Article / 20 September 2016 at 23:34 GMT

US Market Wrap: The fuse is lit and BoJ is the TNT

FX Trade Strategist /


  • Japan: Merchandise Trade Report 2350 GMT 
  • US: Housing Starts-August (Actual -5.8% vs. July 1.4%) 
  • US: Building Permits Change-August (Actual -0.4% vs July -0.8%) 
  • US: API Weekly Crude Stocks Change (Actual -7.49 million barrels vs. previous 1.44 m/b)

USDJPY traders spent the New York session jockeying for position in a narrow 101.60-95 range ahead of the highly anticipated Bank of Japan meeting.

Whether the results are euphoric or dysphoric the result will be the same. USDJPY will explode. It’s only the direction that’s in question.

The single currency had a single mind. The bearish EURUSD sentiment continued throughout the day and it closed at the low. Not so for Sterling. GBPUSD touched a low of 1.2947 in the morning and then rebounded back to 1.2988.

The commodity bloc currencies had an interesting day. An early morning Kiwi rally ended abruptly when the Global Dairy Trade index rose only 1.5% against the previous 7.7%.

NZDUSD dropped to 0.7302 from 0.7356. USDCAD tried and failed on numerous attempts to take out resistance in the 1.3240 area and finished the day at 1.3211, where it opened.

Oil prices were volatile. They drifted to a low of $42.50/barrel around breakfast and then spiked higher on a Reuters report that the rumoured and still unofficial Opec price support agreement could last at least one year.

WTI spiked again at the end of the day on the API report of a 7.49 million barrel crude drawdown.

US equity markets finished virtually unchanged. The weak housing report was not a factor for traders who were content to remained sidelined awaiting Wednesday’s Federal Open Market Committee meeting. xxx
Looming large: The Bank of Japan's “comprehensive” review of its monetary
policy measures could easily steal the limelight from the FOMC: Photo: Flickr

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to
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Missed a day? Here’s what we had to say during our Asian session and our regular European Morning Markets, From the Floor and Mid-session Europe.


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