USD/JPY hit a 13 year low in Asian session trade today touching 88.15 after the US Senate failed to agree on a bailout package for the Big Three automakers. The news sent a wave of risk aversion flowing through the Asian equity markets as Nikkei tumbled more than 4%. Meanwhile the commdollars were the biggest victims of the news in the currency market with Aussie and loonie plunging more than 200 points from yesterday’s close.

There is a bearish butterfly pattern forming on the GBP/JPY.

A bullish Gartley and double bottom has led to a GBP/JPY rally. We will now update this trade based on its price action over the past day.

A bullish Gartley and double bottom is forming on the GBP/JPY.

Prices are closing in on an exceptional amount of bullish Fib pattern convergence....

There is a bearish Gartley and double top forming on the AUD/JPY.

Potential strategy: Buy NZD/JPY (we're long at 54.36) risking 53.60 targeting 56.26 (T1) and 56.93 (T2).

Global equities took a severe pounding in today’s trading. For the U.S., concerns over another wave of banking crises seem to take hold of investor’s sense of fear and uncertainty. The Dow was sent down more than 3.0%, while crude prices plummeted nearly 9.0% on the day. With economic data at a minimum for this week, the primary driver in the U.S. will remain to be the flood of corporate earnings. While news has been primarily promising thus far, many are still convinced that this will be the seventh consecutive monthly decline in corporate earnings. Accordingly, the standard risk adverse formation took shape in favor of dollar and yen strength. Crosses bared the brunt of the selling, sending AUD/JPY spiraling down by more than 4.5%.

The rapidly declining CHF/JPY may be approaching short to medium-term support as prices approach bullish pattern completion near daily bull trendline support.

In the first few months of 2009, volatility in the currency market has exploded. Surprisingly enough, this may be in line with seasonal trends.

A bullish Gartley pattern is forming on the CHF/JPY.

There is a bearish Gartley pattern forming on the EUR/JPY.

There is a bullish Gartley pattern forming on the CAD/JPY.

Japanese Eco Watcher survey printed much stronger than forecast at 28.4 versus consensus calls of 20.9 as the worst economic contraction in Japan since World War II appears to be bottoming out. This was the third consecutive month of better than expected results from the survey suggesting that consumer demand may be finally stabilizing albeit at extremely low levels.

There is a bearish Gartley and double top forming on the EUR/JPY.

There is a bullish Gartley and double bottom forming on the AUD/JPY.

Demand for risk continued unabated at the start of the week’s trade today with USD/JPY taking out the 101.00 figure in morning European session as Asian and European equity markets remained firmly in the green. Investors ignored the geo-political; threats from the North Korean rocket launch that fizzled into the Pacific focused instead on the growing theme of stabilization in the global economy.

USD/JPY took out the key 100 level mark on a stop fueled rally in Asian session while cable ran through the 1.4800 figure in a lively pre-NFP action as currency markets prepared to end a volatile week of trade. In Asia very aggressive buying from option related accounts knocked out the 100 barrier in the pair backed by continuation of risk appetite in the afterglow of the successful G-20 summit.

A bearish butterfly has just completed on the NZD/JPY.

Buoyant equity markets reignited risk appetite in currencies tonight as both Asia and Europe extended the gains made yesterday in DJIA on the back of better than expected ISM Manufacturing numbers. The iSM report showed a small measure of improvement across most of its components fueling a rally in stocks on the belief that US demand may have finally stabilized.

As officials met for the G-20 meeting currencies were mixed with no overall theme defining trade today. In Japan the TANKAN report recorded its worst reading ever but the data had little impact on USD/JPY. Instead the pair reacted to a Bloomberg story that the Obama administration was considering bankruptcy for the auto companies which spurred a wave of risk aversion that dropped the USD/JPY more than 100 points in a matter of minutes. However, the pair spent the rest of the night crawling back to 9900 with many traders now targeting the psychologically important 100 level for a stop run.

The Tankan survey showed that business sentiment amongst big manufacturers fell to a record low as economic conditions continued to deteriorate. The Large Manufacturers index declined to -58 from -24 the period prior and printing worse than the markets -55 forecast. The gloomy sentiment reflected the very tough operating conditions for Japanese corporations whose margins are squeezed both by massive collapse of global demand and by the persistent high valuation of the yen.

