Session Recap: A cocktail of fear spurs the risk aversion

By FXstreet.com | July 10, 2014 AAA

FXStreet (San Francisco) - No, Argentina's qualifying for the World Cup final wasn't one of the bad news that hit market's confidence on Thursday. But the cocktail was mixed by the Portuguese Banco Espirito Santo missing a debt payment, weaker than expected data in China, Japan and France as well as FMI's call for more austerity measures in Spain.

"The reaction was to sell stocks, buy bonds, sell risk and ask questions later," commented Adam Button from Forexlive in a recent report. "Naturally, the yen was the beneficiary of the worries. USD/JPY fell a half-cent at the lows to touch 101.07 but bounced back above the late-June low to 101.31 which creates a less bearish picture."

The USD/JPY is closing its fourth negative day in the last five. Currently at 101.33, the pair is down 0.29% on the day, having posted a daily high at 101.68 and low at 101.07. USD/JPY spot is in neutral territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index is strongly bearish.

The EUR/USD declined for first time in fourth days as the pair lost all Wednesday's gains. Currently, EUR/USD is trading at 1.3609, down 0.24% on the day, having posted a daily high at 1.3652 and low at 1.3589.

"Technically, the EUR/USD downward potential remains limited by buying interest in the 1.3570 area, and as long as above it, range will prevail," points out Valeria Bednarik from FXStreet "The hourly chart shows indicators heading south below their midlines, starting to get exhausted near oversold readings but far from suggesting a reversal."

Main headlines in the American session

US initial jobless claims 304k vs 315k exp

Canada New Housing Price Index (YoY) down to 1.5% in May from previous 1.6%

US May wholesale sales +0.7% vs +0.9% expected

Wall Street closed down but recovered from lows; risk aversion

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