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AUDJPY - a key barometer of risk - is holding above key supportDespite the turbulence across global assets these past two weeks, AUD/JPY is opting to hold above key support and resistance levels including the 2022 low and 2021 high. Investors remain on edge as they cannot be sure that the worst is behind us, and there is a risk that another bank will 'break' under the pressure of higher rates, bad management and / or face another bank run. But what if none of this materialises? Or the Fed is not as dovish as market pricing currently implies. Perhaps the real risk is that it's not that risky, and that could leave room for an upside surprise. Even if AUD/JPY does break below 87.00, we'd prefer to see a break beneath the 2021 high of 86.26 before calling a major top on the weekly charts. The fly in the ointment is the FOMC meeting, because if they're not as dovish as hoped it could pressure risk assets such as indices and AUD/JPY. Yet a dovish meeting could support sentiment and send it higher. Either way, it is worth watching AUD/JPY around current levels as it could help signal the next likely directional move for risk assets in general.
by CityIndex
AUDJPY: Reversal pattern on 4-hour chartOn the daily chart, the AUD/JPY pair is in a strong support area, where the yearly trendline intersects with the monthly uptrend line and a monthly zone, in addition to a bearish weekly trendline, Fibonacci 61.8%, and the 100-week moving average. This indicates a high likelihood of strong price support at the level of 87.6. However, on the 4-hour timeframe, there are three consecutive bottoms and divergence on momentum indicators, which is a strong reversal pattern. The price needs to break through three obstacles, including a local downtrend line, a resistance level of 89.5, and the 50-period moving average on the 4-hour timeframe, before it can rise. Once these obstacles are overcome and the price stabilizes above 89.55, there will be a strong and rapid selling signal towards 91.5 as the first target and 92.8 as the second target. ------------------------------------------------------------------------- Let me know your thoughts in the comments, and show your support by liking the idea. Please follow if you're interested in more ideas like this. Your support is greatly appreciated!
Long
by Candlestick_OB
USDJPY Outlook 20th March 2023Similar to the price action on Gold, as uncertainty in the market grows and confidence over the banking structure weakens, investors are seen shifting towards reserve commodity and currencies. This is why the Yen has strengthened, together with the weakening of the DXY, leading to the USDJPY being pressured to trade steadily lower. The USDJPY currently trading at the 132 price level could see further downside - if the price maintains below the bearish trendline, and - if the price breaks below the 131.50 support level. Downside potential could see the USDJPY reach the 129.80 support level which was last tested in February. Alternatively, if the USDJPY bounces strongly from the 131.50 support level, the immediate resistance level is at 133.75 which coincides with the 61.8% Fibonacci retracement level (with an interim resistance level at 132.60)
Short
by JinDao_Tai
5
GBPJPYGBPJPY has been examined in different dimensions: 1- Strong supply and demand levels that I identify with my own indicator and system. 2- The structure of recently formed waves 3- Current market momentum 4- The structure of classical and price patterns In this idea, I identified the direction of the market in different ways and in the second step, I analyzed the potential of continuation or reversal. Usually, paying attention to the trend and strength of the trend can greatly increase the accuracy of the analysis. In general, I tried to describe the continuation of the movement in the simplest possible way in the diagram. ⚠️ Disclaimer: This is a personal opinion and you are responsible for any trading decisions.
Long
by HamidRamezani1992
CADJPYGood Night :) GBPAUD has been examined in different dimensions: 1- Strong supply and demand levels that I identify with my own indicator and system. 2- The structure of recently formed waves 3- Current market momentum 4- The structure of classical and price patterns In this idea, I identified the direction of the market in different ways and in the second step, I analyzed the potential of continuation or reversal. Usually, paying attention to the trend and strength of the trend can greatly increase the accuracy of the analysis. In general, I tried to describe the continuation of the movement in the simplest possible way in the diagram. ⚠️ Disclaimer: This is a personal opinion and you are responsible for any trading decisions.
Short
by HamidRamezani1992
Trend continuation to 140Price is likely to continue moving in channel, as it reversed at 130 with gap breakout from downtrend. Next target is 140. Here we are using dynamic moving average support called VIDYA (Variable Dynamic Index) by Chande Tushar of 7 periods from daily, weekly and monthly, of the opens. Weekly candle closed above 135, another indication it will continue higher in the trend. Most of retailers on myxbook outlook for Yen are posititoned short, we use contrarian approach. FOR EDUCATIONAL PURPOSES ONLY.
