|Day's Range||108.55 - 108.863|
|52 Week Range||104.8710 - 114.1840|
The markets are relatively calm overnight despite the threat of countermeasures by China to the U.S. legislation supporting the Hong Kong protesters. However, investors have taken precautionary steps by buying the Japanese Yen, gold and Treasury bonds for protection.
Most Asian stocks are following their US counterparts higher, after strong earnings reports out of US banks gave equities another reason to climb higher, after the risk-on momentum from the US-China trade truce faded.
The US dollar pulled back a bit during the trading session on Tuesday, as we continue to press against a major area of resistance in the USD/JPY pair.
The British pound has been consolidating against the Japanese yen during the trading session on Tuesday, as we initially tried to break above the 200 day EMA but rolled over to show signs of weakness again. Ultimately, major decisions need to be made.
It was a quiet Monday session with the U.S. and parts of Asia out for bank holidays. Risk assets skewed lower, and US equities fell back a little on Monday after China signalled it wants more discussion to iron out details of any partial deal before signing it, including the removal of added tariffs planned for December.
The US dollar chopped back and forth during the trading session on Monday as the 200 day EMA continues to cause bits and pieces of resistance. Beyond that, the market is extraordinarily sensitive to a handful of issues going on around the world, not the least of which would be the lackluster performance of US/Chinese negotiators.
The British pound has been very choppy during trading on Monday, as we continue to see a lot of back-and-forth when it comes to risk aversion. The 200 day EMA has been tested, and it now has proven that it remains resistive. That being the case, a break above that, especially on a daily close, would be very strong.
A “risk off” day on Monday should keep the pressure on the USD/JPY. This is already being fueled by a report from Bloomberg News that said China needed to have further discussions before it would sign off on the so-called “phase one” trade deal President Donald Trump announced on Friday.
Based on the early price action and the current price at 108.318, the direction of the USD/JPY on Monday is likely to be determined by trader reaction to the uptrending Gann angle at 108.235.
The Dollar found strong support early, as the markets considered the implications on existing tariffs on the economic outlook. Brexit chatter also weighed.
The announcement of the first phase of a substantial trade deal was obviously bullish for the Dollar/Yen, but since there was so much long speculation ahead of the announcement, most of the good news was probably priced into the Forex pair.
The US dollar has rallied significant during the week, reaching towards the ¥108.50 level. At this point, there is a significant amount of resistance just waiting to happen, so if it were to be broken it’s very likely that the market could go looking towards the ¥110 level. However, if we break down, the ¥107 level should be supportive.
The British pound skyrocketed during the week on trade hopes involving the Brexit situation. As we are starting to see signs of progress in those negotiations. However, we have not seen a true decision made, so a lot of this could be a simple short covering.
The US dollar has rallied significantly during the trading session on Friday, crashing into the ¥108.50 level. The 200 day EMA is just above, and it’s very likely that the market could turn right back around, based upon basic technical analysis.
The British pound rocketed higher during the trading session on Friday, as the hoped-for Brexit being worked out is reaching a fever pitch. Having said that, the market is still fragile in the sense that this is probably more short covering than anything else, and could turn around at the drop of a dime. If there is some type of negative headline out there, it’s likely that the pair will fall apart.
The USD/JPY is going to continue to more higher and could even accelerate to the upside if buyers can take out the recent top at 108.478. This could create the upside momentum needed to challenge the August 1 top at 109.317. A breakout will be triggered by the announcement of any positive news from the trade talks.
Investing.com - The pound jumped to an intraday high on Friday after U.K. Prime Minister Boris Johnson said he thought there was a way forward for a Brexit deal with the European Union, adding that “there is work to be done.”
The US dollar initially fell against the Japanese yen as a rumor came out that Chinese officials were leaving a day early from the talks in Washington DC. Once the truth came out, the market turned around in more of a “risk on” attitude.
The British pound initially pulled back during the trading session on Thursday but then turned around to crash into the top of several candlesticks from earlier in the week. That being said, it’s very likely that the markets will find some resistance.
Investing.com - The U.S. dollar fell on Thursday after consumer prices rose less than expected in September, increasing the chances of the Federal Reserve cutting rates before the end of the year.
We’re expecting to see more whipsaw action on Thursday with the release of a plethora of positive and negative headlines as traders seek clarity as to the progress of the trade talks.