WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

US Market Open – February 12, 2016: Rhetoric and Rumor Feeding Yen Volatility

Posted by Marge Maresca on Feb 12, 2016 7:51:21 AM



Overnight Events

• USD/JPY trades 111.60-113.02 and rumour mill in overdrive
• BoJ Gov Kuroda – Mkt moves excessively risk-averse  
• Kuroda out of line with  fundamentals, won’t hesitate to ease more
• PM Abe advisor Honda – BoJ emergency meeting possible – Nikkei
• Japan FinMin Aso – Recent FX moves sudden, “rough”
• Aso will take appropriate  action if needed, no comment on intervention
• EUR/USD offered but orderly-Plays 1.1265-1.1334
• DAX up 1.5% and DB shares near 10% higher
• Brent 3.8% firmer at 31.20, Crude 3.6% higher at 27.16
• Barclays cuts USD/JPY end Q1 forecast to 100
• DE Flash Q4 GDP 2.1% y/y vs 1.7% (rvsd 1.8%) prev, 2.3% exp
• UK Flash Q4 GDP 1.5% y/y vs 1.6% prev, 1.5% exp
• EZ Dec Ind Output -1.3% y/y vs 1.4% prev, 0.8% exp

Today’s events

An expiring FX option heading into the New York Cut, if close enough to the strike price, can act as a magnet for selling/buying.  If the option is large, it can generate enough trading to move the market.  

Option Expirations(Source:ThompsonReuters)

• EUR/USD:  1.1245-50 (715M) 1.1300 (629M), 1.1340-50 (879M)
• USD/CHF: 0.9795-0.9805 (396M) USD/JPY: 113.50 (809M)
• EUR/GBP: 0.7650 (840M), 0.7750 (1.4B), 0.7850 (838M)
• AUD/USD:  0.7070 (478M), 0.7200 (738M)
• USD/CAD: 1.3850 (1.1B), 1.3900 (590M), 1.4000 (422M)

Chart – (Source:ThompsonReuters)

EUR/JPY growing risk for 121.96 Fibo  
EUR/JPY faces mounting risk for a deeper drop to 121.96, the 50% Fibo of the 2012-15 rise (94.12-149.79). But medium-term bears need a monthly close below 128.52 (38.2% Fibo of same range) to reinforce the underlying bearish structure. In March-April 2015 and this Jan, that level broke but bears failed to get such a monthly close. 14-mth momentum is becoming increasingly negative, highlighting the possibility of it finally happening this month. The drop below the previous 2015 low at 126.08 adds to the negative picture. Only a move back above the 128.52 level would make the picture brighten a bit more. Chart:

Economic Data(Source:Bloomberg)





Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

Browse our frequently asked questions and find your answers right away.

Access to the educational lessons, webinars and platform walkthroughs.


Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!