usdjpy

Summary:  An extension of the rout in risky assets has continued to drive the US dollar higher against the smaller currencies and most G10 currencies as well, but the Japanese yen has not only taken on a new shine, but is even sharply stronger against the strong US dollar as global bonds have suddenly rediscovered their safe haven appeal. Elsewhere, HKD is worth watching as the HKMA intervened for the first time of this cycle to maintain the top of the USDHKD band.


FX Trading focus: JPY woke up and smelled the coffee. Watching HKD as USD presses upper level of USDHKD band. The JPY upside potential has been more fully realized since yesterday on the heavy weight of falling yields in global sovereign bond, which are finally serving their function as a go-to safe haven in an environment of generally risk deleveraging. The JPY is even handily outpacing the ongoing strength in the US dollar as the yield focus dominates. And the technical damage in JPY crosses is spreading: NZDJPY

Intraday Market Analysis – EUR Builds Up Bullish Reveal - 29.10.2021

Intraday Market Analysis – EUR Builds Up Bullish Reveal - 29.10.2021

Jing Ren Jing Ren 29.10.2021 09:04
The euro surges as the market prices in inflation pressure despite the ECB’s dovish message. Bullish candles have pushed the single currency above the triple top (1.1665) which sits on the 30-day moving average, paving the way for a reversal. Strong momentum is a sign of short-covering from those caught on the wrong side of the market. An overbought RSI could temporarily limit the range of the rally. However, renewed optimism may send the pair to the daily resistance at 1.1750. 1.1620 is the support in case of a pullback. USDJPY tests demand zone The Japanese yen recouped losses after the BOJ sees a weak yen as positive for Japan’s economy. And the US dollar has come under pressure near a four-year high. An overbought RSI on the daily chart points to an overextension. On the hourly level, the pair has found bids around 113.30 near a previous consolidation range. A bearish breakout would test the round number at 113.00, which lies on the 20-day moving average and is critical in safeguarding the uptrend. The bulls need to lift 114.30 before they may resume the rally. US 30 pulls backs for support The Dow Jones consolidates as investors digest earnings near the all-time high. A breakout above the August peak at 35600 and a bullish MA cross from the daily timeframe indicate an acceleration on the upside as the rally continues. Pullbacks could be an opportunity to buy low. An overbought RSI has triggered a minor sell-off below 35600, shaking out weaker hands in the process. A drop below 35450 would lead to the psychological level of 35000. 35830 is now a fresh resistance.
Intraday Market Analysis – GBP To Test Resistance

Intraday Market Analysis – GBP To Test Resistance

John Benjamin John Benjamin 18.11.2021 10:37
GBPUSD bounces higher The pound inched higher after the UK’s inflation soared to 4.2% in October. Sentiment remains pessimistic after a botched rebound from the demand zone at 1.3420. However, an oversold RSI has attracted some buying interest. Its bullish divergence suggests a slowdown in the sell-off, prompting momentum traders to take profit and look for the next breakout. The sterling may bounce back if the bulls succeed in keeping it above 1.3380. 1.3530 would be the first hurdle. Otherwise, a bearish breakout would send the pair to 1.3200. USDCAD reaches new high The Canadian dollar fell back after the annual inflation rate matched the consensus. Following the greenback’s rally from the demand zone at 1.2300, a bullish MA cross on the daily chart suggests that the current rebound is picking up steam. As a sign of strong commitment, buyers were eager to keep price action above 1.2480 when the RSI flirted with the oversold area. A break above 1.2600 may trigger an extended rally towards the daily resistance at 1.2760. 1.2540 is fresh support in case of a pullback. USOIL falls through key support WTI crude tumbled after OPEC warned of supply surplus. The rally has stalled after the bulls struggled to lift offers at 85.00. On the daily timeframe, the RSI’s double top in the overbought area indicates an overextension. A break below 79.00 has led to profit-taking and put the long side under pressure. 81.60 is now a fresh resistance from the latest sell-off. The buy-side will need to achieve new highs before they could bring in momentum interest. Failing that, 75.00 is a key floor to keep price action afloat.
Intraday Market Analysis – USD Bounces Back

Intraday Market Analysis – USD Bounces Back

John Benjamin John Benjamin 22.11.2021 08:40
GBPUSD hits resistance The pound pulled back after Britain’s retail sales registered a steeper drop to -1.3% in October. The pair has met stiff selling pressure in the supply zone around 1.3510, a support that has turned into resistance after a failed rebound. An oversold RSI may cause a limited rebound. However, a bearish MA cross on the daily chart suggests that sentiment is still pessimistic. 1.3380 is a key support to keep the sterling afloat. A bearish breakout may trigger an extended sell-off to last December’s lows around 1.3200. USDCAD breaks higher The Canadian dollar struggles after a contraction in September’s retail numbers. The US dollar bounced off the resistance-turned-support at 1.2580. This is a sign that the bulls are still in control. A bullish MA cross on the daily timeframe confirms the directional bias for the next few days. The daily resistance at 1.2770 would be the next target. Its break would lead to a test of the double top at 1.2900. In the meantime, the RSI’s overextension has temporarily held the bulls back. We can also expect buying interest during dips. GER 40 struggles for support The Dax 40 tumbles as lockdowns across Europe hurt sentiment. The RSI’s overbought situation on the daily chart has made buyers cautious in pursuing high valuations. On the hourly chart, a bearish RSI divergence suggests a deceleration in the upward momentum. Then a dip below 16200 confirms weakness in the rally, prompting leverage positions to liquidate. The psychological level of 16000 is a congestion area as it coincides with last August’s peak and the 20-day moving average. 16300 is now a fresh hurdle.
USDJPY - an interesting pair, a few words about US 100

USDJPY - an interesting pair, a few words about US 100

John Benjamin John Benjamin 27.12.2021 10:59
USDJPY breaks higher The US dollar inched higher after November’s core PCE jumped to 4.7%. A break above the supply area near 114.20 indicates that the bulls have gained the upper hand. As sellers rush to the exit, the pair may enjoy solid support above the former resistance at 114.05. An overbought RSI has temporarily limited the initial breakout range. After a short accumulation phase, the bulls may have an unobstructed path towards the psychological level of 115.00. That is a major hurdle right under the previous peak. USDCAD retreats to daily support The Canadian dollar bounces back as GDP growth gained traction in October. The US dollar is struggling for support after its tentative break above the August high at 1.2950. A retreat below 1.2900 has led traders to dump leveraged positions. The pair is testing the daily support at 1.2760 which lies along the 30-day moving average. And this makes it an area of interest for the bulls to attempt a rebound. 1.2920 is a fresh resistance ahead. A deeper correction may send the greenback to 1.2650 near December’s lows. US 100 completes V-shaped recovery The Nasdaq 100 continues to recover as improved economic data outweigh covid concerns. The index has met solid buying interest near 15600. This used to be a supply zone from last September. Since then it has recouped losses from the recent liquidation. The RSI’s overbought situation may cause a brief pullback while short-term traders take profit. 16170 is the closest support and 15850 is another layer of defense. On the upside, a break above 16460 could extend the rally to the all-time high at 16770 and beyond.
USDJPY Chart Looks Alike A Stable One, GBPUSD Resembles A Hillock

