By CountingPips.com
The U.S. dollar and Japanese yen continued to reign supreme in the forex markets this week as investors chose to put their bets on the side of these two safe haven currencies. Risk aversion was again the dominant
Greece’s continuing financial woes as well as new concern about the debt levels of Portugal and Spain dragged down European stock markets and their currencies, bringing the euro to multi-month lows against the USD and JPY. The possibility of China trying to cool off its streaking economy and the Chinese stock market being talked about as a potential bubble also fed doubts about the direction of the global recovery.
Higher-yielding currencies were affected by disappointing economic news out of Australia and New Zealand at the end of the week as Australian retail sales fell unexpectedly and New Zealand’s jobless rate hit its highest level in 10 years.
The U.S. dollar surged higher versus the euro for the fourth straight week as the euro (EUR/USD pair) fell to its lowest exchange rate since May 20th on Friday at the 1.3585 level. The dollar also rose for the fourth straight week versus the Swiss franc and Australian dollar while gaining for the third straight week versus the British pound, Canadian dollar and New Zealand dollar. On the other hand, the dollar fell versus the Japanese yen this week after gaining last week. The USD has now fallen versus the yen for four out of the last five weeks.
The largest gain for the dollar this week was against the British pound sterling with a 324 pip increase followed by a 183 pip advance versus the euro (see chart). The dollar also rose by over 150 pips against the Australian dollar.
The yen increased by over 400 pips versus the British pound (+452 pips) for the week and briefly touched a 10-month highpoint. The Japanese currency advanced by over 300 pips against the euro (+306 pips) and marked its highest exchange rate in almost a year.
The yen also rose by 227 pips against the Australian dollar, 188 pips versus the Swiss franc, 175 pips against the New Zealand dollar, 106 pips on the Canadian dollar and by 103 pips against the U.S. dollar.
Next week we can count on another interesting week in the forex markets with many major economic releases coming out. Retail Sales data out of the U.S., Germany, New Zealand and Switzerland will be released. Gross Domestic Product reports will come out of the Eurozone and the U.K. Employment data is due out of Australia and Switzerland while trade balance numbers will be released from the U.K. and the U.S.
Reminder: Free Forex Week at Elliott Wave International
Also, just a quick reminder that the free week at Elliott Wave is open until Wednesday, February 10th. There is access to the intraday analysis charts and also end of day analysis charts, both with forecasts and analysis. Jim Martens video analysis is included. For anyone interested in Elliott Wave Counts, this is a resource to see wave counts on current charts.
Go to Free Forex Week at EWI here.
Have a great weekend.
