Yen breaks out as market nerves ease | Vantage FX

Yen breaks out as market nerves ease

February 11, 2015

We’ve been harking onto our readers to watch out for the potential breakout of the USDJPY in the last two market wraps. And now it has happened. The timing may be a little surprising as the breakout happened during the European session and was not driven by news or events. The rally can partially be attributed to the easing of safe-haven needs as the gap between Greek and EU leaders are narrowing. Once USDJPY rose above 119.20, buy stop orders rushed in and pushed the level to a new day high of 119.60. The Yen may depreciate to former highs at 120.80 and 121.80.

Gold remains under $1240 per ounce as the Fed’s first rate hike is closer and market fears on Europe fade. The medium term outlook will be bearish if US economic data keeps up its strength. The 1220 support will be the next target of bears.

As the market entered the week with less important events, the consolidations of major currency pairs continue. The Euro Dollar tried to fall below the bottom of recent two-week sideway at 1.1270, but failed again. The pressure on Euro remains heavy. Personally, I feel the support may not hold for long, considering the fundamental factors have been changed.

Back to stock markets, the Shanghai Composite rebounded by 1.5% to 3142. The Nikkei Stock Average slid 0.36%. Australian ASX 200 lost 0.25% to 5801. In European markets, the UK FTSE was down 0.12%, the German DAX bounced 0.85% and the French CAC Index gained 0.96%. US stocks broadly gained as Greek government and EU showed willingness to compromise. The S&P 500 closed 1.07% higher to 2069. The Dow rose 0.79% to 17869, and the Nasdaq Composite Index surged 1.3% to 4788.

Not much major data will be released today. Australian Home Loans will be out at 11:30 AEDST. Market participants may wait for news from Eurogroup Meetings.

Have a great trading day!

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