USD/JPY above 100 levels: Is it the beginning of a further leg up?

EUR:

 The euro gained during the first half of the week despite mixed macro data, and rose to a weekly high of 1.3194 before losing ground till the end of the week. It established itself below the strong support zone of 1.30 helped by the massive capital inflows to the US dollar during the second half of the trading session in New York on Thursday 9^th of May.

Concerns over Greece and Cyprus are decreasing, but the euro zone still remains under pressure with countries like France being closely watched by the market players.

This week, traders wait for major news from the euro zone that may have the ability to move the euro sharply. By that, we intend euro zone Gross Domestic Product data for the first quarter of 2013 to be published on Wednesday at 11 am (CET) and CPI figures that will be released on Thursday at 11 am (CET).

USD:

 US dollar keeps rising on better than expected macro figures and on massive buying compared to the broad yen sell off. It seems like investors see more stability in the American economy than before. The dollar has touched a five year high against its Nipponese peer.

The upcoming macro events on the US dollar will be numerous this week but most of the important news will be released on Thursday afternoon, including consumer inflation data.

GBP:

 GBP stopped to appreciate against its major's rivals on Thursday after the announcement by the Bank of England that it decided not to change its interest rate neither its asset purchase program.  This combined with the formation of a technical pattern (double-top) sent the GBP/USD to a weekly low of 1.5314.

 JPY:

 JPY weakened further and triggered the 100Y/$ critical level last week on Thursday afternoon during the US session. Indeed, the price went above 100 levels and a series of stop losses were triggered resulting in a massive sell off in yen and relatively significant capital inflows to the US dollar.

The impact of such a market move had repercussion on the whole forex market and most of the currencies quoted against the US dollar have moved significantly after that. The pair has reached a high of 102.15 and it looks like the upside potential is not weakening. Many analysts see that as the signal for further rise to 110 levels.

Overnight this Thursday, Japan will release its preliminary GDP for the first quarter 2013. For now, consensus is fixed at 0.7% for the quarter on quarter reading and 2.7% for the annual figure.

AUD:

The major event on the Aussie was the rate cut on Tuesday 7th of May. The Reserve Bank of Australia decided to cut its benchmark interest rate by a quarter of a point to a record low of 2.75%. Following this decision, the AUD/USD tumbled and lost approximately 70 pips on that day from the opening at 1.0253 to the closing at 1.0184.

Later last week, the pair recovered most of the down move due to much better than expected job data, but the move was interpreted as an overreaction by the market and did not last long. The pair then tumbled even lower combined with the effects of the massive buy on the US dollar resulting from orders triggered on the USD/JPY move.

The pair continued its down move until the end of the week helped also by the monetary measures taken by the Central Bank of New Zealand aiming at weakening its currency. Overall last week, the AUD/USD lost 295 pips and reached levels last seen in June 2012.

NZD:

 Just like its neighbour, the Aussie, NZD lost ground last week; first dragged lower mostly due to the events that occurred on the Australian economy due to the high correlation the kiwi has to the Australian Dollar.

Major news was the decision taken by the Reserve Bank of New Zealand to sell the kiwi in order to cap its gains against the dollar.

We do not expect major moves on the Kiwi since the economic calendar for New Zealand is really light this week.