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
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • British Pound Price Outlook: GBP/USD, GBP/JPY Poised to Extend Climb - https://www.dailyfx.com/forex/technical/home/analysis/gbp-usd/2021/04/14/British-Pound-Price-Outlook-GBPUSD-GBPJPY-Poised-to-Extend-Climb.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $GBP $GBPUSD $GBPJPY https://t.co/rDOIqMJQfk
  • The US Dollar may extend gains against the Thai Baht. But, its price action within USD/SGD, USD/PHP and USD/IDR seem to be favoring more range-bound trading conditions. Get your market update from @ddubrovskyFX here:https://t.co/DYCLXAFcCr https://t.co/q3hRzYvE7n
  • Despite the rise in US inflation via CPI, the Dollar extended its slide. I'm dubious of the momentum there and the risk on response, but $USDJPY is well positioned for either outcome. Ahead, we have earnings, bank governors and the Senate discussing China https://www.dailyfx.com/forex/video/daily_news_report/2021/04/14/USDJPY-Reversal-Can-Follow-Risk-and-Yield-Scenarios-Earnings-Next-SPX-Spark.html https://t.co/2esFQsVuvx
  • To be fair, crypto is broadly rising (Bitcoin, Etherium, Litecoin, etc), but Dogecoin is pacing the masses. Perhaps Cuban has finally taken the market influence title from Musk https://t.co/nfjApyXNTT
  • RT @mcuban: FYI, the Mavs sales in @dogecoin have increased 550pct over the past month. We have now sold more than 122k Doge in merchandis…
  • RT @FxWestwater: New Zealand Dollar Forecast: $NZDUSD Unscathed as #RBNZ Holds Course Link: https://www.dailyfx.com/forex/market_alert/2021/04/14/New-Zealand-Dollar-Forecast-NZDUSD-Unscathed-as-RBNZ-Holds-Course.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/5Qh0nRIKDa
  • The Euro has regained lost ground against its major counterparts recently. Are further gains in the offing or is this just a short-term countertrend correction? EUR/USD, EUR/JPY, EUR/GBP, EUR/NZD key levels. Get your market update from @DanielGMoss here:https://t.co/BK1ezTva9R https://t.co/JcrxdRvyaX
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.64% Silver: 0.31% Gold: 0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/VrRa1mL8ge
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.15% 🇪🇺EUR: 0.07% 🇬🇧GBP: 0.03% 🇨🇭CHF: 0.02% 🇦🇺AUD: 0.01% 🇨🇦CAD: -0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/zQkfCDgAJQ
  • $NZDUSD just a touch lower after the #RBNZ rate announcement after policy settings were left unchanged https://t.co/i2BolXsSrE https://t.co/dxWNxNJ076
S&P 500 Hits a Record High and USDJPY Tempts a Massive Pattern

S&P 500 Hits a Record High and USDJPY Tempts a Massive Pattern

John Kicklighter, Chief Strategist

S&P 500, Crude Oil, Treasury Yields and USDJPY Talking Points:

  • Risk trends were put through the gauntlet this past week, but ultimately we enter the new trading week with a ‘risk on’ boost on a record S&P 500 Friday close
  • Top fundamental theme over the coming week includes expectation for a US infrastructure stimulus update and a holiday NFPs release
  • While the Dollar eased back on Friday, USDJPY carried its drive through Friday to break a major wedge to confront the next major milestone
The Quiz
What Kind of Trade Are You? Take Our Quiz to Find Out
Start Quiz

A Rebound in Broad Risk and Record High for the Lead US Stock Index

Risk trends seemed to maintain a broad correlation this past week, though that breadth wouldn’t necessarily translate into conviction. Intent is important to evaluate in the markets because most traders depend on follow through in their trading rather than the binary condition of a technical break. Establishing follow through over this coming week depends on the same general systemic circumstance we have lacked over the previous week: a clear and definitive fundamental lead to draw the bulk of the speculative market to a particular cause. Without that common drive, it can be very difficult to solidify conviction. And yet, that is exactly what is critical at this point when benchmarks like the S&P 500 close out this past week with a technical record high. On a daily basis, the close from the most heavily traded index – through derivatives – edged out the March 17th close by a mere 0.4 points. While impressive in print, it isn’t exactly a roaring technical endorsement that can override fundamental constraints to conviction.