USDJPY Chart Looks Alike A Stable One, GBPUSD Resembles A Hillock

John Benjamin John Benjamin 19.01.2022 09:01
GBPUSD falls into correction The sterling fell back after a slowdown in Britain’s wage growth in November. Sentiment favors the pound after it rallied above the daily resistance at 1.3700. However, an overbought RSI has cut back buyers’ appetite. A break below 1.3630 has prompted some traders to take profit, driving down the price. As the RSI dips into the oversold zone, 1.3570 is the next support. A bearish breakout would send the pair to 1.3480 which sits on the 30-day moving average. 1.3660 is the immediate resistance when a rebound takes shape. USDJPY struggles to bounce The yen softened after the Bank of Japan signaled no shift in its ultra-loose monetary policy. The US dollar bounced off the critical floor at 113.50 from the daily chart. A bullish RSI divergence revealed a deceleration in the downward impetus. The indicator’s oversold situation also attracted a number of bargain hunters. A break above 114.70 suggests a strong interest in keeping the correction in check. 115.50 from the latest sell-off is a major hurdle and its breach could extend the rally to the recent peak at 116.30. SPX 500 to test daily support The S&P 500 extended losses over rising rate worries. The fall below 4640 invalidates the latest rebound and indicates that sentiment is still downbeat. Below the psychological level of 4600, 4540 is a key support near last December’s lows on the daily chart. A bearish breakout would trigger a deeper correction towards 4400, the origin of the October rally. An oversold RSI may cause a limited rebound. Nonetheless, the bulls need to clear offers around 4675 and then 4745 to gain momentum.
Considering Portfolios In Times Of, Among Others, Inflation...

XAUUSD, USDJPY And AUDJPY Are Mentioned In Jason Sen's Video Analysis

Jason Sen Jason Sen 18.01.2022 13:39
AUDJPY longs work if you are still holding them hitting target & only resistance for today at 8280/8300. Therefore a break above 8320 is a buy signal targeting 8365/75. A buying opportunity again at 8220/10. Stop below 8190. A break below 8190 is a sell signal targeting 8160/55, perhaps as far as 8100/8090. EURJPY straight through minor resistance at 130.60/70 to the next target of 130.95/99 with a test of trend line resistance at 131.20/30 now likely. Shorts need stops above 131.45. A break higher is a buy signal - try to jump in and hold long in to the end of the week. A buying opportunity again at 130.10/129.90 with stop below 129.80. EURUSD longs at the buying opportunity at 1.1400/1.1380 target strong resistance at 1.1455/65. This held quite well on the last test. Further gains are likely eventually towards 1.1500/10 & 1.1560/70 A buying opportunity at 1.1400/1.1380 - stop below 1.1365. If this trade fails, I fear we will remain stuck in a sideways trend. GBPUSD shorts at the 200 day moving average at 1.3735/40 worked in severely overbought conditions to test support at 1.3670/60. Further losses today meet strong support at 1.3620/00 with a good chance of a low for the day. Longs need stops below 1.3585. Next target & support at 1.3535/25. 200 day moving average resistance again at 1.3735/40 Shorts need stops above 1.3755 this week. A break higher is the next buy signal targeting 1.3780 & 1.3805/15. Expect some resistance at the October high at 1.3830/35. Emini S&P got close to a test of the neck line at 4590/80 on Friday but bounced from 4606. If tested this week, longs need stops below 4570. A break lower is a significant sell signal. Minor resistance at 4670/80 & again at 4695/4705. Further gains can retest last week's high of 4735/40. Next target is 4750/60. Above 4765 can retest the all time high at 4800/08. Nasdaq perhaps building a minor negative trend in January perhaps. Holding quite important resistance at 15700/750 is negative for today initially targeting 15550/500. If we continue lower look for 15350/320 before a retest of last week's low at 15170/150. Further losses test the 200 day moving average at 15000/14950. First resistance at 15700/750 - shorts need stops above 15800. A break higher targets more minor resistance at 16000/16100. A break above here is a buy signal & we could even retest the all time high. Emini Dow Jones I am waiting for a clear pattern of trend to develop. For now, minor resistance at 35800/850 tested as I write over night but if we continue higher look for a test of minor resistance at 36000/36050. Further gains can target 36300/350. Holding minor resistance at 35800/850 can target 35750/700 before a retest of this week's low at 35540/520. A break lower this week targets support at the 100 day moving average at 35350/330. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Speaking Of S&P 500, NAS 100, GER40, UK100, USDJPY And More - DayTradeIdeas Shared A New Video!

Speaking Of S&P 500, NAS 100, GER40, UK100, USDJPY And More - DayTradeIdeas Shared A New Video!

Jason Sen Jason Sen 02.02.2022 11:31
USDJPY hit the next target of 115.65/75 with a high for the day exactly here & a minor negative candle on the daily chart which increases the chances of a right shoulder forming here. Prices have headed lower as expected to the 114.60/55 target. EURJPY shorts at strong resistance at 129.50/60 worked with a high for the day here & a potential 60 pip profit on the side to minor support at 129.00/128.90 - a low for the day exactly here. CADJPY remains very volatile, making it difficult to hold a trade for a more than a few hours. Up one day, down the next day in the 7 day sideways trend. The key level today does appear to be 9040/30 as stated yesterday. Holding above here is positive, holding below is negative for the outlook. Update daily at 06:30 GMT Today's Analysis. USDJPY reversed from the next target of 115.65/75 as we watch for a right shoulder to form. If you sold the bounce to first resistance at 115.60/70 you are doing well already as we hit targets of 114.85/80 & 114.60/55, perhaps as far as 114.35/30 today. First resistance at 115.15/20, with further resistance at 115.60/70 of course. EURJPY meets strong resistance again at 129.50/60. Shorts need stops above 129.70. A break higher is a buy signal targeting 129.90/95 then 130.25/35. Minor support again at 129.00/128.90. A break lower targets 128.65/60 before a retest of 128.30/20. CADJPY beat first resistance at 9030/40 to hit the next target of 9080/90 with a high for the day here again yesterday but the pair are difficult to read. Above here look for 9110/15. A break higher targets 9140/50. Minor support at 9040/30. Further losses can retest 8970/60. A break lower can target the 200 day moving average at 8915/10.   EURUSD beat strong resistance at 1.1205/10 & was expected to target strong resistance at 1.1255/65 - this target was hit & is holding as I write. However a break above 1.1280 today is a buy signal. USDCAD we wrote: should meet very strong support at 1.2665/55. Longs need stops below 1.2645. A low for the day exactly at 1.2665/55 yesterday & a potential 60 pip profit on the bounce to minor resistance at 1.2710/20 with a high for the day exactly here. These 2 levels marked the low & the high for the day. Update daily at 06:30 GMT Today's Analysis. EURUSD hit the next target & strong resistance at 1.1255/65 which is still holding today. Shorts need stops above 1.1275. A break above 1.1280 is a buy signal targeting 1.1300/10, perhaps as far as 1.1340/50. Shorts at strong resistance at 1.1255/65 target 1.1210/00. If we continue lower look for minor support at 1.1180/70. USDCAD held very strong support at 1.2665/55. Longs need stops below 1.2645. A break lower however targets 1.2615/05. Minor resistance at 1.2710/20 held the bounce yesterday but above here can target 1.2750/60, perhaps as far as 1.2780/90. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
XAGUSD And US100 Slides Down, USDJPY Near 116.00

XAGUSD And US100 Slides Down, USDJPY Near 116.00

John Benjamin John Benjamin 11.02.2022 10:06
USDJPY to test major resistance The US dollar surged after consumer prices hit a 40-year high. Higher lows and then a close above the recent peak at 115.65 is an indication of strong bullish pressure. This breakout has propelled the greenback to January’s high at 116.35. Its breach could trigger a runaway rally and resume the uptrend in the medium term. An overbought RSI on the hourly chart may briefly restrain the bullish fever. 115.30 is the closest support and the bulls may see a pullback as an opportunity to stake in. XAGUSD seeks support Bullions fell back after US Treasury yields soared over hot US inflation data. The psychological level of 22.00 has proven to be a solid demand area. A break above 23.00 has forced sellers to cover, paving the way for an upward extension. 24.00 from a previous rectangle consolidation is the next resistance. A bullish breakout would bring silver back to this year’s high at 24.70. On the downside, the resistance-turned-support at 22.80 could see buying interest in case of a retracement. US 100 hits resistance The Nasdaq 100 struggles as record-high US inflation exacerbates rate hike concerns. The previous rebound has eased selling pressure but hit resistance under 15350. The subsequent pullback bounced off the 61.8% Fibonacci retracement level (14400), which suggests buyers’ strong interest in keeping the index afloat. Sentiment is still a tad cautious unless the bulls clear the said hurdle. Then the psychological level of 16000 could be within reach. 14500 is a key support in case of an extended consolidation.
USDJPY, XAUUSD And Standard And Poor 500 Recovering After Noticeable Fluctuations

USDJPY, XAUUSD And Standard And Poor 500 Recovering After Noticeable Fluctuations

John Benjamin John Benjamin 25.02.2022 09:04
USDJPY bounces off daily support The US dollar jumps as traders seek safe haven assets over the Russia-Ukraine conflict. The pair struggled for bids after it turned away from the double top (116.20) and has been grinding down a falling trend line. However, the daily support at 114.40 has proved to be a solid demand area by keeping February’s rebound intact. Strong momentum above the trend line and 115.20 forced sellers out of the game and would attract more purchasing power. A close above 116.20 would extend the rally towards 117.00 XAUUSD seeks support Gold whipsawed as markets await the Western response to the invasion of Ukraine. The rally accelerated after it broke above last June’s high at 1912. Momentum trading pushed the price to September 2020’s highs (1975) before reversing its course. 1880 is a fresh support after intraday buyers took profit. As sentiment shifts to the bullish side, the current pullback combined with a depressed RSI could trigger a bargain-hunting behavior. Renewed buying frenzy may send the metal to the psychological level of 2000. US 500 lacks support The S&P 500 weakens as investors fear spillover from the conflict in Ukraine. A break below the daily support at 4280 further put the bulls on the defensive. Last May’s lows, near 4040, are the next target as liquidation continues. The index may have entered the bear market as the sell-off could speed up in the coming weeks. On the daily chart, the RSI’s double-dip in the oversold area may offer a temporary relief. 4350 is the first hurdle ahead and the bears may look to fade any rebound amid soured sentiment.
USDJPY Flattened, EURGBP Is Sliding, DAX (GER 40) Is Back

USDJPY Flattened, EURGBP Is Sliding, DAX (GER 40) Is Back

Jing Ren Jing Ren 05.04.2022 07:46
USDJPY consolidates gains The US dollar gains on the prospect of more sanctions on Russia. On the daily chart, the RSI’s overbought condition led to profit-takings as the bulls became reluctant to outbid each other. Nonetheless, the direction remains upward, and a pause is necessary for the market to take a breather. The current pullback has found support over 121.30. A bounce above 123.20 may signal a bullish continuation and extend the price back to 125.00. On the downside, a breakout could cause a correction to 119.40 near the 30-day moving average. EURGBP struggles for support The euro fell as worries over Europe’s energy supply grew. The current pullback could be an opportunity for the bulls to stake in but they will need to push past 0.8400 to regain control. The 61.8% (0.8380) Fibonacci retracement level has failed to foster buyers’ interest. The RSI’s double dip into the oversold area may attract some bids. The demand zone between the daily support (0.8300) and 0.8320 is a critical floor to keep the rebound valid. That said, its breach could trigger a sell-off towards 0.8200. GER 40 takes a breather The Dax 40 goes sideways as the EU considers a new set of sanctions. A bullish MA cross on the daily chart suggests an acceleration in the rebound as a sign of improved sentiment. The index is hovering above the lower end (14200) of the previous consolidation. This level coincides with the 20 and 30-day moving averages, making it an area of interest. A close above 14730 could extend the rally to the origin of the February liquidation at 15200. This is an important resistance before the uptrend could resume in the medium-term.
USDJPY - The Chart Shows A Strong Greenback, EURCAD And DAX Calmer Than Before

USDJPY - The Chart Shows A Strong Greenback, EURCAD And DAX Calmer Than Before

Jing Ren Jing Ren 11.04.2022 08:31
USDJPY consolidates gains The US dollar rallies as the 10-year Treasury yield hits a three-year high. Price action has been treading water after it bounced off 121.30. The RSI shot back into the overbought area and could limit the upward momentum. Sentiment remains bullish but subdued volatility suggests a lack of volume. The recent peak at 125.00 is a major hurdle and its breach could resume the rally. On the downside, a break below 122.70 could lead to an extended consolidation. 121.30 is a critical floor to keep the short-term rally intact. EURCAD struggles to rebound The Canadian dollar strengthened after a drop in the jobless rate in March. The RSI’s double-dip in the oversold area has attracted some buying interest. A break above the demand-turned-supply zone around 1.3700 has improved the short-term mood. The origin of the previous sell-off at 1.3840 is a major resistance, as it sits on the 20-day moving average, making it a congestion area. A bullish close could pave the way for a meaningful rebound. Failing that, a retreat back below 1.3600 may resume the downtrend. GER 40 seeks support The Dax 40 struggles on concerns about the economic costs of war in Ukraine. A bullish MA cross on the daily chart suggests steadied sentiment in the medium-term after a V-shaped rebound. The bulls may see the pullback as an opportunity to accumulate. They will need to clear February’s sell-off point at 15500 before the uptrend could resume. On the intraday level, a drop below 14200 prompted buyers to exit, making 14430 a fresh resistance. A break below 14050 may cause a deeper correction towards 13600.
Chart of the Week - Gold Miners vs Energy Producers - 20.04.2022

NAS100, SPX, EuroStoxx 50, Gold (XAUUSD), US Treasuries And More - "Financial Markets Today: Quick Take" – April 13, 2022

