Forex Trading Live Update, Friday 15th June

by Joe Oliver, Forex Trading-Pips

The Japanese yen strengthened versus the US dollar on Friday, breaking out of a 6 day consolidation pattern after the Bank of Japan refrained from expanding monetary stimulus which has the effect of debasing the currency.Thursday’s price action in USD.JPY formed an Nr7 (Narrowest Range of the past 7 trading days), a price pattern which typically precedes a breakout move. A break of the recent lows during the over-night session triggered a number of stops orders, causing the dollar to plummet versus the yen.

JPY daily bars

JPY daily bars

The British pound initially weakened versus most major currencies early Friday following comments from the BOE before putting in a short squeeze recovery. Bank of England Governor Mervyn King said the bank may loosen monetary policy to stimulate the economy.  Two-year note yields approached a record low on the Governors comments dropping six basis points to 0.23 percent. Yield’s on the 10-year gilt fell six basis points, to 1.67 percent.

GBP 60 minute bars

GBP 60 minute bars

In other news, June consumer sentiment in US fell in early June to a six-month low on concerns about deterioration in the jobs market and the European debt crisis. The Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment fell to 74.1 in June from to 79.3 in May.

Traders are awaiting results from Greek elections due out this weekend. ECB president Mario Draghi has indicated that the Bank is on standby to keep banks flush with liquidity if Greece creates fresh financial market turmoil. Mr Draghi said “The ECB has the crucial role of providing liquidity to sound bank counter-parties in return for adequate collateral. This is what we have done throughout the crisis … and this is what we will continue to do.”