The G-7 statement from earlier in the day seemed rather soft, repeating the stance of free floating currencies and by not naming Japan specifically, allowing the country to proceed with pro-growth, anti-deflation policies. At least as long as they are not officially trying to weaken the yen.
And now, a G-7 official said that the statement was misinterpreted, and that it does actually criticize Japan in a way. So, after EUR/USD and USD/JPY made gains, they are now reversing sharply. The statement signaled concern about excessive moves in the Japanese yen.
EUR/USD already climbed from the lows of 1.3360 to 1.3466 and is now back down to 1.3412. Support is at 1.34. Resistance at 1.3486. For more, see the EUR/USD forecast.
USD/JPY made another attempt on the 94.40 line (en route to the magical 95) before reversing and falling all the way to 93.25 and now back up to 93.75. If you’re trading USD/JPY or any yen cross, there is certainly plenty of action. For more lines, see the USD/JPY forecast.
The volatile moves continue. We will probably get more action towards and ruing the G-20 meetings towards the weekend.
Further reading: Forex Analysis: EUR/USD Tentatively Stalls Bearish Correction
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