News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • BoE's Vlieghe says the risk that negative rates end up being counterproductive to the aims of monetary policy is low, adds that the MPC must consider ways to increase policy headroom $GBP
  • BoE's Vlieghe says the MPC is not yet at a point where is can reach conclusion on negative rates, adds that QE is probably less potent now compared to March
  • Join @MartinSEssex 's #webinar at 6:30 AM ET/10:30 AM GMT to learn more about trading #sentiment Register here: https://t.co/XUUPRdY06p https://t.co/KgvlfpAhkj
  • What are some trading mistakes @nickcawley1 made during his career and what did he learn from them? Find out:https://t.co/y3cckNW22W https://t.co/oEvLjjWpGb
  • Heads Up:🇬🇧 BoE Vlieghe Speech due at 09:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-20
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT for insight on London #FX and #CFD trading. Register here: https://t.co/AoM3UvLtcF https://t.co/KCHeNfayki
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/q8nG7unK17
  • Just posted: a fascinating chat with my @DailyFX colleague @HathornSabin on #gold, $USD, $MXN and more https://t.co/vKdwKJZuEF
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.83%, while traders in EUR/USD are at opposite extremes with 67.62%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/sf61r9rewm
  • Gold Prices May Fall Further as US Fiscal Stimulus Hopes Fizzle - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/10/20/Gold-Prices-May-Fall-Further-as-US-Fiscal-Stimulus-Hopes-Fizzle.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #XAUUSD #gold #FiscalPolicy #stimulus https://t.co/fS6r9kPXPY
The Land of the Falling JPY Aligns With Big Test for US Economy: SW Report

The Land of the Falling JPY Aligns With Big Test for US Economy: SW Report

2017-10-23 18:00:00
Tyler Yell, CMT, Currency Strategist
Share:
  • JPY drops past 114 per USD after victory helps validate view of gov’t supported JPY weakness
  • NZD remains weak on new government formation that has similar ideology of Japan
  • IGCS favors keeping an eye on further EUR strength against weaker FX (e.g., JPY, NZD, CAD)

A stubborn block of JPY strength was removed from the market on Sunday.

The broadly expected victory by Japanese Prime Minister Shinzo Abe in the snap election he called to extend the Liberal Democratic Parties control will ensure a same line of thinking in Japan that has helped the JPY find persistent selling after fears subside.

Over recent weeks, I have written pointedly about the concentration of time-specific options for JPY Calls (right, but not the obligation) to buy JPY (USD/JPY lower) if an unthinkable election outcome would result. A defeat for Japan over the weekend would have been similar to the immediate Brexit aftermath as a new government would have needed to have been put together and the work done by the BoJ to have a balance sheet of purchased assets more extensive than the US Federal Reserves would need to be addressed about unwinding as well. However, the election outcome favored the incumbents, and in so doing, the options to buy JPY and push USD/JPY lower were unwound while other themes like higher equity markets like the Japanese Nikkei and SPX500 alongside higher US Yields favor a rising USD/JPY.

The offers to sell NZD keep coming and on Monday the price of NZD weakening remained a dominant theme. The formation of the new government that has made statements on how the NZ economy ‘lives or dies by exports’ and that sees the RBNZ’s mandate as maybe needing to be changed favor full employment favor a weakening NZD to help boost exports and thereby employment in an export-dependent economy.

As the market learns more about this new Labour-NZF-Greens coalition government and PM Prime Minister-elect Jacinda Ardern, the bias will likely be to sell strength in NZD. The fear may be overdone, but it appears too early to tell, and the SW index is showing that momentum favors not standing in the way of NZD weakness

Lastly, keep an eye on the US 10-Year Treasury yield that is sitting at a level it has not been above since May, 2.40%. A move in the 10Y yield above 2.40% would indicate a selling of Treasuries in the middle of the curve that tends to be indicative of stronger US growth or inflation that could lead to a tightening Federal Reserve. A break higher in the yield would argue for further USD strength, which aligns with the current SW ranking.

Access our trading guides to help you develop your trading strategy

Strong/ Weak Index October 23, 2017

The Land of the Falling JPY Aligns With Big Test for US Economy: SW Report

Chart created by Tyler Yell, CMT

Interested in DailyFX’s FREE longer-term price forecasts? Click here to access

IGCS Highlight: Euro weakness may persist as ST retail bullishness is on the rise

The Land of the Falling JPY Aligns With Big Test for US Economy: SW Report

EURUSD: Retail trader data shows 42.0% of traders are net-long with the ratio of traders short to long at 1.38 to 1. The number of traders net-long is 19.0% higher than yesterday and 4.9% higher from last week, while the number of traders net-short is 3.7% higher than yesterday and 9.6% 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. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EURUSD price trend may soon reverse lower despite the fact traders remain net-short(emphasis mine.)

For a deeper explanation on what’s been shared above, please join the FX Closing Bell Webinar with Tyler Yell

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell

Access Our Free Market/ Trading Guides Here

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES