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Data out of the US this morning has been mixed with initial jobless claims and durable goods coming in better than expected, while new homes sales numbers were discouraging. However, currencies have been bid since the US open with the USD under pressure on the back of stable equity prices and very good Euro demand cited from a number of major players.

MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES

Data out of the US this morning has been mixed with initial jobless claims and durable goods coming in better than expected, while new homes sales numbers were discouraging. However, currencies have been bid since the US open with the USD under pressure on the back of stable equity prices and very good Euro demand cited from a number of major players. Usd/Jpy has backed off from its highs after the pair surged overnight and into the US open to kiss the 200-Day SMA, before pulling back. The bid tone in the major has been attributed to more concerns over the North Korea nuke tests along with some broad based demand for carry trades, highlighted by price action in the Yen crosses today. The GM bond holders have reportedly accepted a deal that would have the US Treasury own 72.5%, the UAE 17.5%,and the bondholders 10%. Also in the news, there has been talk of more Fed action with the central bank upping its GSE backed mortgage purchases. The New Zealand Dollar is the strongest currency on the day, up some 1.65%, while the Yen is the weakest, down nearly 1.50%. US equities track marginally lower, while on the commodity front, both gold and oil are higher.

ANALYSIS OF SELECTED RATES

Usd/Jpy: The daily structure is still quite bearish and a fresh lower top is now sought out below 99.75 ahead of the next drop back below 93.85. Intraday studies are now showing highly overbought and we see the risks from here for a more significant pullback into the US session, after rallies kissed and stalled out by the 200-Day SMA at 97.20. The market has also now retraced the 50% fib retrace off of the 99.75-93.85 move along with the 38.2% fib retrace off of the more significant 101.45-93.85 move making current levels attractive entry to build on short trades. Position: SHORT @97.10 FOR A 95.55 OBJECTIVE, REVISED STOP @97.10.

Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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Joel Kruger publishes 6 daily pieces:

Tech Talk - A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)

Morning Slices - Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes Trade of the Day).
Monday-Friday (between 6:30am-7:30am EST)

Indicator of the Day - A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
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Cross Country - A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
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Monday-Friday (between 11:30am-12:30pm EST)

Daily Classical - A Daily Technical Overview of the Major Currencies.
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