Saxo Strategy Team Saxo Strategy Team 13.04.2022 11:07
Macro 2022-04-13 08:25 6 minutes to read Summary:  Markets are waking up about where they left off yesterday, as a US equity market rally in the wake of slightly softer than expected core US inflation in March was reversed back to its starting point. Overnight, the New Zealand central bank hiked more than expected, but guided less hawkish, so NZD fell. The Bank of Canada is expected to beat the Fed to the punch today by hiking by 50 basis points for the first time since 2000.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - US equities tried to shift back to a positive stance yesterday in the wake of a slightly softer core CPI reading for March, but the rally was erased by the close, as attention is set to shift to earnings season which kicks off today in earnest. The Nasdaq 100 index has yet to break down through the 61.8% Fibonacci retracement level at 13,831, a break of which could usher in a full test of the 12,942.5 low. The less yield-sensitive S&P 500 index is farther above its respective 61.8% retracement level (4,299) but posted a weak session to new local lows yesterday, even as sentiment has recovered again overnight. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) were little changed.  Energy and mining stocks outperformed.  China’s Ministry of Transport has issued a notice to local governments to urge the latter to keep highways in operation in areas affected by lockdowns.  China is also piloting in eight cities to reduce the number of days required for quarantine from 14 days to 10 days.  China reported better than expected March export data (+14.7% YoY in USD terms) while imports declined (-0.1% YoY in USD terms). Trade surplus increased to USD47.4 billion (vs consensus $21.7bln, Feb $30.6bln). Stoxx 50 (EU50.I) – the Stoxx 50 index snapped back from new local lows yesterday –emphasizing the importance of the 3,800 area support – and is fairly sideways overnight in the futures, a somewhat better performance than the major US averages, where a rally attempt yesterday was fully wiped out.  A weak euro certainly helps exporters, but energy/power prices continue to weigh on Europe’s economic outlook. EURUSD and EUR pairs  – the euro continues to trade heavily and EURUDS has nearly touched the lows for the cycle around near 1.0800. It was rather disappointing for bulls that the pair failed to get more support from a consolidation lower in US yields yesterday in the wake of the slightly cooler than expected core inflation reading (more below). The ongoing unease as Russia looks set to widen its offensive in eastern Ukraine and concerns that the ECB will remain dovish tomorrow perhaps weighing. The next major level lower is the 1.0636 level posted during the pandemic outbreak panic. USDCAD is at pivotal levels in the 1.2650 area, ... ...about the half-way point of the recent  price range and near the 200-day moving average ahead of today’s Bank of Canada meeting, which is expected to bring a 50-basis point rate hike (to take the policy rate to 1.00%), which would be the first rate hike of more than 25 bps since 2000. But with the Fed seen likely matching the Bank of Canada’s pace of tightening by year-end, the BoC may need to guide hawkish, or CAD may need to find more support from rising oil prices and improving risk sentiment broadly if it is to stage a rally against the US dollar. The technical situation certainly looks pivotal. Gold (XAUUSD) The advance in gold prices was a bit more impressive yesterday as the move higher above the key 1,966 area stuck, though the real challenge remains a bid to retake the psychologically important 2,000 level. The dip in treasury yields yesterday and weak risk sentiment in equities provided some of the boost. Crude oil (OILUKJUN22 & OILUSMAY22)  A solid comeback for oil prices yesterday, as WTI crude joined Brent in trading back above 100/bbl ahead of weekly US crude oil and product inventories from the DoE today. China moving to ease some of the Shanghai covid lockdowns may have boosted sentiment on the demand side. And longer-term supply concerns are in clear evidence as long-dated crude for December of 2023, trades within two dollars of the highest daily close for the cycle back in early March. US Treasuries (IEF, TLT) and European Sovereign Debt. Treasury traders took the slightest easing of the pace of core March US inflation as a signal for consolidation yesterday, as yields dropped all along the curve, and more so at the front end as the market perhaps figures that as long as the pace of inflation rises moderates, it can stop the constant upward adjustments to the perceived path of Fed policy tightening this year. A US 10-year treasury auction saw tepid demand yesterday. Today sees a 30-year T-bond auction. EU yields also eased lower yesterday from new cycle- and multi-year highs. What is going on? New Zealand’s RBNZ surprises with 50-basis point hike, but guides less hawkish.  The market was looking for a 25-basis point move to take the Official Cash Rate to 1.25%, but instead got 50 basis points and a 1.50% policy rate. The argument in the statement was that the bank saw it prudent to bring hiking forward to reduce the risks of rising inflation expectations. At the same time, the statement frets the slowing pace of global economic activity. After an initial spike higher on the impact of the larger than expected hike, the NZD traded lower in the wake of the decision as the 2-year NZ rate dropped some 15 basis points. AUDNZD also retains an upward bias given the demand in resource-rich Australian assets. Australia’s business data also continues to hold up for now, while New Zealand is facing deteriorating business sentiment and chronic labor shortage. UK Mar. CPI out this morning – hotter than expected.  UK March CPI hit +1.1% MoM and +7.0% YoY on the headline (vs. +0.8% /+6.7% expected) and +5.7% YoY (vs. +5.3% expected) for the core CPI reading Crowdstrike (CRWD) rose 3.2% on a Goldman Sach upgrade to buy. Crowdstrikeis the world’s biggest cybersecurity company. The analyst community also likes Crowdstrike  with 93% of analysts rating the stock as a buy. Goldman Sachs expects Crowdstrike’s shares to rise to $285 in a year. USDJPY refuses to drop below 125.  USDJPY dropped below 125 following the US CPI release overnight, focusing on the less-than-expected core print and the fall in US treasury yields. This morning, the pair is trading close to the near-20 year high of 125.86. The move was however reversed suggesting sustained weakness in the yen, which will continue until we see stronger action from the Japanese authorities and not just verbal intervention. The prospect of stagflation remains for Germany.  This is the main takeaway from the ZEW index released yesterday. The economic sentiment index decreased to minus 41.0 in April versus prior minus 39.3 while the current conditions index dropped to minus 30.8 versus prior minus 21.4. The ZEW experts are therefore pessimistic about the current economic situation, and they expect that it will continue to deteriorate. The only glimpse of hope is the decline in inflation expectations.  U.S. Inflation is still uncomfortably high.  March CPI hit 8.5 % year-over-year. This is the hottest annual pace since 1981. The pace of Core CPI rises moderated a bit at +0.3% month-on-month and + 6.5% year-on-year. This is still the hottest pace since 1982. On a year-on-year basis, the sharpest increases are : fuel oil (70 %), gas (48 %), used cars (35 %), hotels (29 %), airfare (24 %) and utility gas (22 %). You can find the full list here (scroll to pdf page 9). It is clear that the U.S. Federal Reserve is behind the curve. Expect a 50-basis point interest rate hike at the May FOMC meeting. What are we watching next? Ukraine war developments as new Russian offensive operations are underway in eastern Ukraine and US President Biden promised a new round of $750 million in military aid and said Russian leader Putin is guilty of genocide. Earnings Watch. The Q1 earnings season kicks off in earnest today week with US mega-bank JP Morgan Chase reporting today, but the more Main Street-oriented banks reporting in coming days, including the largest of these, Wells Fargo, tomorrow, will be interesting for a check-up on credit demand. The UK’s largest grocer Tesco is also worth watching for a sense of the impact of inflation on margins and customer behaviour as a cost-of-living crisis has hit a large portion of the UK population. Today: Tesco, JPMorgan Chase & Co, BlackRock, Fastenal Thursday: China Northern Rare Earth Group, Fast Retailing, Ericsson, UnitedHealth, Wells Fargo, Morgan Stanley, Goldman Sachs, Citigroup, US Bancorp, PNC Financial Services, Coinbase, State Street Friday: Hangzhou Hikvision Digital Economic calendar highlights for today (times GMT) 1230 – US Mar. PPI 1400 – Canada Bank of Canada Rate Decision 1430 – US DoE Weekly Crude Oil and Product Inventories 1500 – Canada Bank of Canada’s Macklem press conference 1700 – US 30-year T-bond auction 2301 – UK Mar. RICS House Price Balance 0130 – Australia Mar. Employment Change / Unemployment Rate   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:    
US Close – ISM hits 2-year low, Au Revoir 3.00% on recession worries, Choppy waters for Stocks, Commodity Markets tired of softening, Bitcoin tests $18K waters

(US Dollar) USD/JPY (Japanese Yen) Hits 20-Year-Low!? Japanese Currency Is Quite Weak. What Will Bank Of Japan Do?

