Forex Day Trading Blog

The major currency pairs were trapped within very narrow ranges on Wednesday as markets awaited the outcome of the crucial Federal Reserve meeting being held in Washington DC. 

The Nikkei index had a solid tone during Asian trading with an advance of close to 2% which provided some dollar support as it attempted to extend gains against the yen. Most Asian bourses registered a more subdued tone which held back the US currency as USD/JPY stalled close to the 95.50 area and it drifted back towards 95 with a reluctance to commit additional funds. Read the rest of this entry »

The Euro broke higher against the dollar in New York on Monday on speculation over a more dovish Fed tone and a key feature again on Tuesday was strong buying support on any significant dips.  Choppy market conditions was also a key feature with a reluctance to hold aggressive positions ahead of key event risk. There were reports of institutional Euro demand while shorter-term players looked to trigger Euro buy stops on the upside.

The German ZEW business confidence index was marginally stronger than expected with an increase to 38.5 for June from 36.4 the previous month although there was a disappointing reading for current conditions. Markets looked for the data to trigger a break above important resistance in the 1.34 area, but EUR/USD was unable to push through and corrected significantly weaker. Read the rest of this entry »

The Nikkei index advanced firmly on Monday with gains of over 2.5% which helped stabilise dollar sentiment against the yen. There was still tough resistance above 95 and USD/JPY failed to a sustain a move above this level.

Trading ranges generally were extremely narrow for much of the European session with market paralysed ahead of the critical Federal Reserve interest rate decision due on Wednesday. There was solid EUR/USD buying support on approach to the 1.33 region while resistance levels were tough to break down on approach to 1.3350. Read the rest of this entry »

Volatility was again a notable feature in Asia as USD/JPY dipped sharply to lows around 94.50 from highs around 95.80. There was a palpable sense of fatigue in markets following wild moves seen during the week as a whole, but erratic moves continued. Tension was also an important factor ahead of a series of key events next week with the Federal Reserve statement on Wednesday a key focus.

Trading was relatively featureless ahead of the US open with the Euro tending to drift lower. There was a first-quarter Euro-zone employment decline of 0.5%, reinforcing the very weak labour markets and also reminding markets that there are still extremely serious economic vulnerabilities within the area.  Any Euro appreciation will exacerbate the loss of competitiveness for peripheral economies and there will be increased pressure for more decisive ECB monetary action. Read the rest of this entry »

Asian equity markets in general and the Japanese Nikkei index in particular were again a major focus on Thursday. After a brief respite from selling pressure, there was renewed and aggressive selling which pushed the Nikkei index to closing losses of over 6% with the index down 22% from its recent peak.

The dollar had managed to secure only a fragile recovery from the 95 support level and weakness in Asian markets quickly triggered fresh selling pressure on the US currency.  USD/JPY triggered substantial stops on the downside as a reported major option position was breached at 95 and the pair dipped sharply to lows around 93.80 late in the Asian session. Read the rest of this entry »