|Day's Range||109.88 - 110.223|
|52 Week Range||104.8710 - 112.2260|
The US dollar has rallied a bit against the Japanese yen early on Monday, as we continue to see strength in general. At this point, the market will more than likely find buyers on dips as we have clearly broken through a major level at one point last week.
The British pound initially gapped lower on Monday, but then turned around to show signs of strength. At this point, the gap has been filled, and it looks as if it is trying to continue going higher.
Monday is a day off in the American markets due to the Martin Luther King’s Day. Because of the holiday, trading on other markets also promises to be muted.
Dear Traders, The USD/JPY has already reached M H5 camarilla level. We can see that the pink dot appeared, signaling for a potential counter trend move.
The Bank of Japan will issue its Outlook Report and Monetary Policy on Tuesday. It is expected to leave interest rates and policy unchanged. Also expect policymakers to say they are optimistic about a recovery in the economy because of the signing of the U.S.-China trade deal.
Investing.com - The U.S. dollar was largely flat in European trading Monday, with the U.S. holiday providing little incentive for traders to take risks. That said, the greenback still looks strong against its main competitors.
The PBoC left LPRs steady this morning, with some time likely needed to asses the impact of recent cuts and the phase 1 agreement.
Monday will be the eighth session up from the last main bottom at 107.651. This puts the USD/JPY in the window of time for a closing price reversal top. This chart pattern won’t change the main trend to down, but it could trigger the start of a 2 to 3 day correction.
The Aussie and Kiwi were also underpinned by the inking of the trade deal, but domestic economic concerns limited gains as well as increasing chances of central bank rate cuts. Demand for higher-yielding assets drove the Japanese Yen lower.
The US dollar broke above the ¥110 level during the week but continues to struggle above there. That being said though, this is a market that looks as if it is ready to go higher over the longer term, as we are now above the 200 week EMA.
The British pound rallied against during the trading week to break above the 200 week EMA against the Japanese yen. This is a be decidedly “risk on” move, but there is a lot of noise above that will continue to make this messy.
The British pound did get a bit of a shock during the trading session on Friday as retail sales missed the expected figures. That being said, it looks as if the market is ready to recover.
The glass of economic data is half full if we estimate the reaction to the macroeconomic data. This applies to both last Friday’s U.S. employment report, and China’s GDP figures released this morning. The published data for the 4th quarter of 2019 showed that the economy slowed down to 30-year lows.
The British pound broke higher during the trading session on Thursday, as we have cleared a little bit of resistance in the form of the ¥143.50 level.
The Bank of Japan is expected to keep monetary policy steady next week and nudge up its economic growth forecast, as the U.S.-China trade deal and de-escalation in Middle East tensions take some pressure off the central bank for more stimulus.
Based on the early price action, the direction of the USD/JPY the rest of the session on Thursday is likely to be determined by trader reaction to the former main top at 109.930.
Investing.com - The U.S. dollar is largely unchanged in European trade early Thursday, as a degree of calm prevails following the signing of the Sino-U.S. trade deal.