A German business climate survey came in above expectationsreversing the Euro and sending it higher.
A German business climate survey came in above expectationsreversing the Euro and sending it higher. The strong rally in the Euro broughtit closer to a major 50% retracement upside target at 1.3510. The overnightmove also erased Thursday’s negative tone which was triggered by a bad PMInumber.
The USD JPY rallied sharply overnight on speculation thatJapanese authorities might have intervened again in the foreign exchangemarkets. Although Japanese Finance Minister Yoshihiko declined to comment onwhether authorities intervened, Yen market players feel the Bank of Japan wasactive in the market. Some tradersbelieve that the reason behind the plunge was a rumor that Bank of JapanGovernor Masaaki Shirakawa may resign.
As mentioned yesterday in my Forex commentary this move bythe BoJ, should it prove to be true, was not a surprise, “The break back to 50%of the ‘Intervention Rally’ could be a buying opportunity for bullishDollar/Yen traders, but it is going to take another round of intervention toget the market moving higher. Since Japanese officials intervened during theopening of the Asian markets, traders will be watching tonight to see if theydo it again.”
Technically, the Japanese Yen was hovering around a key 50%level last night at 84.40 when the suspected intervention took place. Thesubsequent buying powered the Yen a little beyond 50% of the last short-term breakat .85.07. Upside momentum could take this market through the last main top at.85.93, thereby solidifying the start of the up trend.