Fundamentals

The Week Ahead - Oct 10 USD/JPY - Dollar Yen, American Session - 10/10/08 USD/JPY Technical Analysis 10 October 2008 More USD/JPY

Irate rallies on stops but then falls back, close over the 50 bar MA likely to draw buyers but offers are absorbing so far. Higher Oil prices are underpinning and the first correction in Oil prices will likely take the EURO with it. "Buy on dips" mentality active which means stops will be rolled up in range and the potential for a stop-driven rally is high. Look for support on dips near the 1.5550 area. Longs likely to have rolled up stops under the 1.5650 today so volatility possible. Looking for selling pressure at the London fix today.

Data due Friday: All times EASTERN (-5 GMT)

2:45am EUR French Consumer Spending m/m 0.4%

3:30am EUR German Manufacturing PMI 53.3

3:30am EUR German Services PMI 54.0

4:00am EUR Manufacturing PMI 50.5

4:00am EUR Services PMI 51.7

5:00am EUR Italian GDP q/q 0.2%

USD/JPY Daily

Comments

Rate is firming up and the late sellers are likely in. Traders not model accounts buying USD in Asia so likely their stops will drive trade off the lows and into the 103.70 area near-term. Upside will continue to be labored but a retracement is coming. Traders note that the market continues to trade technically and expect stops to be run in both directions near-term; Day traders continue to get a lot of opportunity as the rate will likely cover a lot of the same ground twice on the hourly time frame. Resistance at 104.80 area remains significant now and rallies should be sold.

Data due Friday: All times EASTERN (-5 GMT)

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