Forex: Yen Weakens on Election Concerns; Euro Lags on Higher Yields

RELATED QUOTES

SymbolPriceChange
EURUSD=X1.1170-0.0015
GBPUSD=X1.3072-0.003
USDJPY=X102.2960+0.403
^USDOLLAR11,963.21+7.20

ASIA/EUROPE FOREX NEWS WRAP

The Asia session today was perhaps the most exciting in recent memory, with the Chinese Shanghai stock index surging amid speculation that the new Chinese government would be more lenient towards stimulus, and the Japanese Yen sliding sharply amid comments from a key Bank of Japan policymaker. Overall, the mood of the day is uneasiness, with European and US equity markets looking higher, while bonds and currencies suggesting risk-aversion.

But the BoJ commentary is particularly interesting (with BoJ Deputy Governor Kiyohiko Nishimura saying the central bank was ready for action, when needed), especially with snap elections taking place on December 16, in which former Japanese Prime Minister Shinzo Abe is expected to reclaim his position following promises of unlimited BoJ easing. Seemingly, the role of the BoJ has become a focus point of the Japanese election, given the attention the failing economy has garnered over the past year. Should the US fiscal cliff/slope produce some positive headlines over the coming days, and if the European debt crisis stays on the backburner, then the Japanese Yen could remain weaker for at least through the end of the year.

Taking a look at European credit, peripheral bond yields are higher, underpinning Euro weakness. This price action comes as European equity markets have outperformed, but this has been the cast for the past few weeks: decoupling. As Senior Technical Strategist Jamie Saettele’s research suggests, equity markets are the last major asset class to react to news, while bonds and commodities lead (currencies trail just slightly but are well-ahead of equity markets).

The Italian 2-year note yield has increased to 1.891% (+3.4-bps) while the Spanish 2-year note yield has increased to 2.876% (+9.1-bps). Similarly, the Italian 10-year note yield has increased to 4.447% (+3.6-bps) while the Spanish 10-year note yield has increased to 5.355% (+13.8-bps); higher yields imply lower prices.

RELATIVE PERFORMANCE (versus USD): 13:05 GMT

NZD: +0.23%

CAD: +0.04%

AUD:-0.01%

GBP:-0.01%

CHF:-0.16%

EUR: -0.18%

JPY:-0.28%

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): +0.11% (-0.32% past 5-days)

ECONOMIC CALENDAR

Forex_Yen_Weakens_on_Election_Concerns_Euro_Lags_on_Higher_Yields_body_Picture_7.png, Forex: Yen Weakens on Election Concerns; Euro Lags on Higher Yields

See the DailyFX Economic Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators.

TECHNICAL ANALYSIS OUTLOOK

Forex_Yen_Weakens_on_Election_Concerns_Euro_Lags_on_Higher_Yields_body_Picture_6.png, Forex: Yen Weakens on Election Concerns; Euro Lags on Higher Yields

EUR/USD: Yesterday I said: “With price breaking 1.3010/20, I am indeed bullish. However, with 1H, 4H, and daily RSI all at or nearing overbought levels as the pair trades into its weekly R2 at 1.3100 and comes close to 2H’12 highs, there is likely some resistance ahead, if not scope for a pullback.” That has materialized thus far today. With a new high set, a close below 1.3045 would mark a daily Key Reversal, which would force us to switch our bias to bearish for at least for the rest of the week. Resistance is 1.3140/45 and 1.3170/75. Support is 1.3010/20 and 1.2880.

Forex_Yen_Weakens_on_Election_Concerns_Euro_Lags_on_Higher_Yields_body_Picture_5.png, Forex: Yen Weakens on Election Concerns; Euro Lags on Higher Yields

USD/JPY: More range-bound price action as the pair fights diametrically opposite fundamental pressures (US fiscal cliff and Japanese elections), thus leaving my levels and outlook at neutral to bullish now. Support comes in at 81.75, 81.15, and 80.50/70 (former November high).Resistance is 82.90/83.00 and 83.30/55.

Forex_Yen_Weakens_on_Election_Concerns_Euro_Lags_on_Higher_Yields_body_Picture_4.png, Forex: Yen Weakens on Election Concerns; Euro Lags on Higher Yields

GBP/USD:Fresh December highs for the GBP/USD were set yesterday as the pair broke through long-term trendline resistance at 1.6030/45 (descending trendline resistance off of the April 2011 and April 2012 highs), a point of failure on Tuesday and Friday last week. A break of 1.60308/45 also coincides with a tentative break of a downtrend that’s been in place for the past two months, off of the September 21 high. Resistance comes in at 1.6170/80 (late-October highs) and 1.6300. Support is 1.5995/1.6015 (20-EMA, 50-EMA), 1.5930/35 (100-DMA), and 1.5860/65 (200-DMA).

