1. SUMMARY
Hopefully this was another good trading week for all. The Yen generally plummeted against all its major counterparts in the previous week. This is a continuation of the past three (3) weeks’ trend in most of the pairs while in some it’s more. The point is still being maintained that this is good news for Japan as an exporting economy. The details of the meeting between US President elect D.J. Trump (The Donald) and the Prime Minister of Japan Shinzo Abe have not been made public. A reason mentioned is that this was an unofficial visit since Trump has not yet taken the office officially, although Abe remain hopeful that they will still have a relationship with Trump’s administration. For more reading please click here Abe also sees the Trans-Pacific Partnership as meaningless without the US. This comes after Trump indicated that his administration is going to get out of this partnership. This will not be good for the Japanese economy and consequently will affect the Yen after being operational. For more reading please click here Japan has been hit by a string of earthquakes almost every week for the past two (2) weeks. This past week the earthquake hit Japan twice on Tuesday (22/11/2016) and Thursday (24/11/2016). Fortunately there were no serious damages reported on the two (2) nuclear power plants in Fukushima. This did not affect the Yen so much. For more reading please click here

2. ECONOMIC INDICATORS
Japan’s trade balance went up by 0.11T from 0.36T signaling good news for the economy and the Yen. All industries activity remain the same at 0.2%, while exports y/y for October went down by 3.4% from -6.9% to -10.3% and the imports also went down 0.2% from -16.3% to -16.5%. This was a possible result of the stronger Yen previously. Remember that these are lagging economic indicators and will not tally with the Yen weakness immediately. There was a bank holiday this week for both Japan and the US due to thanksgiving. Manufacturing PMI went down by 0.3 from 51.4. Japan’s national core CPI went up by 0.1% from -0.5% to -0.4%. The Service Producer Price Index (SPPI) or CSPI also went up by 0.3% from 0.2% while the BOJ’s CPI y/y also went up by 0.1% from 0.2% as well.

3. COT REPORT ON JPY
The report shows a steady increase in short positions and a steady decrease in long positions with a decline in net positions.

4. TECHNICAL SUMMARY
NIKKEI continued being bullish this past week. It opened at 18 037.68 and closed on Friday at 18 377.88 reaching its highest in ten (10) months since January this year. N.B: NIKKEI has a positive correlation with USD/JPY. We’ll have a look at the charts below and see that generally they behave almost exactly in the same way in terms of movements although not 100%. Hopefully the charts are uploaded after trying a few methods.
JPY’s performance this past week against other major currencies was weak.
USD/JPY was bullish (JPY weak). It opened at 110.978 and closed at 113.060 on Friday. It reached its highest price at almost 114.00 in eight (8) months since March this year.
GBP/JPY was bullish (JPY weak). It opened at 137.010 and closed at 140.817 on Friday. It reached its highest price at almost 141.700 in four (4) months since July and made a bowl facing upwards when zoomed out.
EUR/JPY was bullish (JPY weak). It opened at 117.510 and closed at 119.750. It reached its highest price at almost 120.100 in five (5) months since June.
CAD/JPY was bullish (JPY weak). It opened at 82.140 and closed at 83.600. It reached its highest price at almost 84.350 in five (5) months since June.
NZD/JPY was bullish (JPY weak). It opened at 77.610 and closed at 79.620. It reached its highest price at almost 79.740 in ten (10) months since January this year.
AUD/JPY was bullish (JPY weak). It opened at 81.290 and closed at 84.170. It reached its highest price at almost 84.600 in seven (7) months since April.
CHF/JPY was bullish (JPY weak). It opened at 109.680 and closed at 114.450. It reached its highest price at almost 111.900 in six (6) months since May.

Nikkei H4

The Nikkei has been rallying for the whole week with some pullbacks especially on Friday. Monthly targets have been reached by the bulls. It closed high at WM4 which is also just below MR3 at 18 377.88. Even though the stochastic is facing down, the 21 is still above the 55 EMA confirming the bullish market.

Source: Technical Analysis

USDJPY H4

As indicated earlier that there is a positive correlation between the Nikkei and this pair, their charts are almost the same. USD/JPY has been also been rallying for the whole week with some retracements especially on Friday if one looks at the H1 chart. Monthly targets have been reached by the bulls. It closed high at WM4 which happens to be way above MR3 at 113.060. Even though the stochastic is facing down, the 21 is still above the 55 EMA confirming the bullish market.

Source: Technical Analysis

GBPJPY H4

GBP/JPY has been rallying the whole week as well with some retracements especially on Friday. Monthly targets have been reached by bulls as well. It opened at 137.010 and closed very high above MR3 which is between WR2 and WR3 at 140.810. Even though the stochastic is facing down, the 21 is still above the 55 EMA confirming the bullish market.

Source: Technical Analysis

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.