Conotoxia Comments Conotoxia Comments 13.04.2022 15:50
The USD/JPY reaching 126 yen this morning means that the Japanese currency appears to be at its weakest against the US in nearly 20 years. The reason? The Bank of Japan's commitment to maintain ultra-loose monetary policy may contrast with the actions of the world's other major central banks, which appear to be normalizing monetary policy. Yen falls, bank doesn't intend to react Shunichi Suzuki, Japan's finance minister, declined to comment Tuesday on specific rates in currency markets. He said the government is keeping a close eye on the yen's trading and that excessive volatility in the exchange rate could have a negative impact on the economy and financial stability. The Bank of Japan has repeatedly intervened to keep bond yields near zero. Recently, however, Shunichi Suzuki has cooled hopes for any government intervention in the currency markets, saying the central bank does not deal with exchange rates. Since the beginning of the year, the yen appears to be the weakest among the world's major currencies and may be losing more than 8 percent to the USD. Since the beginning of April alone, JPY depreciation against the USD may have reached 3.5 percent. Learn more on Conotoxia.com Inflation 8.5 percent - rates are going up In the United States, after the inflation reading, which rose to 8.5 percent in March, the US dollar appears relatively strong, and the exchange rate of the main currency pair remains in the region of 1.08. The market may expect the Fed to decide on two consecutive interest rate hikes of 50 basis points in response to the rise in prices. Such a move is priced today with over 80 percent probability, and the next decision will come as early as May 4. Related article: ECB To Shock Markets In The Following Week!? US Dollar Rate Under Pressure As Well! Oil: demand in China falls, demand in USA rises Increased volatility may arise on the oil market. The futures contract for WTI crude oil rose to around $100 per barrel today, falling from the session high at $102. Data from China's customs office showed that crude imports into the world's largest crude consumer fell for the second month in a row. That's likely because further restrictions due to coronavirus have reduced demand. Japan, the world's third-largest oil consumer and importer, saw its biggest monthly drop in machinery orders in February in nearly two years. Fears persist that supplies could become even tighter because of the war in eastern Europe. OPEC has already warned that it will not be able to replace potential supply losses from Russia. At the same time, there could be strong demand for fuel in the U.S., where gasoline and distillate stocks fell by more than 5 million barrels last week. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Chart of the Week - Gold Miners vs Energy Producers - 20.04.2022

You Should Follow These Events And Assets! Saxo Bank's QuickTake: NAS100, S&P 500, Stoxx 50, EURUSD, USDJPY, XAUUSD, Crude Oil, Russia-Ukraine War - And More

Saxo Bank Saxo Bank 19.04.2022 10:16
Macro 2022-04-19 08:34 6 minutes to read Summary:  Markets are trying to maintain an even keel as bond yields and oil prices continue to press higher. Europe returns from its long holiday weekend today as the war in Ukraine is heating up in the east and the hawkish Fed voter Bullard says he would not rule out a 75-basis-point hike at the May 4 FOMC meeting. Gold failed a bid to take the 2,000 dollar per ounce threshold yesterday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  - US equities have been weak over the past week with negative reactions to earnings from US financials with JPMorgan Chase’s unexpected increase in credit provisions indicating credit conditions will worsen. This week major earnings releases in the US will dominate the reaction function and set the direction for the S&P 500 futures which are trading around the 4,400 level this morning with yesterday’s low at 4,355 being the key level to watch on the downside. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun   Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I)  Hang Seng Index retreated more than 2% after investors found the 25 bp reserve requirement ratio cut by the People’s Bank of China last Friday disappointing as they had been expecting a more typical 50 bp reduction and a 10 bp cut in the policy Medium-term Lending Facility (MLF) rate as well.  E-commerce names declined on report that the Chinse authority had asked e-commerce companies to a meeting and called on the latter to improve on practices on pricing and delivery of necessities to consumers during lockdowns. Alibaba and Meituan fell 3% to 5%. China Merchant Bank fell 11% following the abrupt departure of the Chinese bank’s president. CSI300 saw a modest decline with coal miners, agricultural chemicals and fertilizer producers, and energy sector seeing demand. Stoxx 50 (EU50.I)  – Stoxx 50 futures are stuck in the mud ahead of a critical week with US Q1 earnings releases and Russia’s new offensive in Donbass marking the beginning of the next and more critical phase of the war in Ukraine. Stoxx 50 futures are trading around the 3,750 level this morning and is boxed into a tight trading range from 3,710 to 3,800. EURUSD  – the euro traded and closed below the prior cycle low of 1.0800 after an initial sell-off through that level in the wake of last week’s ECB meeting failed to stick. Yield spreads at the short end of the curve, relative to the US, have generally trended sideways for nearly a month, although longer yields have risen more aggressively in the US since late March. USD liquidity concerns as risk sentiment is poor and the market fears more aggressive Fed quantitative tightening may be the key driver here. Watching the next chart level at 1.0636, the low from early 2020. USDJPY and JPY crosses.  The JPY continues to run away to the downside, with USDJPY hitting 128.00 for the first time since 2002, as long US treasury yields notched a new cycle peak yesterday and will soon threaten the 3.00% level if they continue to rise, underlining the policy divergence with the Bank of Japan, that continues to stick with its yield-curve-control policy that caps 10-year JGB yields at 0.25%. Both the Bank of Japan and the Japanese Ministry of Finance have stepped up their verbal interventions against JPY volatility as recently as overnight, but until a policy shift is spotted, or real intervention is mobilized, the market is content to continue driving the JPY lower. The next major chart point is the early 2002 high near at 135.00. AUDJPY has also surged to fresh record highs of 94.50+ as the AUD was slightly firmer following the hawkish tilt in RBA minutes. Suzuki is heading for a bilateral meeting with the US and comments would be on watch. For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy? Gold (XAUUSD) attempted but failed to reach $2000, more a psychological than technical resistance level during Monday’s low liquidity session. Leveraged funds (futures) and asset managers (ETFs) both bought gold in the week to April 12, a sign the technical and fundamental outlook have – for now - aligned in support of the yellow metal. The World Bank cut its forecast for global economic growth while Fed’s Bullard talked up the prospect for a 75 basis point rate hikes given the need to raise rates to around 3.5% this year. While higher interest rates may weigh, worries about inflation, growth, and increased market volatility together with the geo-political uncertainties have maintain the upper hand. Support at $1965. Crude oil (OILUKJUN22 & OILUSMAY22) has extended its pre-Easter rally after Libya shuts its largest oil field amid protest, thereby draining an already undersupplied market further. Chinese fuel demand, currently estimated to be down 2 million barrels per day is likely to recover swiftly once lockdowns are lifted after China vowed to repair the economic damage. More than 500,000 barrels per day is currently offline in Libya and together with the EU attempts to phase out Russian oil imports, the market is expected to remain tight despite the announced release from strategic reserves held by the US and IEA members. Brent finding some resistance around $113.75 with a break potentially signaling a fresh push towards $120 per barrel. Copper (COPPERUSJUL22) reached its second highest ever close on Monday, as global mining disruptions continued to weigh on a market where exchange-monitored inventories are already at alarmingly low levels. Around 20% of Peru’s exports are out of action following local community protests. In addition, a Chinese government pledge to support the economy once lockdowns are lifted, and the increased urgency to reduced dependency on fossil fuels via electrification are likely to underpin the price further. Resistance at $4.86, a local high, and support at $4.65, the 50-day moving average. US Treasuries (IEF, TLT) and European Sovereign Debt. Despite the fresh hawkish talk from St. Louis Fed president Bullard, who is a voter at FOMC meetings this year, the short end of the US yield curve remains relatively steady, while long yields have continued to test higher as the US yield curve steepens. The next major obvious test for the long end is the 2018 high for the 10-year Treasury benchmark at 3.25% What is going on? World Bank downgrades global growth estimates. The World Bank cut its 2022 outlook to 3.2% from 4.1%, dragged down by Europe and Central Asia amid the Russian invasion of Ukraine. World Bank Chief Economist Carmen Reinhart said there is “exceptional uncertainty” in global markets and further downgrades cannot be ruled out. Get ready for more hawkish Fed talk this week. We had James Bullard on the wires yesterday, and he planted the seeds of a 75-basis points rate hike given that the Fed needs to get to neutral rate very soon. The base case for the May meeting is still a 50-basis points rate hike, and a final word on that should be watched from Fed Chair Powell on Thursday as he speaks at the IMF conference. Still, brace for more volatility in yields and further gains in the US dollar as Fed continues to raise the bar of its hawkishness. The Bloomberg Grains Subindex (AIGG:xlon) has returned to challenge to the March record high with the near month corn contract (CORNJUL22) exceeding $8 per bushel for the first time in almost a decade while wheat (WHEATJUL22) has also resumed its recent strong rally. Catalysts being the war in Ukraine, potentially reducing this year's corn crop by 40%, as well as drought and heat damage to crops in the US Midwest. In addition, the recent strong surge in US natural gas prices has further lifted the cost of fertilizer, thereby potentially seeing US farmers switch more acreage to less nutrient intensive soybeans from wheat and corn. What are we watching next? JPY intervention?  The verbal intervention from the Bank of Japan and the Japanese Ministry of Finance have failed to impress the market. At some point the Japan’s MoF may feel it is necessary to mobilize an actual intervention in the market, something it has a long history of doing, though in the past, ironically in the direction of avoiding further JPY strength, not weakness. These interventions may not achieve more than temporary success if the underlying policy and market dynamic don’t shift (I.e., the Bank of Japan sticking to its current policy while inflationary pressures and yields elsewhere continue higher). But the risk of tremendous two-way, intraday volatility should be appreciated. War in Ukraine developments as Ukrainian president Zelenskiy said that Russia is initiating an effort to take the Donbas region in Easter Ukraine. An isolated force of Ukrainian forces in Mariupol continues to hold out against Russian efforts to take the city. Earnings Watch.  The Q1 earnings season started last week with EPS beating in all cases but Schwab indicated that earnings momentum is intact among US financials. JPMorgan Chase’s earnings release showed higher than expected credit provisions which may be early signs that the credit cycle is moving into its next phase. This week the key focus is on Johnson & Johnson (today), Netflix (today), Lockheed Martin (today), Halliburton (today), ASML (Wed), Sandvik (Wed), Tesla (Wed), Procter & Gamble (Wed), CATL (Thu), Nidec (Thu), ABB (Thu), NextEra Energy (Thu), Snap (Thu). Tuesday: Shenzhen Mindray Bio-Medical, Johnson & Johnson, Netflix, Lockheed Martin, IBM, Halliburton,  Wednesday: China Mobile, China Telecom, ASML, Heineken, ASM International, Sandvik, Tesla, Procter & Gamble, Abbott Laboratories, Anthem, CSX, Lam Research, Kinder Morgan, Baker Hughes Thursday: Contemporary Amperex Technology (CATL), Sartorius Stedim Biotech, Nidec, Investor AB, ABB, Danaher, NextEra Energy, Philip Morris, Union Pacific, AT&T, Blackstone, Intuitive Surgical, Freeport-McMoRan, Snap, Dow, Nucor Economic calendar highlights for today (times GMT) 0800 – Switzerland SNB Weekly Sight Deposits 1215 – Canada Mar. Housing Starts 1230 – US Mar. Housing Starts and Building Permits 1605 – US Fed’s Evans (non-Voter) to speak 1630 – Switzerland SNB’s Jordan to speak 2350 – Japan Mar. Trade Balance 0115 – China Rate Decision Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:    
Will GBP Stay Unchanged? How Will Euro (EUR) To US Dollar (EUR/USD) React To CPI Releases!?

