The BOJ's intervention re-affirmed a much needed boost for USD bullish institutional players in the foreign exchange market. The timing could never be better as the registered low for USDJPY at the 76.28 was pre-WWII levels, although the much anticipated intervention finally gave through in line with the SNB move the day before the intervention. Much to the surprise which normally would take the BOJ a weekend action, but the pressure from the inner circle of the ministry and corporate exporters have proven to add more to the market pressure with the price levels.
Asia market have proven to be a little more lenient as it waited for the North American Sessions to come forth and made its follow through price movement for the USDJPY reaching the 80.22 chart resistance levels before making it corrective move lower to its current price at 79.41 as of this writing. That prompted the directional trend for the GBPUSD, EURUSD to retreat back down to 1.6285 & 1.4151 low respectively.
Such moves have spilled over the EURGBP cross rate as predicted to the 0.8671 ( real close from our objective at the 0.8660 dated Market view Analysis on Aug.02" Bear Sentiments for EURGBP Cross vs. USD". The probability of an attempt to the May 05 low of 0.8610 would be made. However, remember no such prices do move straight down or up without any play in between supports and resistances.
The highlight that we would like to emphasize is that no amount of technicals would be able to determine market factors currently overwhelmingly influencing the market place. Over-bought/sold areas, Oscillators, and other techn tools are mere guideline to use but would not a real determining factor for final decisions as most are aware that they are most lagging behind market prices. Due diligence on Market Behavior and price actions may well prove to be more useful without the bias charting analysis and positions on trades at times.
Although, market forces play these price swings with no mercy to the underlying retail speculators when such occurrence happens a day before the end of the trading week. The force of the market price can best be gauge on the opening of the USDX today a the 74.41 from the previous day's closing price of 73.92 basis point. Of course, the closing prices were more taken by the negative reports on the US GDP and the overall sentiments of the market.
And with this said; it still does not change the overall sentiments of the where the biggest economy is heading to. With the unemployment figures may provide some directions and clarity. Again, not a lot are expected for tomorrow's figures.
However, the price movements alone have been significant as they already re-affirms our outlook and analysis from the Price and Trend reversal call dated the 15th of June 2011. The degree of trading difficulty is ever increasing that adds fierce volatility in the market, as price swings wider every day.
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