The USD/JPY confirms the lack of FX investor excitement concerning the massive rally on Wall Street. The USD/JPY moved sideways showing indifference to a surging S&P.

Even though Japan’s Core Machinery Orders experienced a hefty decline, the number came in better than analyst expectations. Therefore, investors are questioning whether the Japanese or U. S. economy is performing better right now. If Japanese data continues to beat expectations while U. S. disappoints, then we could witness a return to the negative correlation between the USD/JPY and S&P futures.

Rate follows GBP in two-way action, holding support now above the 1.2720 area. Aggressive traders can add to open longs on this dip but BE CAREFUL as volatility is just huge. Test of today's lows likely at this point but traders note big names on the buy side on dips under the 1.2600 and 1.2620 area.

Upside stops likely cleared at the overhead resistance at 1.2720/30 area now with stops likely the other side. Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week.

Rate two-way and recovers after a marginal new low into support overnight. 23 year lows in sight but the rate is attracting bids. Reversal off weekly lows a positive technical but the volume needs to come up and I think the shorts have yet to bail as a group.

Likely an upside rally is still in the works but the rate needs to rebound hard to wash-out the shorts again. After yesterday's action I think both sides will take a break. Traders report stops in-range adding for two-way action. Long-term tech resistance now at 1.5000 area likely to cap near term but stops are building above and the 1.5000 handle is a big psychological number.

Volatility was the rule again today but USD action was not as pronounced as yesterday's whipsaw and the USD ended mixed against the majors to finish New York today. Most of the majors ended after testing important S/R areas and finishing the other side suggesting that the USD is continuing to top around current levels. Ending near the highs after a pullback during the day was GBP and EURO. GBP rallied to hold the 1.3800 handle after scoring highs at 1.3841 suggesting that the low-volume dip to the
1.3550 area overnight was a bear-trap.

The USD/JPY confirms the lack of FX investor excitement concerning the massive rally on Wall Street. The USD/JPY moved sideways showing indifference to a surging S&P. Even though Japan's Core Machinery Orders experienced a hefty decline, the number came in better than analyst expectations.

Therefore, investors are questioning whether the Japanese or U. S. economy is performing better right now. If Japanese data continues to beat expectations while U. S. disappoints, then we could witness a return to the negative correlation between the USD/JPY and S&P futures.

The Pound has depreciated against the Dollar over the past 24 hours despite the enormous rally in U. S. equities on Tuesday. The nationalization of Lloyd's bank is obviously not sitting well with investors. The BOE is treading water playing with nationalization and quantitative easing since the approach has proven unsuccessful in the past.

Hence, investors continue to punish the Cable. To make matters worse, Britain reported a Trade Balance below expectations, revealing that the economy continues to import far more than it exports. A negative Trade Balance is normally highly negative for the home currency.