Risk-on drives USDJPY to 98.33, Upbeat French and German GDP Lift Euro | IFCM
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Risk-on drives USDJPY to 98.33, Upbeat French and German GDP Lift Euro - 14.8.2013

US Shares last night closed in positive ground reflecting investors improved risk sentiment after US Retail Sales excluding auto sector rose by 0.5% in July, beating estimates of 0.4% increase. Asian shares followed at the same momentum with NIKKEI 225 advancing by 1.32% underpinned as well by Shinzo Abe’s yesterday comments that could cut corporate tax. The USDJPY has been in a bullish development rising to 61.8% Fibonacci level of 99.90 to 95.79, at 98.33. As of writing it spiked slightly above 98.33 and we would expect the pair to continue higher should it maintain ground above that key resistance.



The greenback value appreciated as expectations are increasing towards FED withdrawal from current $85B level of asset purchases in the next meeting amid more indications add that recovery is solid. In addition, corporate earnings have been in general stronger than projected reinforcing speculation of reducing bond buying program. The US dollar index rebounded to resistance at 81.84 yesterday on a 3-day surging buoyed by key support at 80.84.


In the European continent, cheerful GDP data kept coming as the French GDP figure displayed an increase of 0.5% up from expectations at 0.1% for the second quarter, beating previous quarter reading of -0.2% and becoming positive after 2-year time. Followed by German GDP report indicating 0.7% increase, above expectation of 0.6% expansion in the 2nd quarter and up compared to previous quarter 0.1% growth. The Euro against the greenback was well underpinned and recovered back to resistance at 1.3276. Against the British pound the Euro retraced to 0.8595 from 0.8556. Looking ahead, Euro-zone GDP release later today is likely to beat estimations further backing the Euro, also traders are focusing UK Job data.
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