The markets opened the week with a massive liquidation of risk as yen soared across the board with USD/JPY gaining 200+ points before finally finding some support at the 9600 level. News of the possibility of a GM bankruptcy hit the markets hard with Nikkei dropping -390 points for the day. One key concern for investors, aside of from the natural economic fallout of the failed automaker is the impact of a potential GM bankruptcy on major money center banks. The teetering automaker carries $300 Billion worth of debt and it is unclear as to how much of it will need to be written off should GM file for Chapter 11. As a result European banks such as Deutsche Bank and Commerzbank were sold heavily at the start of Frankfurt trade.

High beta currencies enjoyed a rally for the second night in a row boosted by further gains in equities and continuation in risk appetite. Carry flows were once again the dominant theme in Asian trade with USD/JPY rising to 98.40 while many the yen crosses reached their highest levels since last October. The Nikkei followed through on the nearly 500 point gain in the Dow rising 272 points but the gains on the European markets were decidedly more modest with most indices barely above break even.

We have updated our profit targets from yesterday's bearish butterfly on the GBP/JPY.

There is a bullish 3 drives pattern forming on the EUR/JPY.

Yen was the star performer in overnight trade gaining more than three big figures from yesterday on repatriation flows ahead of the Japanese fiscal year end. After trading as high as 99.12 just two days ago USD/JPY fell to a low of 95.67 in early European session on rumors of large bond redemptions that drove EUR/JPY lower by nearly 300 points and dragged EUR/USD down all night long.

Breakouts are beginning to occur across the foreign exchange market. After consolidating for the past few weeks, we have finally seen an upside breakout in the EUR/USD with the currency pair trading at the highest level since February 24th. USD/JPY has also fallen significantly and is at risk of breaking its March lows while the Australian and New Zealand dollars are attempting to break month long consolidations. The story today is dollar weakness. The greenback has weakened against every major currency except for the Canadian dollar. Other than the equity market’s feeble attempt to extend Tuesday’s gains, there was no major catalyst for the sell-off in the U.S. dollar.

The rally in the Dow Jones Industrial Average is doing nothing for USD/JPY, which held steady despite the more than 5 percent appreciation in U.S. equities on Tuesday.

EUR/USD broke the psychologically important 1.2500 level in early Asian trade after a much worse than expected Australian GDP report triggered a broad dollar rally and tripped stops taking the pair to 1.2457 before it recovered above the 1.2500 handle in early European trade. USD/JPY also saw a tremendous amount of flow taking out the 99.00 barrier and now appears to be poised to tackle the 100 level within the next few sessions.

There is a bearish Gartley forming that may create strong resistance on the GBP/JPY.

An update to yesterday's technical feature...

Since the beginning of the month, the US dollar has skyrocketed against the Japanese Yen. The strength of the currency pair has baffled nearly all forex traders. For the past 12 months, USD/JPY has traded in lockstep with US equities, but as the Dow Jones Industrial Average hits a 12 year low, USD/JPY has soared to a 3 month high. The correlation that once provided currency traders with a reliable explanation for day to day price action is only adding to the confusion. Risk aversion was the predominant theme in the financial markets this past week and yet USD/JPY, “the” barometer of risk is rising and not falling.

Today's roller coaster ride may have topped out as the EUR/JPY once again tests critical resistance near 1.2600...

Trade of the week potential as EUR/JPY hits major resistance on extraordinary Fibonacci convergence...

A bearish butterfly pattern is forming on the EUR/JPY 4hr Chart.

There is a bullish Gartley and double bottom forming on the EUR/JPY that could provide strong support.

94.00 may test current USD/JPY strength....

A highly symmetrical bullish Gartley pattern is forming on the EUR/JPY.

Look for bearish reversal at approx. 11:45am EST. Here's why...

Long term bullish pattern is emerging on the USD/JPY.

A follow up to yesterday's technical feature "EUR/JPY: Long, or Short?"

Equally attractive high probability opportunities ahead...

An update to Friday's CAD/JPY technical analysis feature article...

There has been a lot of volatility in the foreign exchange market this morning, driving currencies to historic levels:

A 300 pip nose dive has sent the USD/JPY right back down to major support just above 87.00 completing a solid double bottom formation.

The USD/JPY is shaping up to be the trade of the Q1...