Forex_Yen_Weakens_on_Election_Concerns_Euro_Lags_on_Higher_Yields_body_Picture_3.png, Forex: Yen Weakens on Election Concerns; Euro Lags on Higher Yields

AUD/USD: The AUD/USD has been range-bound the past week, leaving my outlook unchanged since last Wednesday: “As the pair has traded towards its Symmetrical Triangle termination point, and appears to be making a move to the upside; when considered in the big picture, the current pause witnessed the past year or so may be viewed as a consolidation. Support is at 1.0370/1.0405 (trendline support off of the June 1 and October 23 lows) and 1.0235/80. Resistance is 1.0475/90 (November high) and 1.0500/15.”

Forex_Yen_Weakens_on_Election_Concerns_Euro_Lags_on_Higher_Yields_body_Picture_2.png, Forex: Yen Weakens on Election Concerns; Euro Lags on Higher Yields

S&P 500: Is the uptrend over? Although the rally off of the 61.8 Fibonacci retracement (June 2012 low to September 2012 high) carried the S&P 500 back into a confluence of resistance at 1400/10 (20-EMA, 50-EMA, 100-EMA), the measured move off of the low suggested a top at 1425 given the 61.8 Fibonacci extension off of the November 16 low, the November 23 high, and the November 28 low extension. Support comes in at 1386 (200-DMA) and 1345/50 (November low). A move higher eyes 1425, 1450, and 1460.

Forex_Yen_Weakens_on_Election_Concerns_Euro_Lags_on_Higher_Yields_body_Picture_1.png, Forex: Yen Weakens on Election Concerns; Euro Lags on Higher Yields

GOLD: Gold has fallen back off of its November and December highs near 1735, mainly on progress over the US fiscal cliff and demand for US Dollars amid the need to diversify away from the Japanese Yen. I still expect the 1700 area to be defended vigorously on declines, and will continue to look to get long as low as 1675. Resistance is 1735, 1755/58 and 1785/1805. Support is 1700 (breaking now), 1690/95 (100-DMA, November low), and 1660/65 (200-DMA).

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • Exclusive: Six U.S. senators urge Obama to prioritize cyber crime at G20 summit
    Exclusive: Six U.S. senators urge Obama to prioritize cyber crime at G20 summit Reuters - 5 minutes ago

    Six U.S. senators have urged President Barack Obama to prioritize cyber crime at this weekend's Group of 20 summit in China, in the wake of the theft of $81 million from Bangladesh's central bank, according to a letter obtained by Reuters. The … More »

  • FTSE underperforms Europe after long weekend Reuters - 13 minutes ago

    Britain's top share index was flat on Tuesday, supported by well-received results from Bunzl, but underperformed other European indexes as traders returned from a long weekend, with miners under particular pressure. Britain's FTSE 100 was flat at … More »

  • France, joining Germany, urges halt to Transatlantic trade talks
    France, joining Germany, urges halt to Transatlantic trade talks Reuters - 22 minutes ago

    Current Transatlantic trade talks should be halted and a new set started, France's trade minister said on Tuesday, adding his voice to German calls for an end to the negotiations. Matthias Fekl said he would request a halt to negotiations over the … More »

  • U.S. trade spokesman says U.S.-EU TTIP talks making progress Reuters - 22 minutes ago

    Talks on a free trade deal being negotiated by the United States and the European Union are making progress, a spokesman for the U.S. trade chief told Der Spiegel, contradicting the German economy minister, who said the discussions had failed. The … More »

  • EU to hand Apple hefty Irish tax bill - sources
    EU to hand Apple hefty Irish tax bill - sources Reuters - 26 minutes ago

    DUBLIN/BRUSSELS (Reuters) - The European Commission will rule against Ireland's tax dealings with Apple on Tuesday, sources familiar with the decision told Reuters, one of whom said Dublin would be told to recoup over 1 billion euros in back taxes. … More »

  • EU to hand Apple multi-billion dollar Irish tax bill: sources
    EU to hand Apple multi-billion dollar Irish tax bill: sources Reuters - 32 minutes ago