Long
by ICFX
Multi-Currency Fundamental Macroeconomic Update | 3.14.23US stock futures declined on Wednesday by about 0.1% after the previous day's market rally, in which all three major indexes finished higher. Dow rose by 1.06%, S&P 500 jumped by 1.65%, and the Nasdaq Composite rallied by 2.14%. The banking sector staged a comeback rally as investors shrugged off fears of a systemic risk. Investors look forward to retail sales and producer price index data on Wednesday, as well as earnings reports from Adobe, Five Below and Oatly, among others. Inflation slowed to 6% in February of 2023, in line with market forecasts, the lowest since September 2021, and compared to 6.4% in January. The Bank of England is expected to increase rates by another 25 basis points this month, marking the 11th consecutive rate hike. The British pound remained above its over three-month low of $1.18 touched on March 8th, holding around $1.21, its strongest level since February 21st. Investors await British finance minister Hunt's new budget due Wednesday. The growth in pay in Britain eased in the three months to January. Total pay grew by an annual 5.7%, slowing from 6.0% in the previous period, while pay excluding bonuses rose by 6.5%, down from 6.7%. The offshore yuan appreciated past 6.9 per dollar, recovering further from two-month lows on positive signs for policy continuity. The current central bank governor and finance and commerce ministers are set to keep their posts, which boosted the currency. China's inflation rate fell to a one-year low in February, and producer prices also declined for the fifth straight month in February. The People's Bank of China left its key lending rates unchanged for the sixth straight meeting, as widely expected. In regular trading on Tuesday, the Dow gained 1.06%, the S&P 500 jumped 1.65% and the Nasdaq Composite rallied 2.14%, with all 11 S&P sectors finishing higher led by communication services, technology and financials. Investors were betting that the worst of the fallout from the collapse of Silicon Valley Bank and Signature Bank had passed. The market also digested data showing US annual inflation slowed further to 6% in February, in line with expectations. Investors now look ahead to retail sales and producer price index data on Wednesday, as well as earnings reports from Adobe, Five Below and Oatly, among others. The annual inflation rate in the US slowed to 6% in February of 2023, the lowest since September of 2021, in line with market forecasts, and compared to 6.4% in January. Food prices grew at a slower rate (9.5% vs 10.1%) while the cost of used cars and trucks continued to decline (-13.6% vs -11.6%). Also, costs slowed sharply for energy (5.2% vs 8.7%) and fuel oil (9.2% vs 27.7%) with gasoline prices falling 2% after a 1.5% rise in January. On the other hand, prices rose faster for electricity (12.9% vs 11.9%) and shelter (8.1% vs 7.9%). Core inflation which strips out the cost of food and energy edged lower to 5.5% from 5.6%. Compared to the previous month, the CPI rose 0.4%, following a prior 0.5% gain and also matching forecasts. The core rate, however, edged higher to 0.5% from 0.4%, compared to forecasts of 0.4%. Inflation in the US remains three times above the Fed's target of 2%. source: U.S. Bureau of Labor Statistics The euro extended gains to trade above $1.07, hovering around its strongest level since February 14th, and up from a two-month low of $1.05 touched on March 8th. Global markets were hit by concerns over the US financial system despite US authorities' latest efforts to limit the fallout from the collapse of SVB , raising the chances that the Federal Reserve might take a more cautious approach and deliver a 25 basis point hike at the March meeting, instead of a 50 basis point hike previously expected. Meanwhile, investors await the European Central Bank's policy statement due on Thursday, with policymakers expected to raise interest rates by another 50 bps . Still, the bloc's central bank might adopt a more dovish tone due to the ongoing risks to financial stability. The dollar index traded around 103.5 on Wednesday, hovering near its weakest levels in a month as investors reassessed the outlook for Federal Reserve monetary policy in light of the recent turmoil in the US banking sector and the latest US inflation report. The greenback came under heavy selling pressure this week as the collapse of Silicon Valley Bank and Signature Bank fueled speculations that the Fed could pause its tightening campaign to avoid further risks to the financial system. Fresh data also showed that the annual inflation rate in the US slowed further to 6% in February, the lowest since September 2021, in line with expectations. Money markets are now pricing an 80% chance of a 25 basis point rate hike from the Fed next week, lower than the half-percentage point increase expected a week ago. The British pound held above $1.21, hovering around its strongest level since February 21st and remaining above an over three-month low of $1.18 touched on March 8th. Investors