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EURJPY Rises 0.45%, Extending To Multi-Year Highs Above 161.00

FOREX
  • Early greenback strength saw the USD index rise around 0.35%, briefly reversing the entirety of the post-NFP sell-off. However, the move lower for US yields in a flattening move prompted some renewed dollar weakness which has seen the USD index slip into negative territory approaching the APAC crossover.
  • However, further weakness for crude futures amid a bearish demand outlook has continued to weigh on the likes of AUD and NZD, the clear underperformers in G10 alongside the Japanese Yen.
  • USDJPY has been steadily grinding higher over the course of the session, with the pair probing the 1.51 handle heading into late US trade. The trend needle in USDJPY continues to point north. Last week’s gains resulted in a breach of 150.78, the Oct 26 high. This confirmed a resumption of the uptrend and has opened 152.20, a Fibonacci projection. Moving average studies are in a bull-mode position, reflecting the market's positive sentiment. Indeed, a solid bounce for the Euro across US hours has seen EURJPY extend the long-standing uptrend, gaining momentum above 161.00 and continuing to eat in to the steep 2008 sell-off. 161.52, a Fibonacci projection, has been pierced today which paves the way for further strength to 162.00 and 162.80, the 1.00 projection of the Jul 28 - Aug 30 - Oct 3 price swing.
  • EURUSD found support once more around 1.0660 on Wednesday. The low today was just 4-pips shy of pre-NFP levels at 1.0655, before the pair registered a not-insignificant recovery that brings the pair back above 1.0700. The current bullish condition in EURUSD remains intact and this week’s pullback is considered technically corrective.
  • Commodity weakness provided a more notable decline for some emerging market currencies on Wednesday, with punchy moves for the likes of USDCLP (+1.90%) and USDCOP (+1.60%) and a 0.80% advance for USDZAR.
  • Chinese CPI/PPI overnight marks the highlight for the APAC session where the market consensus is for headline CPI to dip back into negative territory. US Jobless claims and central bank speakers will dominate the rest of Thursday’s calendar.
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