Yen surges in flash-crash moves

Thursday 3 January 2019

I've been warning of the fragile conditions and lack of liquidity and last night in Asia we saw big big moves, aka "flash crashes", on Yen pairs and related core pairs as safe-haven plays prevailed. As usual the jury is out still on the biggest causes (Apple giving a profits warning and knock-on effect on risk sentiment being a prime mover) but we have to throw in very thin liquidity conditions (early Asia market opening around 22.15-45 GMT) and stop-losses being triggered (USDJPY, AUDJPY and GBPJPY being notable).We've seen some recovery across the board but conditions remain extremely fragile.

Precise lows are subject to conjecture as various platforms reports different lows but GBPUSD fell to 1.2426  driven once again by the GBPJPY selling before rebounding quickly and is currently nudging up through 1.2560 as I type. I remain GBP bearish overall and happy to jump on rallies still. EURGBP has rallied higher still to 0.9122 (GBPEUR down to 1.0963) with EURUSD failing to fall as far or as fast as GBPUSD but has since retreated.

EURUSD did fall to look below 1.1300 briefly with EURJPY tumbling but has found dip demand to post 1.1380 this morning. USDJPY led the way on the Yen demand and crashed down to the 104.75 area on the fragile risk/thin liquidity conditions. USDCHF did fall to test 0.9850 but still finding some degree of support from EURCHF dip demand this time around 1.1180 with the SNB seemingly ever-watchful as I've been warning.

AUDUSD collapsed to test 0.6700 on the AUDJPY supply and still remains fragile as I've been warning despite a decent recovery helped by some Gold demand and AUDJPY buy-backs while USDCAD remains underpinned as oil prices remain fragile plus a good amount of CADJPY supply.

Fickle Forex markets ever prevailing and liquidity remains thin with many institutional desks not fully ramped up until Monday as I've been warning so be ready with your entry/exit levels and orders as always. Last night's moves are ample testimony to that sage advice.

Have a good day one and all.

Interbank Rate 08.05 GMT GBPUSD   1.2555 EURUSD   1.1358 EURGBP   0.9047 GBPEUR   1.1051 USDJPY   107.72 EURJPY   122.36 GBPJPY   135.29 AUDUSD   0.6972 EURCHF   1.1223 USDCAD   1.3612 USDCHF   0.9878