Yen weighed down by intervention threats

The aussie tops the performance charts once against an hour into North American trade, advancing more than 1.2% against a weaker US dollar. Markets are back on the offensive today with risk appetite surging in European trade as investors remain hopeful ahead of the G20 meeting this weekend. Speculation has been circulating that the G20 may push for the IMF to increase its lending capacity to ensure the access to liquidity and stem the threat of contagion. The AUD/USD broke above the 61.8% Fibonacci extension taken from the October 4th and 12 troughs at 1.0240 in pre-market trade before encountering resistance just ahead of the 76.4% extension at 1.0330. A topside break here eyes subsequent ceilings at long-term trendline resistance dating back to the August 1st high, currently at 1.0350 and the upper bound trendline of the ascending channel dating back to October 4th. Support now rests at the 1.0240 backed by the 50% extension at 1.0170 and the 38.2% extension at 1.0010.

Key Levels/Indicators

Level/Indicator

Level

100-Day SMA

1.0463

50-Day SMA

1.0235

20-Day SMA

0.9894

2011 AUD High

1.1079

The yen has come under increased pressure as a surge in risk appetite saw the yen pair yesterday’s gains early in the US session. The USD/JPY pair broke back above the 23.6% Fibonacci extension taken from the September 9th and October 12th crests at the 77-figure before encountering resistance just ahead at 77.40. Again we take note that this rally in risk has been rather substantial with concerns of a more prominent correction building. Interim support now rests at the figure with subsequent floors seen lower at the convergence of the 38.2% extension and the 50-Day moving average at 76.80 and the 50% extension at 76.60. Yen advances are likely to be limited however after a Japanese Government official announced that the isle-nation is set to unveil now steps against further appreciation in the yen. Topside resistance holds at 77.40 backed by 77.70 and 78.15. Note that the 100-day average holds just higher at 78.26.

Key Levels/Indicators

Level/Indicator

Level

100-Day SMA

78.26

50-Day SMA

76.83

20-Day SMA

76.71

2011 JPY High

75.94

Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.

Twitter: @MBForex
WEB:
www.DailyFX.com

About the Author
Michael Boutros Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.
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