The US Dollar outperformed most major counterparts and extended gains versus the euro to reach a new 9-month high after upbeat US housing starts numbers the previous day boosted the greenback.
The euro opened in Asia at 1.3318 and extended its decline to a fresh 2014 low of 1.3300. This is a key psychological level, which if broken to the downside will accelerate losses for the euro.
The dollar also gained against the yen to extend a rally from Tuesday when the greenback was boosted by stronger-than-expected US housing starts data. The July figure showed a strong rebound from June, signaling that the US housing market recovery was back on track after stalling in the second half of last year.
The dollar climbed to 103.25 yen, the highest level since April 7. Focus turns to the Fed minutes due later today, while Friday’s keynote speech by Fed Chair Janet Yellen will be the main driver of the dollar.
The pound weakened to a 4-month low of 1.6600 as markets await the Bank of England policy meeting minutes due later today. Weaker-than-expected UK CPI data on Tuesday has placed sterling under stress as lower inflation eases pressure on the Bank of England to raise interest rates.
The USD/JPY extended gains to 103.25 in early Wednesday trading. The bullish bias was strengthened after prices broke above 103.07, the July 30 high which was previous resistance. The underlying market structure is bullish above the daily Ichimoku cloud and above the key 103.00 level.
Other technical indicators reinforce the bullish bias – tenkan-sen and kijun-sen are beginning to turn positive while RSI and MACD are bullish.
There is scope for further gains to 104.10, the April 3 high. A break below the 200-day moving average at 102.35 would threaten the bullish bias.
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{{3|USD/JPY}} Gains Towards 104.00
ByXM Group
AuthorTrading Point
Published 08/20/2014, 03:22 AM
Updated 05/01/2024, 03:15 AM
{{3|USD/JPY}} Gains Towards 104.00
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