By Expert Panel 10.05.2013
By Chris Tedder, Research Analyst, Forex.com
A flood to the USD and away from the yen generated an earthquake in the boarder market. USDJPY punched through 100.00 after better than expected US jobless claims figures caused investors to curb beats on the duration of QE3. From here, we are watching a resistance zone from early-2009 around 101.45 and then another barrier for the pair around 102.85. AUDUSD smashed barriers around 1.0150 and 1.0115, causing investors to cut expectations for further easing from the RBA.
A break of parity may elude the aussie for now, given the strength of support around 1.0050 and 1.0000. However, we can see further AUD weakens in the long-term. In fact, we have been AUD bearish for quite some time, and if the walls around parity fall in the near-term then we may see price action replicate the massive sell-off of April and May last year. See: Is AUDUSD heading below parity?
The sell-off in the yen had implications for Japanese equities, with the Nikkei surging higher as pressure eased on Japanese exporters. The combination of Abeconomics and a weaker yen, which is largely due to Abe’s push for looser monetary policy in Japan, has propelled the Nikkei around 60% higher since it first looked like Abe would make good on his plan for extreme monetary policy easing.
Technically, the Nikkei 225 is testing a key resistance zone from mid-2008. At the same time, the index is venturing into overbought territory, although there is still some room for upside movement according to the RSI. As a result, we may see some downwards action, possibly after a period of further gains.