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Forex Trading: New York Market Summary

Posted by Joseph Trevisani on Apr 23, 2013 6:03:00 PM



EURO

The euro opened the US session at 1.2997 (8:00 am ET) after trading a range of 1.3084- 1.2973 in Asia and Europe. After testing the highs on the back of stronger than expected French PMI the euro quickly reversed on weaker German and eurozone PMI. The currency found support at 1.2973 (1.2974 is the 50% fibonacci retracement of the 1.2746, 4/4/13--1.3202,4/16/13 move) and 1.2962 is the April 7th low and subsequent bottom.

The euro struggled to gain momentum above 1.3000 as several top tier banks announced they believed the ECB would cut 25 bps at the next meeting especially as input prices showed a sharp decline. However the euro bounced sharply off the lows after a think tank announced that BOJ would reaffirm its commitment to 2% inflation and with euro/yen stops triggered the euro/usd reached 1.3028 before traders took opportunity to re-establish short positions below 1.3040.

Bill Gross the head of Pimco, one of the world's largest fixed income management firms, added to the downward pressure on the euro when he tweeted that he expected an ECB rate cut and that the euro should be sold.

Chart Bloomberg

ScreenHunter 1019 Apr. 23 17.44

ScreenHunter 1020 Apr. 23 17.45

YEN

Usd/Yen started the US session at 98.89 (8:00 am ET) after trading in a range of 99.39 to 98.49 in the two prior sessions. After a slow start the Yen strengthened as stops triggered on weak China PMI forcing the Dollar/Yen down to 98.49 and euro/jpy to 127.87 just before the New York open. Eurozone and German PMI data was poor as well.

The move reversed on news of a think tank report stating that they BOJ will reaffirm its commitment to 2% inflation and the Yen weakened as model  accounts cut positions. The Usd/Yen rallied 100 pips almost in a straight line to a high of 99.53 before consolidating lower at 99.30. Then a hacked AP wire service report that there had been an explosion at the White House drove the Dollar/Yen to 98.65 but within minutes it rebounded as AP advised of the compormised account and a false story.

Chart: Bloomberg

ScreenHunter 1021 Apr. 23 18.11

 

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