Forex Video | New York Session Review | December 3, 2008
Saturday, September 12th, 2009
A record-low US ISM services figure failed to discourage equity markets, which rallied during the hour following that news release during today’s New York session. The rise in stocks was accompanied by a drop in T-note futures, indicating an increase in risk appetite among global investors. In that scenario, the Japanese yen tends to weaken, which means up for the yen crosses. The EUR/JPY currency pair delivered, providing a classic trendline re-test before climbing 140 pips to the 200 ema on the 15-minute chart.
Duration : 0:12:58
Risk aversion had been the primary theme in global financial markets during today’s London session. An attempt by bulls to wrest control from the bears after the release of better than expected US news proved futile during the New York session. Traders who waited patiently for the post-news volatility to subside before shorting the EUR/USD currency pair, were rewarded with a profit of at least 90 pips before the London close.
Rising risk appetite has been the dominant theme over much of corporate earnings season. For the EUR/JPY currency pair, that has translated into an up day on 3 of every 4 trading days over the prior four weeks, and another up day was in the making at today’s New York open. The release of an awful US retail sales report changed that in a hurry. During the three hours after news, the yen managed to recoup its losses against the euro. A short trade setup, discussed some 30 minutes in advance, ultimately produced a profit of up to 100 pips for those traders who waited patiently for the post-news retracement on the euro yen.