength of the US Dollar or otherwise investors confidence on the US economy deteriorates. Knowing these reasons and analyzing market behavior in line with price action would provide a better glimpse as to which currency pairs would best suite market conditions that can deliver a reasonable potential for a trade.
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USD reacts to FOMC..

other currency review & analysis!

Increased volatility surged as the FOMC statements outweighed mixed reports from the economic sectors. As most traders were made aware that the Federal Reserve would slowdown or even stop purchasing bonds sooner than expected. This statement was the main catalyst as investors uncertainty prevailed in the market place prompting a slide in the US stock market. And the USD to rally which has influenced the Gold prices to mark a decline touching the all important support price @1555.07 levels. 

With that said, the USDx topped the 81.10 basis point and have shown a good deal of sustainable strength at these levels which we have anticipated would occur between the Wednesday through Thursday trading sessions. Momentum build-up emerged alongside with the volumes to push the US Dollar higher have made many market participants cover short USD positions. Daily trading sessions pullbacks are again expected until a considerable follow-through towards the end of this week's trading takes place. USD strength have shown it true colors! And now choosing the best currency pair to pursue the USD directional movement would be determined by way of tracking open interest and trader volumes during position adjustment.

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From the ailing man of Asia to the Rising Tiger!

Philippine Stocks has proven it!

That has been the mark that has led the Philippines to its current economic rally. Its macroeconomic stability, transparency on good governance through the accountability reforms in the Philippines. This has been done by the current administration which allowed it to finally take a head start on economic growth compared with its peers in the Southeast Asia region.

This has been seen by the  World Bank Philippines Country Director Motoo Konishi last February 5, 2013. The Philippine economy maintains a strong stance despite the global uncertainty. And with the recent growth report of 6.6% in 2012, have given a brighter future for growth as evidence of investment inflows shows. In today's stock reports, the Philippines Stock Exchange celebrates a new record high for the index registering a 6,620.72. Although, the benchmark index’s valuation of 19 times projected 12- month earnings is the highest, ever since Bloomberg began compiling the data in January 2006. Please continue...

Market Behavior ...

vs. Price Action
The ability to weigh trading analysis between economic reports and technical perspective has drawn a significant mark on price behavior in between the 3 major trading sessions. The upcoming reports on the European Consumer Price index would come earlier than the FOMC minutes that would provide a signal directly effecting the USD direction. Although, as the mid-week reports follows when the US Consumer Price Index would be compared with the German GDP report which would weigh more with the direction of the EURUSD.

Ahead of the market mid-week price action has given the USDx a daily signal of a probable pause as against a breakaway gap against all odds. Nevertheless, this should not discounted on a daily pullback and a retest of the continued strength towards the end of the week's trading will take place. Either way, Wednesday through Thursday sessions would provide a clearer picture. A Tug of War again appears to be in place

EUR & GBP fades vs. USD, EURJPY slips Lower

Interestingly enough, the USDx has been toying its price swings above and below the 80.05/10 for the past couple of trading days. The indecision for a follow-through have been seen by traders as a lack of interest while awaiting for some fresh initiatives from the upcoming University of Michigan Confidence report and the two day meeting with the G20 leaders in Moscow. Eurozone GDP figures continued to show the signs of recession as the EURUSD declines further to this writing.

Currently, the EURUSD is @1.3333 and the USDx is @80.43 intra-day price from yesterday's candle bar signifying that such corrective move from yesterday's high still has potential to move higher. USDx trades are prefered for now, since the price parameters are more defined within the risk trades taken. And using the 80.05/10 as the pivotal price point, momentum and the volumes on a day to day session.  As USD bulls would expect a better than expected confidence numbers today.
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Directional Trend remains...

with daily price swings as major corrections.

After a around of mixed reports, the dominating influence still has been ECB Mario Draghi's remarks that have pushed the Euro to decline last week and supported the US Dollar to recover above the 80.05/10 psychological resistance levels again.

The market's sensitivity to these news wire have made it more difficult for market participants to play the price swings that dominates the market place. Although, there were previous game changing signals that we mentioned prior to the price decline that we have seen with some of the majors & crosses, the present recovery has been more a relief and a spill over on the EURGBP cross has made a considerable rebound more appealing for bullish traders. A quick note of reference is that a major correction will always exist within a major trend but more so specially within a reinforced trend. Market sentiments remain strong for the bigger picture with a price reversal wide enough for others would call it as a trend reversal.
The EURUSD declined to a near low @1.3350 and currently @1.3435

AUD Perspective:

The latest report that Australian retailers have sold lesser goods for the month of December, thus missing most analysts' expectations. While consumer confidence was weaker in December keeping consumers to spend lesser has been the culprit for the weakness.The worse-than expected retail sales numbers shows a mixed economic outlook for Australia contrary to an encouraging trade report released yesterday.
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MegaTrade101.com - The Art of Trading the Foreign Exchange Market with Confidence - AUD Perspective:

Perception vs. Trading Analysis

Technical or Fundamental:
Whenever investor's confidence gains ground in the European community; there will always be something that may spook the markets related to political uncertainty in Spain & Italy. These market conditions have provided some well timed relief for the USD recovery and a gradual slide in the Euro. Which have led equally the same uncertainty with investors and traders whether the decline in the EURUSD can lead to what others have eagerly been waiting for.
The USDx opening price levels for the daily have made some significant recovery...