What A Plunge Of Japanese Yen (JPY)! US Dollar (USD) Is Really Strong! Will Bank Of Japan (BoJ) Raise The Interest Rate? USDJPY And More In Eyes Of Saxo Bank

Saxo Bank Saxo Bank 19.04.2022 12:06
Forex 2022-04-19 10:30 Summary:  The Japanese yen has seen a relentless decline over the last few weeks, underpinned by a widening yield differential between the US and the Japanese government bonds. As verbal interventions from the Bank of Japan and Ministry of Finance fail to be heard, we are looking at a subtle policy shift with the aim to manage volatility, or a real physical intervention. The JPY continues to run away to the downside, with USDJPY surging above 128.00 for the first time since 2002. The next major chart point is the early 2002 high near at 135.00. AUDJPY has also surged to fresh record highs of 94.50+ as the AUD was slightly firmer following the hawkish tilt in RBA minutes. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun The big why? US 10-year treasury yields have notched a new cycle peak and will soon threaten the 3.00% level if they continue to rise, widening the policy divergence with the Bank of Japan (BOJ), that continues to stick with its yield-curve-control (YCC) policy that caps 10-year Japanese government bond yields (JGB) yields at 0.25%. Both the BOJ and the Japanese Ministry of Finance (MoF) have stepped up their verbal interventions against JPY volatility as recently as overnight, but these have hardly had any effect. The BOJ conducted unprecedented four-day purchase plan into the end of its financial year on March 31 after the JGB yields had hit 0.25%, a ceiling the central bank had made clear in March last year. This further highlighted their commitment to capping yields. While the BoJ may be concerned about the volatility and the pace of JPY decline, the Bank is unlikely to be worried about its direction. In fact, BOJ rhetoric repeatedly suggests that it sees JPY weakness as good news for the economy and exports as well as a factor helping to spur imported inflation pressures. This is especially important if we note that GDP is still well below pre-COVID levels and core inflation is negative. Is inflation a concern? The rise in JGB yields has little to do with expectations that Japanese inflation is moving sustainably higher. CPI is expected to increase above the BOJ’s 2% (from 0.9% currently) target, but the central bank expects the move to be temporary. Much of the gains in inflation are on the back of base effects and higher energy prices, and underlying price pressures remain muted. Stripping out energy prices and fresh food clearly shows that core inflation is still very benign at multiyear lows at -1% y/y. Will the YCC be tweaked? We are probably starting to see the limit of the yield curve control program, as sustained BOJ purchases could be a problem for a central bank that already owns around half of government issues. Would the BOJ go Australia’s way that clumsily abandoned its peg in November? That would need more domestic demand for JGBs which is unlikely to be achieved. Historically, BoJ has been open to adjusting targeting range of bond yields. It widened the range to +/-0.25% from +/-0.20% in March 2021, which was changed in July 2018 from +/-0.10% before that. The BoJ could tweak its YCC policy to target 10-year yields form +/-25bps to +/-30bps to give itself more flexibility and manage volatility. This move, if effected, will be communicated as a measure to manage the increased volatility in bond markets, to ensure that it is not taken as a sign of any shift in policy thinking. Article on Crypto: Hot Topic - NEAR Protocol! Terra (LUNA) has been seeing a consistent downward price trend, DAI Should Stay Close To $1 What to watch next? Our sense is that until a policy shift is spotted, or real intervention is mobilized, the market is content to continue driving the JPY lower. Ironically, in the past, the MoF has mobilised intervention in the yen in the direction of avoiding further JPY strength, not weakness. These interventions may not achieve more than temporary success if the underlying policy and market dynamics don’t shift (i.e., the BOJ sticking to its current policy while inflationary pressures and yields elsewhere continue higher). But the risk of tremendous two-way, intraday volatility should be appreciated. Japan’s Finance Minister Suzuki is heading for a bilateral meeting with the US and comments would be on watch. Next BOJ meeting is scheduled for April 27-28, but focus will still be tilted more towards the Fed’s May meeting where a 50bps rate hike is expected along with the start of quantitative tightening. The only other way could be to hope that the yen would find a floor, and wait for BoJ governor Kuroda’s tenure to end in April 2023. This may then be followed up with rate hikes.
Fluctuations Of Forex Pairs! US Dollar's Strength Against Japanese Yen Performance (USD/JPY), Jason Sen Comments On Euro To Japanese Yen (EUR/JPY) And NZD/JPY Forex Rate

