Online Forex Trading News

NEWYORK SUMMARY

Risk reduction was back in vogue as concerns over the US housing market, tensions over the capture of UK troops by Iran and increased oil prices weighed on global equity markets. In the currency markets we saw this reflected in continued weakness from Asia in the JPY crosses as USD/JPY breaks down from a bearish wedge formation on a four hour chart.

$ sellers gathered some early momentum when US durable goods orders came in weaker than expected at 2.5% vs. expectations of 3.5%. This contributed to further weakness in USD/JPY and we did see EUR/USD rally but the latter gradually ground lower throughout the NY afternoon, breaking 1.3320 area support. It seems the market may have taken the weaker US numbers as a cue to sell the JPY crosses rather than selling the $.

Interestingly, US Treasury bonds have not rallied in this last spate of risk reduction as they had before. While they were stronger early in the day, 10 year Treasury bonds finished the day lower to yield 4.62% as 4.5% area proves key support. Should we see yields continue to increase, we could see this translate into a bid in the $