USD/JPY Falls Back To 200-Day MA

UsD/JPY Falls Back To 200-Day MA, Further Losses Likely

USD/JPY is struggling to capitalize on Monday’s bullish candlestick pattern. A break below the 200-day MA, currently at 111.55, looks likely, as the pair has dived out of a rising trend line.

Technical Overview

USD/JPY created an inverted bullish hammer at the 200-day moving average (MA) line on Monday. So far, however, the follow-through has been anything but bullish, which takes the shine off the hammer candle.

As of writing, the spot is trading at the 200-day MA line of 111.55, having faced rejection at 111.69 earlier today.

A failure to capitalize on the inverted bullish hammer and the violation of the ascending trend line, as seen in the 8-hour chart below, indicates scope for a deeper drop below the 200-day MA of 111.55.

Fundamental Overview

The USD/JPY pair edged higher at the beginning of the week, although it faltered near the 112.00 figure, ending the day at 111.70. The advance was backed by US Treasury yields, which recovered from Friday’s lows amid resurgent spending in the US. According to March data, Personal Spending posted its largest one-month growth since 2009, up by 0.9% when compared to February, spooking fears of an economic slowdown. The benchmark yield for the 10-year Treasury note was up to 2.53%. Additionally,  US equities managed to post a modest intraday advance, trimming pre-opening losses.

Japan started the week with a holiday that will extend during the upcoming days, as the country established an unprecedented 10-day holiday amid the Emperor´s abdication in favor of his son. The macroeconomic calendar will be quite light throughout the week, with nothing scheduled in the country.

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Goldman Sachs EUR/USD Prediction

Goldman Sachs EUR/USD Prediction

EUR/USD To Drop To 1.10 In The Next Three Months – Goldman Sachs

Goldman Sachs strategists expect little downside in the American Dollar in the near-term and see the EUR/USD pair falling to the psychological support of 1.10 in the next three months.

The shared currency is currently trading at 1.1150 with the German 10-year bond yield below zero.

The investment bank favors pro risk USD neutral trades, emerging market (EM) currencies with funding from the EUR or low-yielding EM currencies.

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AUD/USD Breaks 100-Day SMA

AUD/UsD: Sellers Aim For 0.7095 Support Line After Breaking 100-Day SMA

Investors turn to the greenback in search of risk aversion ahead of major global markets come into play.

Doubts over Chinese stimulus and break of 100-day SMA also weigh on Aussie.

Having breached 100-day SMA, AUD/USD drops to the lowest levels in nearly a fortnight as traders preferred the US Dollar (USD) in search of risk safety ahead of global markets appear in full form today. 

Even if Japan and China were active throughout the recent holiday season, absence of other major market players dimmed the trading sentiment since Friday.

Above all, prospects of China cutting down on its monetary policy measures have been negatively affecting the antipodeans off-late.

Global barometer of risk sentiment, the US 10-year treasury yield trims more than one basis point as it seesaws around 2.579%.

Investors await Wednesday’s headline consumer price index (CPI) and Friday’s gross domestic product (GDP) figures from the US in order to determine near-term trade direction.

Aussie inflation numbers might portray soft price pressure whereas the US economic growth is expected to weaken.

For the purpose of immediate catalysts, the US new home sales, house price index and Richmond Fed Manufacturing Index will be given higher importance coupled with news developments surrounding the US-China trade talks.

AUD/USD Technical Analysis

Even if 50-day simple moving average (SMA) level of 0.7110 is likely immediate support for the pair, major attention could be given to the seven-week-old ascending trend-line near 0.7095 as a break of which can fetch the quote 0.7050 and 0.7030 rest-points.

Meanwhile, an upside closing beyond 100-day SMA level of 0.7135 can propel prices to 0.7170 and 200-day SMA level of 0.7190.

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USD/JPY Fades After 2019 High

USD/JPY Fades After 2019 High

USD/JPY Fades After Fresh 2019 High, Back Below 112.00

USD/JPY hit a fresh year-to-date high of 112.17 earlier today. So far, however, the follow-through has been weal.

