USDJPY in the middle zone
This Friday's Asian open has started cold concerning the Fed's effect on Asia-Pacific crosses this time around. Sentiment especially from China on tariffs in the Eurozone has heightened concerns of a renewed trade war. For Chinese companies, it is not so much a hindrance as a temporary restraint that is likely to be solved by their strategic alliances along the Silk Road such as Morocco, their new strategic ally in trading Chinese goods in Europe. The Yuan (USDCNY) has reached a nearly seven-month high. The reign of Chinese cars has taken hold in countries such as Thailand or Brazil and Chinese competition from companies like BYD supported by the Chinese government, have no scruples in supporting the market, which has led Top companies like Tesla to cut their structures, have generated that the European and American governments feel the obligation to protect their respective local companies. In relation to the Australian dollar (AUDUSD) and Singapore dollar (USDSGD) currencies have shown opposite results being -0.1% for the former and +0.1% for the latter, the South Korean Won (USDKRW) rose +0.2% and the Indian rupee (USDINR) rose +0.2% having the latter at record highs.
Meanwhile, the Japanese yen has weakened sharply after the Bank of Japan adopted a dovish tone. The BoJ has decided to keep its rates steady, seeking only to provide a clear signal of its action plans, trying to reduce bond purchases in July, while it will try to obtain more data to be able to take action. This has disappointed speculators and hence the hike. They have not offered much of a clue as to the governor's plans to raise rates after the last historic hike in March.
As we said, regional currencies have been pressured by the dollar price rally, recovering much of the devaluation suffered during the week, as signals from the Federal Reserve have countered the sentiment of controlled inflation and at the same time, the Bank of Japan (BoJ) is showing restraint in trying to control inflation causing the Yen to weaken along the way. It has been the worst performer with the USDJPY up 0.87% at 158 yen to the dollar, and then in the early European session it has plunged -0.41% to approximately 157.45.
Looking at the chart, at 7am this morning an overbought RSI signal was given at around 77% and is currently in the middle zone at 57.13%. The shape of the bell is mono bell, being its control point zone (POC) 157.191. It would not be unusual to see a move to this zone again since it is the most traded price zone since May 23rd.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Meanwhile, the Japanese yen has weakened sharply after the Bank of Japan adopted a dovish tone. The BoJ has decided to keep its rates steady, seeking only to provide a clear signal of its action plans, trying to reduce bond purchases in July, while it will try to obtain more data to be able to take action. This has disappointed speculators and hence the hike. They have not offered much of a clue as to the governor's plans to raise rates after the last historic hike in March.
As we said, regional currencies have been pressured by the dollar price rally, recovering much of the devaluation suffered during the week, as signals from the Federal Reserve have countered the sentiment of controlled inflation and at the same time, the Bank of Japan (BoJ) is showing restraint in trying to control inflation causing the Yen to weaken along the way. It has been the worst performer with the USDJPY up 0.87% at 158 yen to the dollar, and then in the early European session it has plunged -0.41% to approximately 157.45.
Looking at the chart, at 7am this morning an overbought RSI signal was given at around 77% and is currently in the middle zone at 57.13%. The shape of the bell is mono bell, being its control point zone (POC) 157.191. It would not be unusual to see a move to this zone again since it is the most traded price zone since May 23rd.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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