dumped the dollar on hopes the Federal Reserve might take less aggressive approach on monetary policy going forward after the collapse of Silicon Valley Bank put into question the strength of the US banking system. Elsewhere, the Bank of England is seen increasing rates by a further 25 bps this month, an 11th consecutive rate hike, before ending the current tightening cycle. On the data front, growth in pay in Britain, which the UK central bank is watching closely as it weighs up when to pause its run of interest rate hikes, eased in the three months to January. Total pay grew by an annual 5.7%, slowing from 6.0% in the previous period, while pay excluding bonuses rose by 6.5%, down from 6.7%. Investors now await British finance minister Hunt's new budget due Wednesday. The offshore yuan appreciated past 6.9 per dollar, recovering further from two-month lows on positive signs for policy continuity, with the current central bank governor and finance and commerce ministers set to keep their posts. The yuan also gained as the collapse of Silicon Valley Bank prompted US regulators to protect depositors and financial institutions, giving rise to speculations that the US Federal Reserve could take a less aggressive approach to policy tightening to avoid further risks to the financial system. Meanwhile, latest data showed that China’s inflation rate fell to a one-year low in February, bolstering bets that the central bank would maintain an accommodative stance. Producer prices also declined for the fifth straight month in February. Last month, the People's Bank of China left its key lending rates unchanged for the sixth straight meeting, as widely expected. The Swiss franc strengthened past 0.92 per USD, approaching the 18-month high of 0.9 touched on February 1st as fears surrounding the US financial sector pressured the dollar and erased expectations of sharp rate increases by the Federal Reserve . On the other hand, the hawkish outlook for the Swiss National Bank supported the local currency as policymakers continued to flag risks of elevated inflation due to the second-round effects of high energy prices. Domestic inflation jumped to 3.4% in February, well above the SNB's forecasts of 3% and market expectations of 3.1%, adding to bets that the central body will continue its rate-hiking path next week. Additionally, recent data showed that foreign exchange reserves at the SNB fell to CHF 770.6 billion in February, the lowest since 2019, suggesting the SNB was intervening in currency markets to support the franc. The Indian rupee depreciated past 82.25 per USD from the one-month high of 81.7 touched on March 3rd, weakening despite the sharp retreat in the DXY as strong import demand weighed on the local currency. The volatility of the greenback suggested that Indian investors also exited their short dollar positions, increasing selling pressure on the rupee. Still, concerns about higher inflation strengthened hawkish bets for the Reserve Bank of India. Retail prices rose by 6.44% annually in February, above expectations of 6.35%, and marking it the second month inflation surpassed the central bank’s upper target of 6%. Economists project the lender to raise its key rate by 25bps in the upcoming April meeting, prolonging the effort to curb elevated retail prices and erasing previous expectations that Indian borrowing costs could peak by the first quarter of 2023. The British pound held above $1.21, hovering around its strongest level since February 21st and remaining above an over three-month low of $1.18 touched on March 8th. Investors dumped the dollar on hopes the Federal Reserve might take less aggressive approach on monetary policy going forward after the collapse of Silicon Valley Bank put into question the strength of the US banking system. Elsewhere, the Bank of England is seen increasing rates by a further 25 bps this month, an 11th consecutive rate hike, before ending the current tightening cycle. On the data front, growth in pay in Britain, which the UK central bank is watching closely as it weighs up when to pause its run of interest rate hikes, eased in the three months to January. Total pay grew by an annual 5.7%, slowing from 6.0% in the previous period, while pay excluding bonuses rose by 6.5%, down from 6.7%. Investors now await British finance minister Hunt's new budget due Wednesday. The Turkish lira held at a record low of 18.9 per USD after the central bank of Turkey resumed rate cuts. The TCMB cut its main interest rate by 50bps to 8.5% in its February meeting, matching market expectations. It was the first rate decrease since November, aiming to further loosen financial conditions and stimulate the recovery of supply chains after the earthquake hit the country. The central bank has cut its key rate by 10.5 percentage points since September 2021, triggering a crisis for the lira, soaring inflation , and a largely unbalanced current account. Inflation in Turkey soared to 86% in October before easing back to 58% in January, as the lira plunged 55% since the start of the bank's loosening cycle and compounded surging energy costs that Turkey must import. The TCMB also extended anti-dollarization strategies to support the currency. The Russian ruble was steady at around 75 per USD in March, hovering close to its lowest since April 2022 amid limited foreign currency inflows to the national economy. Sanctions and embargos on the country's energy exports compounded the impact of lower international energy prices, reducing turnover for Russia's vital revenue source and limiting demand for the local currency. Data from the Finance Ministry showed that oil and gas revenues sank by 46.4% from the prior year. Lower energy sales hurt the ruble despite intervention by the CBR , which has been selling an average of RUB 8.9 billion worth of foreign currency per day since January to offset depressed capital inflows. Meanwhile, until April 6th, the Finance Ministry will be selling RUB 120 billion in foreign currency, as increased demand from China and India is expected to boost energy shipments. The Brazilian real was changing hands around $5.15, a dramatic reversal from an eight-month peak of $4.95 touched on February 2nd, as stronger-than-expected US economic data fanned concerns about an aggressive Federal Reserve , thus spurring demand for the dollar. However, the downside move has been limited by speculation that the Bank of Brazil would hold interest rates higher for longer. Officials kept the benchmark Selic at 13.75% for the fourth straight meeting in February, as projected, but struck a somewhat hawkish tone due to worries over rising inflation expectations. Policymakers and investors have been concerned about Brazil's fiscal policy since President Lula da Silva took office earlier this year. Lula has constantly hinted at the need to boost social programs and loosen inflation targets.
U
by TayFx
EUR/NZD Fundamental + Technical Macroeconomic Update | 3.14.23The Euro continued its upward momentum, trading above $1.07 and approaching its highest level since February 14th. This is in contrast to the two-month low of $1.05 it reached on March 8th, which was due to concerns about the US financial system following the collapse of SVB. Despite US authorities' efforts to limit the damage, investors are concerned that the Federal Reserve may adopt a more cautious approach and only deliver a 25 basis point hike at the March meeting, instead of the previously expected 50 basis point hike. This is because of the potential risk to global growth caused by the turmoil in the US banking sector. Investors are also awaiting the European Central Bank's policy statement on Thursday. Although the bank is expected to raise interest rates by another 50 basis points, there are concerns that it may adopt a more dovish tone due to ongoing risks to financial stability. The S&P/ASX 200 Index rebounded from over two-month lows, rising 0.8% to above 7,060 on Wednesday. The gains were led by technology and banking stocks, following a similar trend on Wall Street, as investors felt that the worst of the fallout from the collapse of Silicon Valley Bank and Signature Bank had passed. The US inflation report, which came in line with expectations, also calmed the market’s nerves, and investors are now betting on a smaller interest rate hike by the Federal Reserve next week. Although Australian consumer sentiment remained at historic lows in March due to concerns about inflation, interest rates, and the broader economy, business sentiment dropped to a three-month low in February. The Hang Seng Index soared by 346 points or 1.8% to 19,594 on Wednesday, recovering from a 2.3% plunge the day before. This plunge had seen the index hit its lowest in more than three months. Investors are optimistic that China's economic activity will strengthen after official data showed that industrial output, retail sales, and fixed-asset investment all grew during the first two months of the year. The People's Bank of China added more liquidity than expected while holding a key lending rate, adding to the positive sentiment. WTI crude futures rose above $72 per barrel, rebounding from three-month lows, as OPEC raised its forecast for Chinese oil demand growth in 2023. This is in light of the country’s exit from the zero-Covid policy. However, OPEC left its outlook for global demand unchanged, citing potential downside risks for global growth. The group said that it would stick to production cuts agreed in October until the end of the year, according to Saudi Arabia energy minister Prince Abdulaziz bin Salman. The US oil benchmark, however, remains down more than 5% this week due to the turmoil in the US banking sector, and the prospect of another interest rate hike from the Federal Reserve next week continues to weigh on sentiment. Investors are now looking ahead to the IEA’s monthly report and official data on US crude inventories on Wednesday. Soybean prices eased below $15 per bushel, moving further away from a seven-month high of $15.55 hit on February 13th. This is because of the expectation that supply will remain strong, boosted