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JPY is still boosted, before the Chinese holidays ending

Discussion in 'Current Market Sentiments' started by fx-recommends, Feb 10, 2016.

  1. fx-recommends

    fx-recommends Content Contributor

    Aug 6, 2008
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    USDJPY Daily 10-02-2016 06-37-34 ص.jpg

    The lower interest rate outlook in US is still dominating the current market sentiment weighing down on the greenback boosting demand for the gold amid worries about the global economic performance.

    after forming lower highs, The oil benchmarks turned down again to test Jan. 20 lows with continued economic deceleration signs in china and US dragging the demand expectations down further.

    IEA could spur the declining this time by saying that the demand for OPEC production will fall this year by about 0.1m barrels a day to 31.7m barrels, while the organization which accounts for about 35% of the global production is producing currently what's close but below 33m barrels a day.

    So, it is not worry about oversupplied oil markets because of Iran only but also lower demand because of the economic slowdown.

    Brent could barely hold above $30 per barrel but it dived well below its daily SMA20 again, after failing to have a place again above its daily SMA50.

    USDJPY which rose to form a lower peak at 121.67 by BOJ's decision to apply negative interest rate is now trading close to 114.50 undermined by increasing demand for safe assets with intensifying selling in the equities markets.

    As the risk-off sentiment usually boosts demand for the Japanese yen which has the lowest cost financing burden among the major currency with JGB 10YR bond yield well below zero currently.

    The Japanese yen has been exposed to verbal intervention from the Japanese Vice Finance Minister for International Affairs Asakawa and the Fin Min Aso, after this recent excessive movement of the Japanese yen, despite BOJ's action which could support Nikkei 225, before resuming its retreating which drove it below 15700 today.

    From another side, it seems that Trump's gains in the presidential race spurs demand for safe haven because of his aggressive talking which is looking most of time undiplomatic.

    While USDJPY can be exposed to further falling with the Chinese markets returning from holidays, as The Japanese yen can gain benefits from the Chinese Yuan suffering, as an Asian competitive reserve currency.

    USDJPY depreciation reached 114.16 until now and the way down can be met by Nov. 10, 2014 low at 113.84, while the way down below it is looking slippery with no seen supporting bottom on the daily charts, before 110 psychological level.

    USDJPY has been exposed to more stop buying orders, after breaking 115.55 which has been the low of Dec. 16, 2014 to open this new range of trading.

    Jan US Labor report could give USDJPY chance to form only an intermediate resistance at 117.51 through this falling because of the current bearish market sentiment.

    USDJPY daily RSI barely into the oversold area below 30 reading 29.865 and also its daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having its main line in the oversold area below 20 reading now 12.205 and also its signal line which is reading now 11.176.

    USDJPY Daily MACD (12, 26, 9) which is less sensitive to the volatility is having its main line well below the zero line at -0.9368 and also its signal line which has been in the negative region since last Dec. 11 is referring today to -0.3705 to reflect the accumulating downside pressure.

    USDJPY daily Parabolic SAR (step 0.02, maximum 0.2) is in relatively high place above the trading rate, after this massive falling to read today 119.96 in its sixth day of being above the trading rate.

    Important levels: Daily SMA50 @ 119.47, Daily SMA100 @ 120.36 and Daily SMA200 @ 121.38 which are existing also in relatively high places after ending side way of trading above 115.55


    S1: 114.16
    S2: 113.84
    S3: 110
    R1: 117.51
    R2: 120
    R3: 121.67

    Have a good day

    Kind Regards
    Global Market Strategist
    Walid Salah El Din
    Mob: +20 12 2465 9143
    E-Mail: mail@fx-recommends.com
    #1 fx-recommends, Feb 10, 2016
    Last edited: Feb 10, 2016

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