    DUBLIN/BRUSSELS (Reuters) - The European Commission will rule against Ireland's tax dealings with Apple Inc (AAPL.O) on Tuesday, sources familiar with the decision told Reuters, likely resulting in a multi-billion dollar tax bill for the U.S.-based … More »

  • Japan government - Mitsubishi Motors overstated fuel economy on eight more models
    Japan government - Mitsubishi Motors overstated fuel economy on eight more models Reuters - 44 minutes ago

    Japan's transport ministry on Tuesday said that Mitsubishi Motors Corp (7211.T) had overstated the fuel economy for eight additional models, and ordered the Japanese automaker to correct its readings. The announcement comes after Mitsubishi in … More »

  • Asian markets track Wall St higher, US jobs in focus
    Asian markets track Wall St higher, US jobs in focus AFP News - 48 minutes ago

    Asian markets rose on Tuesday, with Tokyo largely recovering from initial losses as expectations of a US interest rate rise and talk of more Japanese monetary easing pushed the yen down against the dollar. Bets on a rate rise this year have soared … More »

  • Japan's ANA says replacing 787 aircraft engine parts could take two to three years
    Japan's ANA says replacing 787 aircraft engine parts could take two to three years Reuters - 56 minutes ago

    TOKYO (Reuters) - Japanese carrier ANA Holdings Inc said on Tuesday it could take two to three years to replace engine parts for its Boeing (BA.N) 787 models with new ones. ANA said last week it needed ... … More »

  • Hanjin Shipping Lenders Reject Revamp Plans as Lacking (Correct) Bloomberg - 1 hour 25 minutes ago

    The restructuring plans fall short of requirements by creditors for them to help Hanjin Shipping, its main creditor Korea Development Bank said in a statement Tuesday. The company may still need 1 trillion won ($893 million) to 1.3 trillion won in … More »

  • Oil edges back in Asia after sharp losses AFP - 1 hour 32 minutes ago

    Oil prices edged up in Asia on Tuesday, a day after retreating on a stronger dollar, but worries about a global supply glut are keeping gains in check ahead of a key producers' meeting next month. Both ... … More »

  • Fintech platform Marvelstone Tech launches FundEast to help SMEs maximise profit
    Fintech platform Marvelstone Tech launches FundEast to help SMEs maximise profit e27 - 1 hour 32 minutes ago

    FundEast will help small and medium-­sized enterprises (SMEs) facilitate their trade transactions at rates that are more than what current solutions are offering Marvelstone Tech, a fintech platform under private investment group Marvelstone Group, … More »

  • European stocks stable at open AFP - 1 hour 45 minutes ago

    Europe's main stock markets steadied at the start of trade on Tuesday, as London returned from a long holiday weekend. The British capital's benchmark FTSE 100 index nudged 0.1 percent lower to 6,830.16 ... … More »

  • Vietnam says all will lose in any South China Sea war
    Vietnam says all will lose in any South China Sea war AFP News - 1 hour 53 minutes ago

    Vietnamese President Tran Dai Quang warned on Tuesday there would be no winners in any armed conflict sparked by territorial disputes in the South China Sea. The Vietnamese leader did not mention any country but there is growing unease over China's … More »

  • Oil prices rise as dollar comes off 2-week high
    Oil prices rise as dollar comes off 2-week high Reuters - 2 hours 2 minutes ago

    Oil futures edged up on Tuesday as the U.S. dollar backed off a two-week high hit the day before, although doubts that crude producers would agree next month to an output freeze continued to drag on prices. The U.S. dollar has retreated from … More »

  • Gold slips on firmer dollar; seen range-bound
    Gold slips on firmer dollar; seen range-bound Reuters - 2 hours 5 minutes ago

    "Gold remains range-bound within a descending triangle over the past month, with price action likely to remain fairly stable while inside this," Alex Thorndike, senior precious metals dealer with MKS PAMP Group, said in a note. Spot gold slipped … More »

  • Oil prices rise as dollar comes off two-week high
    Oil prices rise as dollar comes off two-week high Reuters - 2 hours 17 minutes ago

    Oil futures edged up on Tuesday as the U.S. dollar backed off a two-week high hit the day before, although doubts that crude producers would agree next month to an output freeze continued to drag on prices. The U.S. dollar has retreated from … More »

