Price Action Snap-Shot LIVE : Forex Cross Rates

CCy Insight & Price Behavior: USDJPY

Observing market action from the sideline has its benefits of being able to clearly see through the market's price volatility and investors market sentiments. The main market drivers can only be summarized into two segments, namely ECB Mario Draghi's rate cut decision and the much better than expected Non-Farm Payrolls report.

These two factors have contributed much of the market's price action where we have seen in the past, where a struggling battle between long and shorts positions before and after the data were released can be seen. Particularly with the USDJPY currency pair. With all said and done, price behavior from recent market squeeze and pricemovement, we have finally seen prices tamed with the USD continuing to dominate the overall trend moving higher from its previous key suppport levels identified @78.80 basis point. Especially so, when the DXY registered nearest to this support @78.93 basis point.



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CCy Insight & Price Behavior: USDJPY

Bottomline: NFP & Unemployment Rallies USD & Stocks

Economic Indicators vs. Market Sentiment & Activity indicators: Summary

On the back of shockingly weak Chicago PMI numbers have led the Euro to initially move higher during the earlier trading week above the 1.3150 and pushed the USDx towards the low nearest to the 81.30 basis point levels. Although, consumer confidence rose rose to 68.1 from an upwardly revised 61.9 in March. Economists had expected a reading of 60.8, according to a Reuters poll.

The market is generally convinced that the European Central Bank (ECB) will lower the benchmark rate by 25 basis points, which it did alongside the remarks by Mario Draghi on negative rates which analyst have stated that it was premature to talk about. And the market on the EURUSD have initially stalled as it has been widely expected and even yet have been built-in to the market prices for several days.

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Trading a USD decline vs. Majors & Crosses 2

The past week's trading after the BOJ moved aggressively with their combined monetary policy that triggered a rapid rise with the USDJPY and succeeding major reports coming from the US jobs data and ECB Mario Draghi's comments not to mention Fed Chairman Ben Bernanke; has made the forex market vulnerable in both directions. These are the major factors which the FX market has evolved in so far. No real market change as of now except that the market has maintained it posture within thier respective price parameters. Exept for the USDJPY, of course!

Relatively, our market call dated the 1st of April came through with the overall market price action at first glance favoring the USD because of how the Yen traded. But prices lingered thereafter with the US Dollar pullback lower and currently continuing to work @82.39 basis point to this writing.

In surviving a volatile market

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

FX Market Perspective l

Sequential Trades leading to NFP & Unemployment Data:
On the Fundamental stand point: the doom and gloom reports on job cuts in the news wires prior to today's much anticipated NFP numbers of 146,000 jobs added and unemployment data at 7.7% (lowest since 2008) beating market expectations have finally put most naysayers to silence.

The overwhelming & unexpected data from both reports have benefited the USD and investors risk appetite. Of course, there will always be a contrary and counterpart opinion in all this pleasant reports. Which in fact, only boils down to the Fiscal Cliff and the Fed's policy on whether adding additional asset purchases would continue to boost the US economy. With the news now out of the way, the focus would be the FOMC meeting heading into next week with a better looking labor market report. Weighing market sentiments comes into play once again will head towards how the technicals would paint the charts at the closing of this week's trading.

However, expect some relative corrections...

US Dollar Index & EURJPY CROSS LIVE - 11.09

Sequence of Market Analysis & ..

Price Behavior.

The culminating sequence of market analysis from the 18th of August 2012 have indeed showed that proper due diligence and carefully watching price / market behavior would go a long way. Although, no certain guarantees are made in any speculative trade decision except the probability of being able to spot a potential trade can only be justified after the fact.

And in supporting our video analysis dated the 7th of September, in fact has proven the point where the strength and spill-over of the Euro & Pound more specifically have touched its registered objective now @1.6130/40 range. While the Euro single currency reached beyond the 1.2880 and registered a daily high @1.2935 resistance price range. And have paused to take a breather while traders takes a careful watch on the other upcoming events for the week. 

