Mid-Week Forex Trading Outlook Shows Negative USD Sentiment.

Jan 12 ( Global-View ) Heading into the mid-week period, the USD is looking decidedly heavy. It appears that EURUSD bottomed late last week on the back of the poorer than forecast employment data. Now the USDJPY has unexpectedly turned south even after new Finance Minister Kan seemed to send signals that a 95.00 level in the pair is what official Japan would like to see. We take the wishes of Japanese officials seriously in forex because they usually get what they want over time. They have considerable financial resources at their disposal to make things happen. Japan also usually tends to favor a weak forex policy to help exporters, such as the auto industry do well. We have heard that the industry foreign exchange rate target levels for Japanese automakers are USDJPY 95 to 105. Current forex trading circumstances are difficult with the USDJPY heading down decisively while our fundamental side expects the JPY to weaken. In this environment, we like the idea of stepping aside until the technicals come into line with the fundamentals for this currency pair.