Fluctuations Of Forex Pairs! US Dollar's Strength Against Japanese Yen Performance (USD/JPY), Jason Sen Comments On Euro To Japanese Yen (EUR/JPY) And NZD/JPY Forex Rate

Jason Sen Jason Sen 25.04.2022 10:11
USDJPY running out of steam in severely overbought conditions as predicted but there is no sell signal yet so I cannot suggest shorts. A break above 129.50 however targets 129.90/95 then 130.25/35, perhaps as far as 130.75/85. First support again at 127.80/70. Expect strong support at 127.10/126.90. Longs need stops below 126.70. A break lower can target 126.00. EURJPY no sell signal yet despite overbought conditions but less than positive candles for the last 3 days probably signal a consolidation ahead. Having held the next target of 139.95/99 perfectly, if we do continue higher look for 140.40/50 & 140.85/95. Minor support at 138.70/50 but below 138.30 can target 137.70/50. ON further losses look for 137.20/10 with best support at 136.50/30 this week. Longs need stops below 136.10. Read next (By Jason Sen): Can (XAUUSD) Gold Price Plunge To $1800!? Silver Price (XAGUSD) To Decrease As Well? | FXMAG.COM NZDJPY holding below 8540 is a sell signal for today targeting 8500 & perhaps as far as strong support at 8450/30. Longs need stops below 8410. First resistance at 8545/65. Shorts need stops above 8485. EURUSD holds 37 YEAR TREND LINE SUPPORT AT 1.0760/20. Longs need stops below 1.0670. Obviously there is nothing more important than this level this week. Again we must beat 1.0840/20 to target 1.0920/40. A break above 1.0960 is a buy signal targeting 1.1030/50. USDCAD messy as we trade sideways for 9 months. We are back above the February lows & the sideways 100 & 200 day moving averages. Further gains test the strongest resistance for this week at 500 day & 100 week moving average at 1.2775/85. Shorts need stops above 1.2800. A break higher should be a medium term buy signal. Read next (By Jason Sen): Euro To US Dollar (EUR To USD): That's An Amazing USD Performance, Will USDCAD (Canadian Dollar) Stay Close? USDJPY (Japanese Yen) Beats Records! | FXMAG.COM First support at 1.2660/40. Longs need stops below 1.2620 GBPCAD support at the April low of 1.6293/81 held again. Strong resistance at 1.6400/20. Shorts need stops above 1.6450. A break higher is a buy signal initially targeting 1.6530/50. A break below 1.6265 is a sell signal. Look for 1.6190/80. Please email me if you need this report updated or Whatsapp: +66971910019 – To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk
Last Time S&P 500 Had Such A Bad Half Back In 1970. Gold (XAUUSD) Has Gone Below $1800. US PCE Made Yields Decrease. Nitori Earnings Are Released Today

What Bank of Japan Is Going To Do? Solid USD Against Japanese Yen, SEK (Swedish Krone) To Be Supported By Riksbank Shortly?

John Hardy John Hardy 27.04.2022 14:15
Summary:  The Japanese government is rolling out a large fiscal package to ease cost-of-living pressures at a time when inflation in Japan supposedly remains muted. This is entirely out of step with the Bank of Japan doubling down on its accommodative policy mix, which has driven the Japanese yen sharply weaker this year. Will the Bank of Japan be forced to capitulate tonight? FX Trading focus: Bank of Japan meeting tonight as pressure on policy mix mounts, EUR and GBP in for fresh pressure on Russian NatGas threats, AUD and SEK ahead of Riksbank The JPY has found a bit of support this week on the consolidation in global bond yields. Yesterday saw a strong US 2-year Treasury auction that helped take yields lower at the front end of the curve as well, with risk-off finally strong enough in the background to see US treasuries serving as a safe haven. The falling yields factor by itself brings the JPY some relief, as has the Chinese decision to allow a so-far modest revaluation of its currency lower that will bring more relative support to the JPY if that move is extended. But to really reset the JPY level back higher after its runs to multi-decade lows in real-effective inflation-adjusted terms, we will need to see a policy change from the BoJ. The BoJ meets tonight, and while very few are expecting a shift, it wouldn’t take much of a hint to suggest the pressure on the BoJ via the weakening currency is becoming too strong to ignore. Even a hint that the Bank is mulling tightening without specifics could be enough to trigger a JPY rally, but spelling out that the bank is willing to tinker with its yield cap policy on 10-year JGB’s would likely spark an even sharper move. Meanwhile, the political pressure has to be mounting sharply as well: consider that overnight the Japanese government has passed a near JPY 6.2 trillion (approx. $50 billion) stimulus package aimed at offsetting cost-of-living pressures that are sorely felt by the most vulnerable in Japan. This at a time when inflation supposedly remains unsatisfactorily low. For whom the inflation bell tolls is an critical question both in Japan and globally as we have to consider that these cost of living pressures that may only measure in the mid- to high single digits nationally could weigh 20% or more for the consumption basket at the lower end of the income spectrum, in terms of rent, heating, food, etc. It’s an explosive cocktail for politicians and Japan is set for important lower house elections in July. The BoJ may not move tonight, but it can’t remain an immovable object in a rapidly moving world forever. Keep in mind that Japan is on holiday Friday and out for much of next week, so this could aggravate the volatility if the BoJ does deliver any new guidance or policy twists. Chart: USDJPY Watching the USDJPY pair and JPY crosses closely tonight over the Bank of Japan meeting for the reasons outlined above. Technically, the pair seems to have shied away from a test of the 130.00 level, while on the downside, any BoJ policy surprise could deliver tremendous intraday volatility – easily 125.00 or lower, given that the recent break level to the upside was all the way down at 116.35. JPY traders should tread carefully, considering long volatility plays in the options market if wanting to express a short-term view. JPY cross action may prove higher beta than the reaction in USDJPY itself. As well, Japan will be out on holiday over next week during the May 4 FOMC meeting so liquidity may prove thinner than usual. If we see Kuroda-san doubling down on the existing policy and a fresh surge in global yields, the uptrend could be reinvigorated for a try toward 135.00. It’s a pivotal week for USDJPY either way, in all likelihood. Source: Saxo Group Fresh euro woes. The euro touched new five-year lows versus the US dollar today, in part on general risk off, but perhaps even more so after Russia used Poland and Bulgaria as guinea pigs in its threat to cut off supplies of natural gas for importers unwilling to pay for the gas in rubles. Poland saw the writing on the wall on Russian gas a long time ago and had moved to reduce its reliance before the war in Ukraine and has considerable coal-based power it can mobilize to cover some  of the shortfall, so the impact on the zloty is considerable, but need not spin out of control. Alas, Germany is the chief focus as a full shutdown would crater German economic growth on the need to ration supplies. Meanwhile, ECB member Kazaks said yesterday he is in favour of a July ECB hike – looks like consensus is gelling on that timing for lift-off. The UK does not import Russian gas, but is under as much pressure as any other European country on the impact of any Russian supply disruptions because it is connected to the continent’s gas network and suffers the price rises together with the continental countries. An excellent commentary from Bloomberg’s Marcus Ashworth lays out the pressures on the UK economy here as it faces a “trilemma of high inflation, slowing growth and rising taxes”, with a collapsing currency possibly forcing the Bank of England to hike rates more than it would otherwise do (watching EURGBP as much as GBPUSD for the relative pressure on the UK as I would have already expected sterling to underperform more there than it has). GBPUSD looks set for a test of 1.2000 and possibly more to the downside if we are set for a significant deleveraging event across risky assets here. The Aussie tried to get a boost on news overnight that Chinese leader Xi Jinping called for an “all out” infrastructure building push to spark economic growth, but there are few details. As well, short Australian yields touched new cycle highs while yields elsewhere consolidated after the Q1 Australian CPI report came in far hotter than expected at 5.1% YoY vs. 4.6% expected and the core “trimmed mean” was out at 3.7% YoY vs. 3.4% expected. This has strongly raised the odds of a rate hike at the RBA meeting next Tuesday to above 70%. The solid drop in the trade-weighted AUD in recent days after it had spiked to near a 5-year high has likely helped the RBA to go ahead and just get started already. The Riksbank is widely expected to deliver its first rate hike since moving away from NIRP last year, with a 25 basis point move. Watch the rate guidance after Governor Ingves recently failed to push back against the market pricing a greater than 2% policy rate by the beginning of 2024 – while the February Riksbank meeting still forecast lift-off not to arrive until 2024! I like fading EURSEK upside, but the risk deleveraging here makes this hazardous tactically. Table: FX Board of G10 and CNH trend evolution and strength.Note especially the enormous positive momentum shift in the JPY head of tonight’s BoJ meeting – will BoJ deliver something that spikes momentum further or back to the downtrend? The USD uptrend reading of 8 is getting into extreme territory, but won’t necessarily calm if risk deleveraging continues/accelerates. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.The “hottest” market in a long while, as can be seen in all of the extreme ATR readings (the dark orange color indicates we are in the top decile of volatility in ATR over last 1000 trading days). Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Mar. Advance Goods Trade Balance 1400 – US Mar. Pending Home Sales 1600 – ECB President Lagarde to speak 2100 – New Zealand RBNZ deputy Hawkesby to speak 2230 – Canada Bank of Canada Governor Macklem to speak in Senate testimony 2350 – Japan Mar. Industrial Production 0100 – New Zealand Apr. ANZ Business Confidence survey 0130 – Australia Q1 Export / Import Prices
FX Update: Bond rally supercharges JPY comeback rally. | Saxo Bank

