Connect with us

Analys från DailyFX

USD/JPY Technical Analysis: Yen Drops Most In Year on BoJ Negative Rates (Levels)

Published

on

Sign Up for a Free Yen Trading Guides Here

Talking Points:

  • USD/JPY Technical Strategy: BoJ Delivers Negative Rates, Upside Favored
  • USD/JPY Broke Through 2016 Opening Range High of 120.50
  • JPY Clearly Weakest Currency Now That BoJ Forces It Lower

Aren’t borrowers supposed to compensate lenders by using cash today? Not in today’s world as made evidence by another central bank pushing interest rates below zero. This morning, the Bank of Japan announced that they would adopt adopts a negative interest rate strategy, causing the JPY to drop across the board by the most in a year.

We recently noted that the JPY had been strengthening against G10 currencies and that unless the BoJ forced the market, the strength would continue. They seemed to agree that the JPY needed to be adjusted lower by their monetary policy, and a weaker JPY appears now to be the path of least resistance. This surprising move comes nearly a month after BOJ’s Kuroda said the BoJ had no plan to adopt negative rates now, given the success the Federal Reserve had seen in stimulating the economy without resorting to negative rates.

What now appears clear is that the US Dollar is set to take over as a leading G10 currency, which will likely put further strain on the global economy. While this effect is not as clear in how it will play out, further deflation is what central banks have continued to fight unsuccessfully, and the Bank of Japan seems to show by actions that they have more to fight.

Another Behavior Change in USDJPY As Upside Is Forced

USD/JPY Technical Analysis: Yen Drops Most In Year on BoJ Negative Rates (Levels)

The chart above shows an effective price channel that is drawn off key pivots in mid-2015 that have done a fair job of framing price action. We recently pushed off the lower bound of the channel, and it is fair to say that we are now making a move to the channel top near 122.50, and we appear to be doing so in a hurry.

The Bank of Japan announcing negative interest rates for the first time in their history appears to erase the downside probability for now. Given the strength of the US Dollar and the preference of US Dollars in a negative rate world, attention is now toward new highs beyond the 2015 high of 125.85. This view will remain in focus as long as the Fed keeps a focus on higher interest rates, and a weaker Yen continues to be forced by the Bank of Japan. Trends should not be fought, and the 4-year trend higher in USD/JPY looks ready to resume higher.

T.Y.

To see how FXCM traders are positioned, click here.

Interested In Learning the Traits of FXCM’s Successful Traders? If So, Click Here

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

on

By

What’s inside:

  • EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
  • Resistance in vicinity of 11825/80 likely to keep a lid on further strength
  • Targeting the low to mid-11600s with more selling

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.

Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.

Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).

Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.

For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.

EURUSD: Daily

EURUSD Weekly Technical Analysis: New Month, More Weakness

—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email bysigning up here.

You can follow Paul on Twitter at@PaulRobinonFX.

Continue Reading

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

on

By

Euro Bias Mixed Heading into October, Q4'17

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

Continue Reading

Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

on

By

British Pound Reversal Potential Persists Heading into New Quarter

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.

GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.

— Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

Continue Reading

Trending

Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.