How to Trade FX with Your Stock Trading Strategy
How to Trade FX with Your Stock Trading Strategy
Recommended by John Kicklighter
How to Trade FX with Your Stock Trading Strategy
Get My Guide

Chart of S&P 500 with 100-Day Moving Average and 1-Day Rate of Change (Daily)

S&P 500 Hits a Record High and USDJPY Tempts a Massive Pattern

Chart Created on Tradingview Platform

Look more critical at the shape of the risk trends we closed this past week on, there continues to be a notable slump in retail conviction. Though it has been tumultuous, 2021 has thus far proven the year of novice traders. The extreme end of the curve has shown favor for the likes of GameStop (one of the so-called ‘meme stocks’) while the cryptocurrency craze continues to draw a consistent appeal among those new to the financial markets. Perhaps raising the experience level but not pulling back from the extreme edge of risk taking, we have also seen an indulgence in high-finance. Trading app Robinhood has announced its interest in creating a platform that connects retail traders to IPOs (conveniently before its own offering) while SPACs now count WeWork, the company that failed to follow the traditional route over a year ago, among its rushed-to-market ilk. And, if we want to look only among the highest of risk measures, there is a notable preference building for ‘blue chip’ stocks in an index like the Dow relative to the tech-heavy Nasdaq 100 which has led the US equity markets for years.

Chart of Nasdaq 100 to Dow Jones Ratio with 100-Day Moving Average (Daily)

S&P 500 Hits a Record High and USDJPY Tempts a Massive Pattern

Chart Created on Tradingview Platform

The Top Fundamental Themes and USDJPY’s Barometric Pressure

Looking ahead to next week, there is a clear sense of what critical themes will take up the market’s reigns. The rise and fall of retail interest is a theme to watch, but it is not a reliable charge. In more traditional channels, we have relative growth coming off this past week’s PMIs but the aggregate view of recovery is not exactly showing through the clouds of uncertainty. Yields has been a driver that has lost notable traction as well. Inflation fears have eased back in sheer headlines, but the benchmark government bond yields that drove much of that worry haven’t really relented. The US March NFPs release due Friday could take up this cause, but holiday trading conditions are likely to drain its potential. The top of my list for critical market moving events will be the infrastructure stimulus plan due from US President Biden on Wednesday. The program is said to be on the order of $3-4 trillion. That can buy a considerable amount of sentiment.

Chart of US 10-Year Treasury Yield Overlaid with S&P 500 and 60-Day Correlation (Daily)

S&P 500 Hits a Record High and USDJPY Tempts a Massive Pattern

Chart Created on Tradingview Platform

Considering that we are evaluating the overlapping (competitive and complementary) themes of growth, inflation, interest rates and risk appetite moving forward; it can be difficult to compare measures to establish what interest is catching traction – particularly in the early part of the development. It is even more difficult to evaluate this in a singular measure. However, one such measure that taps into all of these elements that is worth watching for the global macro-tuned trader is USDJPY. This pair increasingly caters to the carry trade concept with forward rate forecasts along with the BOJ’s efforts to anchor its own JGB yield. Further, it is a somewhat balanced safe haven exchange rate given they both fall on the same end of that spectrum. Yet, as intensity picks up in fear, the Greenback stands to benefit – while moderate risk aversion may actually favor the Yen.

How to Trade USD/JPY
How to Trade USD/JPY
Recommended by John Kicklighter
How to Trade USD/JPY
Get My Guide

Chart of USDJPY (Daily | Weekly)

S&P 500 Hits a Record High and USDJPY Tempts a Massive Pattern

Chart Created on Tradingview Platform

One a technical basis, USDJPY ended this past week with a remarkable technical charge. The pair cleared the combination of a multi-year Fibonacci retracement and resistance on an essentially symmetrical triangle that stretches back to 2013. The break of 109 is a meaningful development but 110 carries just as much prominence in its own right. We can appreciate that level on the daily charge, but weekly and monthly overviews truly highlight its importance to charge observers.

Chart of USDJPY (Weekly | Monthly)

S&P 500 Hits a Record High and USDJPY Tempts a Massive Pattern

Chart Created on Tradingview Platform

‘Other’ Markets to Watch

While I’m generally more interested in tracking the systemic matters in the market – as that is where major and persistent trends arise – it is always important to observe corners of the market where opportunity for volatility, disparity or tend may arise outside the course of the system. USDCNH remains a must-watch for me as the rise of trade war pressure between the Western world and China recalls volatility of previous years. And, given the exchange rate is slowly turning off a seven month, steady bear trend; a steadfast political sign on a liquid exchange rate could prove a unique situation. Bitcoin is another asset that should always be on the watchlist so close to record highs and given the derivatives that are rising up around it. Another particularly interesting but familiar market to track on the radar is crude oil. The situation in the Suez Canal – leading to billions of dollars in lost GDP for the world a day – has connections to the commodity. However, I don’t believe the headline and market are directly linked to the point of timely rise and fall. Nevertheless, it seems to be contributing to extraordinary volatility on an asset that is frequently referred to as equal parts growth and speculative appetite.

How to Trade Oil
How to Trade Oil
Recommended by John Kicklighter
How to Trade Oil
Get My Guide

Chart of Crude Oil Overlaid with the 20-Day Mov Avg, Volume and 1-Day ROC (Daily)

S&P 500 Hits a Record High and USDJPY Tempts a Massive Pattern

Chart Created on Tradingview Platform

Building Confidence in Trading
Building Confidence in Trading
Recommended by John Kicklighter
Building Confidence in Trading
Get My Guide

.

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

DISCLOSURES