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Market Wire Update: The Story Behind The Yen Spike

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Market Wire Update:


The Story Behind The Yen Spike

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The Japanese Finance Minister Hirohisa Fujii has stated that he is considering making contact with the U.S. and Europe in regard to Jpy valuations increasing. The Finance Ministry normally get what they want in regard to currency valuations.

Usd/Jpy was hit with a huge sell order that triggered a 100 pip drop in a matter of minutes, at the open of trade. There is nothing happening in the global markets that we can relate the drop to, outside of weak equity trade, that signals risk aversion, and therefore a stronger dollar, as stocks are sold and Treasuries bought. The yen story is obviously a huge player getting done whatever it needed, at a thin market momentum time.

Red Flag Economics: 
Clear

Dollar Index: The dollar index went into Neutral mode on 26th Oct and has held that trend since. The near-term path of least resistance is consolidation of new lows. A weekly close above 76.00 that signals buyers is a long way off. Swing Point: 75.90.

S&P Futures: The S&P futures market confirmed a Long momentum read on Nov 11th and has built a solid near-term support base around 1080. The 1110 area will be a major resistance point to battle next week. Swing Point: 1098

Crude Oil: There is still a very flat momentum read to crude oil trade, that has been in place since 6th Nov. The buyers at 76.50 showed themselves, after sellers were held at bay around 75.50. The 80.50 area is the topside number to breach. Swing Point: 77.25.

Gold Bullion: Gold signaled long on 3rd Nov and has easily held that mode. 1165 is near-term support, backing any long tests of 1200. As the market trades long gold as a hedge, it seems that the gold bugs will be happy. Swing Point: 1140.

Disclosure: No positions