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The JPY made strong gains against a basket of currencies

Varengold Bank Research Team from Varengold Wertpapierhandelsbank AG at 11/26/09


Today, we will have the JPY on focus while Japanese government leaders made comments, which caused a 14-year high of the JPY against the USD. Anyways, we wish you a nice Thursday and good luck in trading.

Market review

The JPY made strong gains against a basket of currencies after speculation that Japanese monetary authorities will tolerate further appreciation of the nation’s currency. The JPY climbed to a 14-year high against the USD after Finance Minister Hirohisa Fujii said that the government needs to take action on “abnormal” currency movements. Earlier, Vice Finance Minister Yoshihiko Noda said the government isn’t considered to step into the currency market. The USD/JPY reached a low at 86.30, which was the lowest level since 1995. The AUD/JPY also fell after the currency pair reached a low at 79.57, which is around its support level from the beginning of the month. The NZD/JPY fell for a third day in a row and reached its cheapest price since September 3rd after it dipped over 150 pips. The USD fell also against the EUR after it broke the highest price from the end of October while gaining to a high at 1.5144. Demand for the Japanese currency also climbed as the USD loans remained cheaper than those in the JPY. According to British Bankers’ Association data, three-month JPY London interbank offered Libor stood at 0.301 percent yesterday, which is higher than the 0.256 percent rate for USD loans.


Since the 10th of November, the GBP/NZD has been moving inside a bullish trend channel. After trading around the lower line of the channel for the fourth time, the market pulled up and reached the upper line of the band and the horizontal resistance around 2.3100. If it doesn’t break the resistance line, it may pull down towards the lower line of the bullish trend channel


As you can see, the EUR/GBP is trying to leave its middle term bearish phase with a break trough the strong horizontal resistance level around 0.9060. After it reached a low around 0.8830 on November 17th, it started to gain inside a bullish trend channel. If the market will break trough the horizontal line constantly, it may start a new middle-term bullish phase.

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