  • Livestream of Kim Dotcom extradition hearing a first for New Zealand Reuters - 2 hours 34 minutes ago

    A New Zealand judge gave permission on Tuesday for the hearing of German tech entrepreneur Kim Dotcom's appeal against his extradition to be streamed on YouTube, making it the country's first court case to be broadcast on the Internet. The six-week … More »

  • KKR’s Most Senior China Executives Exit as Firm Plans Fund (1) Bloomberg - 2 hours 38 minutes ago

    David Liu, head of China and co-head of Asia private equity, and Julian Wolhardt, a partner in the firm, are leaving at the end of this year to form a China-focused investment firm, the company said in a release Tuesday. Ming Lu, previously co-head … More »

  • Petrofac names former BG executive as CFO Reuters - 2 hours 38 minutes ago

    (Reuters) - British oilfield services company Petrofac Ltd (PFC.L) on Tuesday named former BG Group executive Alastair Cochran as its finance head. Alastair Cochran, who oversaw BG's integration with oil ... … More »

  • Asia stocks bounce, investors no clearer on Fed
    Asia stocks bounce, investors no clearer on Fed Reuters - 2 hours 41 minutes ago

    Asian shares bounced modestly on Tuesday as doubts the Federal Reserve would hike interest rates next month restrained the dollar, while investors continued to count on more policy stimulus elsewhere in the world. MSCI's broadest index of … More »

  • Yuan Bears Emerge From Hibernation as Fed Imperils G-20 Calm (3) Bloomberg - 2 hours 42 minutes ago

    Derivative markets are pointing to renewed bets on yuan depreciation, with a three-month measure of expected price swings poised for the biggest monthly increase since January. The increased pessimism comes after a period of calm that sent the … More »

  • Bunzl sees no material Brexit impact, first-half profit beats consensus Reuters - 2 hours 43 minutes ago

    Bunzl said it was difficult to know the probable impact of Brexit as the terms of Britain's exit from the bloc were unknown, but added that it did not expect any material impact as 85 percent of its business was currently based outside the UK. … More »

  • Iowa at center of debate over 'shadow insurance' deals
    Iowa at center of debate over 'shadow insurance' deals Associated Press - 2 hours 52 minutes ago

    For cash-strapped life insurance companies, the deal sounds almost too good to be true: A state law allows them to create complex financial instruments to transfer liabilities to new subsidiaries, instantly ... … More »

  • Hanjin Shipping Trading Halted After Plunge to Six-Year Low (1) Bloomberg - 2 hours 54 minutes ago

    The creditors made the decision after meeting Tuesday morning, Yonhap said, citing unidentified creditors and the financial regulator. Hanjin Shipping, South Korea’s largest container line, and Korea Development Bank, its main lender, declined to … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.1240.0000.00%
    N21.SI
    0.3550.0000.00%
    E5H.SI
    0.240.000.00%
    5ME.SI
    0.315+0.005+1.61%
    5OT.SI
    0.730.00-0.68%
    G13.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.55+0.12+27.91%
    BJZ.SI
    0.45+0.09+25.00%
    BFK.SI
    0.525+0.055+11.70%
    BQD.SI
    0.48+0.04+10.34%
    IX2.SI
    0.183+0.012+7.02%
    R14.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.13-0.02-13.33%
    5TI.SI
    0.20-0.03-13.04%
    AWI.SI
    0.176-0.024-12.00%
    A04.SI
    0.155-0.020-11.43%
    5WD.SI
    0.186-0.019-9.27%
    BTJ.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3618+0.0025+0.19%
    USDSGD=X
    1.5207+0.0001+0.01%
    EURSGD=X
    1.7804-0.0011-0.06%
    GBPSGD=X
    75.1240+0.207+0.28%
    SGDJPY=X
    5.6935-0.0089-0.16%
    SGDHKD=X
    2.9750-0.0003-0.01%
    SGDMYR=X
    9,747.0146-5.4893-0.06%
    SGDIDR=X
    4.9025-0.0118-0.24%
    SGDCNY=X
    1.0280-0.0019-0.18%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,324.20-2.90-0.22%
    GCZ16.CMX
    18.73-0.04-0.20%
    SIU16.CMX
    96.93+1.14+1.19%
    ^XAU
    2.070.00-0.12%
    HGU16.CMX
    47.36+0.38+0.81%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.18-0.06
    ^FVX
    1.57-0.07
    ^TNX
    2.22-0.08
    ^TYX