GBPUSD as of 9.12

However, the relative correlated currency pairs with other majors and cross rates have primarily move in the directions expected of them and at the right pace for that matter. Momentum trading have paused as well as of this writing; prompting us to be able to write this article. Other currency pairs are carefully watching the forex leaders while taking a similar stance of some fresh news in the market. Current market posisitons have maximized it potential and shall likewise be settled regardless of the next market outlook. While others would still make their respective entry, we would be settling our score and book our net positive gains as a carry-over trade from the previous weeks. 

But one of the main highlights we have observed is the fact that a lot of negative bias for short-Euro traders have finally found the breather to accept the fact that the EURUSD have found itself more in the positive territory since ECB Mario Draghi announced his stance in supporting the Euro. And this is in spite of all the hype and challenges to do more from his most recent statements. In our overall analysis.... 

EURJPY - A Classic Tale

EURJPY DAILY as of 9.06

The statements made today by ECB President Mario Draghi has maintained the Euro in a steadier tone higher while the USDJPY have gained from the positive gains in the ADP job growth for private companies have increased by 201,000 new jobs for August.  

As a result, the Euro advanced to the 1.2650 registered high as of this writing and the USDJPY moved to 79.02 levels. Thus these two majors and market sentiments had spilled-over towards the EURJPY cross rate. And moved to the current price of 99.70; breaking away from the classic consolidation and follow-through movements from a low of 97.90 and a high of 99.00. Notice the period covered from the consolidation since August 17 until today's market price action from the reports.

As a matter of due diligence, the market potential in choosing the appropriate currency pair was the EURJPY, the GBPJPY cross rates versus the USDJPY; instead of the single-currency pairs. Why not the Euro? Well, the sensitivity of the market timing for the EURO while the ECB President Mario Draghi was speaking was more event risk compared to the cross and the USD vs. the Japanese Yen as the best correlated currency.

Please view charts below reflecting the correlation between the three majors pairs and how watch correlation becomes a cross trading opportunity with a well defined risk factor. Likewise, this defines the earlier statements made in reference to the consolidation pattern of a cuurency and its potential aftermath as to the market directional trend from a breakout period. Essential market timing is vital for this trading approach!

USDJPY DAILY as of 9.06

The market price reaction spilled over combining the two fundamental reports that led the USDx to hold its ground as the jobs numbers were higher than most have expected. This will likewise provide BOJ the necessary relief as to market intervention too close for comfort at the previous price levels as exporters have been suffering from a much stronger Yen.

The first line of resistance is slightly close to the 79.20 levels where the current high is registered at the 79.00/even levels. But we still have a few more hours and Friday's reports would be vital for the market direction. Expect the normal pullbacks as the last trading day for the week would end on a higher note since volumes and volatility would obviously increase in the next COT report by next week. Watch the GBPJPY as this also has a good market potential to check its market price behavior in relation with the Japanese Yen.



DXY vs. EUR & GBP

The vulnerability of prices influenced by Mario Draghi's comments still weighs in the market. However, the talks of Quantitative easing, continued crisis in Europe compared with the upcoming FOMC report,BoE rate decision and Friday's Non-farm payrolls number would again prove not only the vulnerability of analyzing the market's direction. But also how price volatility would occur during this week's reports.

Price action and market behavior's mix reaction have been due to these factors and would likely continue until a more defined direction would lead investors sentiments towards the Forex market.

Meanwhile, majority of market participants still weighed-in the Global Stock market as the Dow Jones continued working above the 13000 levels as expectations that the U.S. Federal Reserve and European Central Bank will provide stimulus to support the economies on both sides of the continent.

Although, the USDx have closed below the initial su;pport level of 83.05 by closing the previous week at 82.70 basis point; with the adjusted trendline support indicates that its closing price at the 82.70 has recovered at the opening of the trading day on Monday. Pls. continue at http://megatrade101.com/