Hirose News|March 5, 2012 9:00 AM

FX Weekly Update

< Dollar/Yen > 

Yen selling has  continued due to the monetary easing of Bank of Japan and the trade deficit of Japan.  Trading positions of  short term speculators have been cut unwillingly, also, short covering of the other currencies against the Yen helped the Dollar/Yen's gain. Finally, Dollar/Yen reached a 81.87 high, the highest price since late May 2011.

Dollar/Yen does not seem to be going lower sharply,but we had better pay attention to the results of IMM Yen position of speculators as of  Feb 28. Net positions were short Yen of 1203 units compared to 17257 units of Yen  long as of  Feb 21. This means Dollar's short covering has already done so much.

Therefore, it is hard to think that dollar buying will continue  at the same speed in the future. The  speed of Dollar/ Yen's rise  is too fast, so natural consolidation for downside of the dollar should be seen in the near future.

Expected range    78.00-83.00  Dollar mixed. Possibly consolidation will be seen.


Last week, Eur/Dollar rose to 1.3486, but the Hourly Chart showed W top at around the 1.3485-86 level on Feb 25 and Feb29. When support for the Neck-line was broken, stop loss selling from temporary long players pushed Eur/Dollar down.

Greece's second aid package was agreed on Feb 21st; the immediate fear of Default went and  we saw heavy buying of Eur/Dollar. I honestly thought that Option trigger at 1.3500 would break with a likely rise to 1.36. But it failed ,and the temporary long position taking of Eur/Dollar has been forced to stop. The Greek Executive's ability to enforce these austerity measures will be very important but feeling generally have become more sceptical.

IMM Eur position of speculators as of  Feb 28 has decreased to 109674 units compared to 142159 units as of  Feb 21, but market sentiment has been turned at just below 1.3500. Eur Dollar lost it's ground as temporary long Eur positions created at or above 1.3350 were stopped out at below 1.3285. If 1.3113-15level is broken, Eur downside risk will be very high , so please pay attention  for this level.

Expecting range  1.2950-1.3350   Sell Eur on rally

Hirose UK cannot guarantee the contents of the website to be reviewed. The views contained in the [trading guide] are those specifically of the relevant trader only and are given as part of the trader's normal trading activity. These views should not be relied upon or interpreted in any way, whether inferred or implied, as a recommendation or advice given by Hirose UK or as having been authorised by any other person. Hirose UK has no authority whatsoever to make any representation or warranty on behalf of any legal entity and or other persons in connection therewith.