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USD/JPY & EUR/USD Daily Commentary 2.23.09

Discussion in 'Fundamental Analysis' started by FastBrokers, Feb 23, 2009.

  1. FastBrokers

    FastBrokers New Member

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    [/B]The USD/JPY is making notable progress in its uptrend, briefly setting new 2009 highs. Therefore, it seems this present rally could have legs. However, the USD/JPY did back away after touching the psychological 95.00 mark in a sign of hesitation. We advise caution when using the USD/JPY and S&P correlation for the time being. The USD/JPY is on a path of its own right now. Since the Japanese economy is faring worse than any other economy in reaction to the global crisis, the Yen may not be viewed as a safe haven anymore. Furthermore, the BOJ may need to implement quantitative easing to weaken the Yen so the Japanese manufacturing sector can stay afloat. Therefore, investors could be pricing in the upcoming monetary shock. We will keep a close eye on the USD/JPY to see if it can continue its impressive ascent. Considering the 2009 highs were broken, we maintain our positive outlook. Fundamentally, we find resistances of 95.02, 95.53, 96. More


    EUR/USD Daily Commentary for 2.23.09
    Even though the EUR/USD posted impressive gains Friday on large volume, the currency pair was unable to close above our 1st tier downtrend line and is weakening further Monday morning. The EU region still faces major problems in regards to its financial exposure to floundering Eastern European economies. Therefore, the Euro is finding less relative strength against the Dollar as compared to the Pound. One needs to look no further than the EUR/GBP, which continues its precipitous decline. The ECB will certainly need to lower rates at its next meeting considering the central bank kept its benchmark rate unchanged last time. As a result, investors are pricing in what should be a sizable monetary shock. Since the EUR/USD could not punch through our 1st tier downtrend line with 2 more tiers waiting, we maintain our negative outlook on the currency pair. More

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