FX Update: Bond rally supercharges JPY comeback rally. | Saxo Bank

John Hardy John Hardy 12.05.2022 16:01
Summary:  An extension of the rout in risky assets has continued to drive the US dollar higher against the smaller currencies and most G10 currencies as well, but the Japanese yen has not only taken on a new shine, but is even sharply stronger against the strong US dollar as global bonds have suddenly rediscovered their safe haven appeal. Elsewhere, HKD is worth watching as the HKMA intervened for the first time of this cycle to maintain the top of the USDHKD band. FX Trading focus: JPY woke up and smelled the coffee. Watching HKD as USD presses upper level of USDHKD band. The JPY upside potential has been more fully realized since yesterday on the heavy weight of falling yields in global sovereign bond, which are finally serving their function as a go-to safe haven in an environment of generally risk deleveraging. The JPY is even handily outpacing the ongoing strength in the US dollar as the yield focus dominates. And the technical damage in JPY crosses is spreading: NZDJPY and GBPJPY, the latter our focus yesterday, are already trading back into old ranges that preceded the JPY sell-off sparked by the commodity rally in the wake after Russia invaded Ukraine. Now watching AUDJPY and EURJPY for whether the feat is repeated there (key levels around 86.00 and 134.00, respectively), and CNHJPY has come down hard, with more to come. More thoughts on the most important USDJPY pair below in the chart discussion. The JPY can continue higher, but the price is far “fairer” now relative to long term bond yields. Yields must extend lower still, possibly with a helping hand from crude oi and LNG prices for a full reversal of the JPY sell-off since late February.  Chart: USDJPYYesterday, our focus in JPY crosses was on GBPJPY, which took out the 160.00 and 158.00 area supports yesterday. Today we have a look at the big one: USDJPY and what levels might trigger a more notably slide. Arguably, the first of these has already been under strain today in the 128.50 area. Regardless, the direction of the US 10-year benchmark yield is the key coincident indicator, with global energy prices a secondary indicator. The next support area below is the 127.03 pivot low followed perhaps by the 125.00 area, which was a stopping point on the way up. Source: Saxo Group Sterling suffered a sell-off to new lows in the wake of the Q1 GDP data, which showed a +8.7% growth rate, slightly below expectations, but a -0.1% month-on-month figure for March, with weak production figures to boot. The March Trade Balance data was also out and showed a toe-curling negative £23.8B trade balance, a staggering figure. Still, after a run to fresh lows against the G3 currencies, the EURGBP rally reversed rather sharply, in part as EURUSD tipped over to new lows after a couple of weeks of defending the 1.0500 support area. All traders should monitor the crypto situation as a possible aggravator of additional volatility risk across markets. The TerraUSD “stable coin” broke its parity level with the US dollar earlier this week and traded as much as 70% below par. Then yesterday, a key Bitcoin support level at 30,000 broke, possibly inspiring the instability of the Tether stable coin, which is a commonly used as a kind of parking space between going in and out of crypto trades and in and out of the crypo market itself. The Tether coin traded as much as 5% below par against the US dollar this morning before the whole crypto-complex recovered. More directly pertinent to FX, we have to watch the Hong Kong dollar (HKD), as the USD strength has taken the USDHKD exchange rate to the upper limit of its band at 7.85 and has seen the Hong Kong Monetary Authority out intervening for the first time of this cycle overnight. The HKMA will also need to copy Fed policy to avoid the worst of pressure on the HKD, even with Hong Kong’s economy in a funk. The HKD band is one of those legacy set-ups that makes little sense here almost forty years after its creation, but Hong Kong remains a key gateway into and out of the mainland Chinese economy, and China probably doesn’t want to add HKD instability to its long list of challenges. Note the Chinese demand concerns continuing to weigh on the copper price, which has punched to the lowest reaches of the range since early 2021. This in turn weighs on the Aussie, which itself has punched to new lows for the cycle. The CAD has gotten off easy so far by comparison, perhaps as oil prices remain in the higher range here – but after breaking above resistance, if USDCAD loses its tethering to the 1.3000 area it is in danger of a sharp extension higher. Table: FX Board of G10 and CNH trend evolution and strength.We have noted the euro resilience of late, but signs of this crumbling today as EURUSD, EURCHF and especially EURJPY come under pressure. But the development of note here is the strong revival of the JPY momentum and outright positive trend measurement in recent days. Elsewhere, CAD looks too strong with this backdrop, although there is quite a race to the bottom of late among the weakest horses in G10 FX. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Note EURJPY and CADJPY trying to join other JPY crosses in flipping to the negative side after the sharp JPY rally today. All G10 currency pairs save for a few GBP pairs (due to Brexit-related events) are in the highest 10% of their ATRs of the last 1000 trading days, as shown in the dark orange shading for the ATR readings. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. PPI 1230 – US Weekly Initial Jobless Claims 1800 – US 30-year T-Bond auction 1800 – Mexico Overnight Rate Announcement