by large crops in Brazil. The country's soybean production is estimated to reach a historical 153 million metric tons (MMT) in 2022/23, unchanged from last month, and higher by 24 mmt (18 percent) from last season’s drought-affected crop. Meanwhile, concerns over Argentina's supplies will continue, as the country's soybean harvest forecasts have been cut several times over the past months after the South American nation fell into the grip of its worst drought in over 60 years. The USDA has slashed its projection for Argentine production to 33 million tons, down 20% from its February estimate and marking the smallest crop since 2009. Crush is also expected to hit the lowest level in over a decade. The Hang Seng soared 346 points or 1.8% to 19,594 around midday on Wednesday, mostly recovering from a plunge of 2.3% the day before that saw the index hit its lowest in more than 3-months, amid signs that China's economic activity strengthened during the first two months of the year, with official data showing that industrial output, retail sales, and fixed-asset investment all grew. Meantime, the PBoC today added more liquidity than expected while holding a key lending rate unchanged and stepping up financing support for private small firms. An upbeat session on Wall Street overnight also boosted sentiment, with traders trying to shake off bank woes in the US, while speculation grew that the Federal Reserve may go for a smaller rate hike when it meets next week. All sectors supported the upturn, with financials, tech, and consumers all gaining over 1%. Innovent Biologics climbed 9.8%, followed by Giant Biogene Hlds. (9.3%), Orient Express Intl. (8.4%), and Longfor Group (4.2%).
Long
by TayFx
USD/JPY Fundamental + Technical Macroeconomic Update | 3.14.23The Japanese yen strengthened to 133 per dollar, reaching its highest levels in almost a month. This was due to the US regulators stepping in to protect depositors and financial institutions following the collapse of Silicon Valley Bank, causing speculation that the US Federal Reserve may take a less aggressive approach to policy tightening to avoid further risks to the financial system. Meanwhile, the Bank of Japan, under Governor Haruhiko Kuroda’s final policy meeting before retirement, maintained its ultra-low interest rates at its March meeting. Japanese policymakers made no indication of ending the bank’s yield curve control, preferring to hold off on big policy changes until Kuroda’s successor, Kazuo Ueda, steps in as head in April. The dollar index traded around 103.5 on Wednesday, nearing its weakest levels in a month. The recent turmoil in the US banking sector and the latest US inflation report caused investors to reassess the outlook for Federal Reserve monetary policy. Fresh data showed that the annual inflation rate in the US slowed further to 6% in February, in line with expectations. This led to money markets pricing an 80% chance of a 25 basis point rate hike from the Fed next week, lower than the half-percentage point increase expected a week ago. In the stock market, the Nikkei 225 Index rose 0.2% to above 27,250 while the broader Topix Index gained 0.7% to 1,960 on Wednesday, with banking stocks leading the rebound. The collapse of Silicon Valley Bank and Signature Bank had caused concern, but investors were hopeful that the worst of the fallout had passed. Financial stocks led the advance, with gains from Mitsubishi UFJ (4.3%), Sumitomo Mitsui (2.6%) and Mizuho Financial (2.4%). Minutes from the Bank of Japan’s January meeting showed that members reiterated the need to maintain ultra-easy policies, stating that it will take time to achieve the 2% inflation target in a sustainable and stable manner. Overall, there was optimism in the market, with investors betting on a smaller interest rate hike by the Federal Reserve next week.
by TayFx
USD/JPY pulls back into resistance for potential swing trade The US dollar has continued to face selling pressure following the collapse of Silicon Valley Bank, as traders bet that the Fed may pause their tightening cycle at next month's meeting. Whilst Fed fund futures imply a 60.5% chance of a 25bp hike (or 39.5% odds of a pause), this is quite a sudden chance considering the curve suggested ~80% chance of a 50bp hike last week. US inflation data is released in ~14 hours and is likely to be a closely watched report, as a soft print could increase odds of a pause, weigh on the dollar and send USD/JPY lower. Yet a hot inflation print likely cements a 25bp hike and sees the dollar coup some of its losses. Purely on a technical front, USD/JPY looks appealing for a bearish sewing trade. It has an established downtrend on the 1-hour chart, and prices have retraced higher into a resistance zone including the monthly pivot point and weekly S1 pivot. A rising wedge / bear flag is also forming, which generally breaks out in the direction of the underlying trend. A weak inflation report could likely help. The bias is bearish beneath the recent cycle highs and for a move down to 132.
Short
by CityIndex