The pair has fallen back below 112.00, despite an above-forecast China macro data. The futures on the S&P 500 and treasury yields are also struggling to cheer China data.

USD/JPY is currently trading at 111.95, having hit a 2019 high of 112.17 earlier today.

The lack of strong follow-through has weakened the bullish case put forward by Friday’s convincing move above 111.82 (April 5 high).

Also, the pair’s inability to hold above 112.00 is somewhat surprising as China’s first quarter GDP data and March industrial production and retail sales figure released earlier today was risk-supportive.

That said, the futures on the S&P 500 have also failed to pick up a strong bid in response to China data. At press time, the futures are trading at 2,913, representing just 0.08 percent gain on the day. Further, the 10-year treasury yield is also flat-lined on the day near 2.6 percent.


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How Could China CPI Affect AUD/USD

How Could China CPI Affect AUD/USD

When is China CPI/PPI and how could it affect AUD/USD?

Thursday’s Asian session will offer China’s latest Consumer Price Index (CPI) and Producer Price Index (PPI) figures for March month at 01:30 GMT.

China CPI/PPI overview

China’s annualized CPI reading is expected to increase to 2.4% from 1.5% with PPI YoY likely rising to 0.4% from 0.1%. On an MoM basis, CPI is forecast to tick down from 1.0% to -0.2% for March. Recent improvements in China data and a likely trade deal between the US and China could get additional support to boost the Australian Dollar if headline inflation data follow the suit.
Barclays and Westpac had their own forecasts spread out ahead of the release. While Barclays expect an uptick in the headline inflation numbers, Westpac expects price pressures remaining contained.

How could it affect the AUD/USD?

The latest positive pattern from Australian and Chinese data, coupled with developments at the US-China trade negotiations, has been praising the Australian Dollar (AUD), strong headline economics from its largest consumer can strengthen the AUD, also known as Aussie.

It should also be noted that Australia’s consumer inflation expectations for April, up for release at 01:00 GMT on Thursday, could also affect the AUD/USD moves. The reading last came in at 4.1%. However, the main focus of the market will be on China’s inflation numbers as the dragon nation is Australia’s largest consumer.

Should there be an uptick in headline inflation numbers, the AUD/USD pair may rise further towards 0.7200 resistance-confluence, comprising 200-day simple moving average (SMA) and a downward sloping trend-line stretched since June 2018. It should also be noted that the pair’s successful break of 0.7200 enables it to challenge 0.7235 while targeting 0.7310 resistance.

On the contrary, weak data can fetch the quote back to 100-day SMA level of 0.7145 ahead of highlighting 0.7130 and 0.7110 comprising 50-day SMA.

Article by FXStreet

GBP Bears & USD Bulls

GBP shorts surge, USD longs increased – Rabobank


According to the IMM net speculators’ positioning as at April 02, 2019, GBP net short positions increased a touch from the previous week when they were at their lowest level since June 2018.

Key Quotes

“From a legal perspective the UK is on course for a no deal Brexit on April 12. That said, clearly speculators are betting that this will be avoided at the 11th hour – in line with the market consensus.”

“USD long increased moderately last week. Having dropped lower in the November/December period in response to a more dovish outlook for the Fed, USD longs then consolidated for a lengthy period. Another leg lower occurred in mid-March.”

“Short EUR positions surged last week. They have been climbing since the start of the year, reflecting the loss of confidence in the outlook for the Eurozone economy and expectation for a more dovish ECB. Last week EUR shorts recorded their highest level since December 2016.”

“Net JPY short positions have been pushed higher recently suggesting an improvement in risk appetite.”

“CHF net shorts dropped slightly last week though they have been trending higher since mid-January – not too different from the movement in the JPY.”

“CAD net shorts moved higher last week, but remain in a choppy range. BoCpolicy and oil price movements are in view. AUD net shorts have been trending higher since the start of the year reflecting the market’s more dovish expectations for RBA policy.”

Article by FXStreet