After waiting for months and years for some real JPY strength, are we really seeing it, or is it temporary?
The big move started yesterday when a Bank of Japan board member said that a 25 basis point rate increase is “not necessarily set in stone” and that back-to-back rate hikes are possible.
In today’s Market Outlook, let’s take a look at Forex trading on the Dow Jones Industrial Average, WTI Crude Oil, EURUSD, EURCAD, NZDJPY, and USDJPY.
So? We have seen many attempts at Yen strength, and we need to see if this one sticks.
It hasn’t in the past.
Meanwhile, on USD/JPY, we see an oversold stochastic oscillator and strong indications of strong bearish trends on the ADX.
Of course, this is no guarantee of a reversal to the upside, and we see key levels of support at 157 and 156 yen.
Take a look at all your JPY pairs as we see similar price action.
On NZDJPY, however, we are in a ranging market on the daily chart with clear levels of support.
Watch your technicals on all JPY pairs and the news, of course.
The BoJ will be meeting this month, 18 September, to decide on the interest rates, so expect volatility between now and then.
Yesterday, we saw the BoC keep interest rates on hold, but during the press conference there was talk of rate rises, so we saw CAD strength.
On the EURCAD daily chart, we see that we are in a ranging market with key support and a possible descending triangle.
On lower time frames, we will look for the reversal.
But watch tomorrow for Canadian Employment figures and the US Non-Farm Payrolls.
USD is still out of kilter from last week’s remarks by the new Fed chair, and we see EURUSD settling back into a downtrend that started a couple of weeks ago.
Again, check your USD and CAD charts and watch out for tomorrow’s Employment reports and NFPs.
We see a pullback in the price of oil as the White House is saying the latest campaign against Iran won’t last too long.
But, in the next breath, there was talk of further strikes.
The moral of the story is, be careful and watch your risk management.
If you are following the US indices, watch out for the NFPs tomorrow and keep an eye on the Dow Jones Industrial Average, where we see price at the lower trend line and technical signals of a potential reversal.
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