Daily FX Wrap: JPY weakens as yields increase

JPY The safe haven weakened throughout the session, grinding lower amid increasing US yields. USD/JPY bulls now have a clear sight on the 113.00 handle. JPY lost ground against all its major pairs through the session, with EUR/JPY testing 133.00

GBP Cable had its day of option expires today, as 1.1bln at 1.3055 and 1.7bln between 1.3530 and 1.3500. The pair saw subdued trade, despite marginal optimistic Brexit reports with a German govt official expecting EU leaders to give the signal that EU should internally prepare for next phase of Brexit talks and transition.

CAD Opec news circulated as we approached the Wall Street open, with source reports stating OPEC are leaning towards a 9-month extension and a decision may be made in early 2018. Further, three OPEC sources told Reuters that keeping the curbs in place until the end of 2018 was a likely outcome and a fourth saying that an extension of six to nine months would be needed to remove excess oil in storage. CAD saw a marginal bid, with USD/CAD printing fresh session lows on the news, firmly through 1.20, hitting lows of 1.2489, prior to the weekly DoE inventories, unfazed by the DoE report.

Source: www.talking-forex.com

Dollar Index H4

As per our last post we had price coming off WR1 and down to WPP. Price is currently at WM3 though our stoch is bearish so we could come down to WPP and then move higher to the weekly target of WM4. Bears would be looking at today's high as the right shoulder of a head and shoulder pattern. This would only be the case if price printed a lower low.

US10Y H4

Price is currently at the bottom of the range and close to the WM1 weekly target after coming off of WM3 at the start of the week. The stoch is currently oversold. We would expect to see price head up from the weekly target and make its way back to WPP, which marks the top of the range. Due to US fundamentals we anticipate a break of the bottom of the range at some point in the near future. Keep in mind that as long as US10Y prices are bearish yields are rising which could result in weak Yen and weak Gold.

S&P 500 H4

Price made a higher high today after coming off the 21 yesterday. Price is currently at the weekly target with MR2 just above WR2. We expect Bulls to take profit in the monthly and weekly profit taking zone. The Vix is currently at 9.96, down 3.39% for the day so traders are not currently hedged.

One thought on “Daily FX Wrap: JPY weakens as yields increase”

  1. Rana Haq says:

    Thank you for Daily FX Wrap. I have noted recently, USD is bullish with certain currency, but very bearish with others.

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