MARKET LOOKING FOR DIRECTION: THE USD/JPY HAVE AN EYE FOR 109 REGIONS?
Political news from Washington keeps
dominating the headlines in the financial market since the inaugural speech by
President Donald Trump. This week, market and traders await the court verdict
on the “Muslim ban” ordered by the President to satisfy the promise made during
the campaign.
For the past three days the bulls
and bears have been struggling to find a direction for the USD/JPY as traders
feel the breeze of unchartered waters. The Appeal Court verdict, whatever it
may be, have 90% chance of reaching the supreme court for a final conclusion to
what has been a turmoil in foreign relation diplomacy.
The Appeals Court failure to make
a ruling on the matter makes it more worrying for investors as sentiment on the
USD will be rising and panic may set in for some day traders and retail traders.
Yesterday, the dollar found
support from a comment from Fed reserve member who promised to vote for a rate hike
in march, the USD/JPY traded above 112.300 but today the door of 111.900 was
breached sending the pair in to a daily low with a bear eye for 109 regions. As
at the time of filing this piece the dollar index which measures the strength of
the dollar against its six major pairs was in the 100.39 region recovering from
its daily low of 100.29
We wait to see, what happened by Friday
as there is no significant market moving economic data to be released. This
means bears have a great chance of dumping the USD/JPY further down the bear
channel.
Many investors are coming to
terms with trump era of ‘tweeter war’ and the clear but yet not explicit tone
of wanting a weaker dollar. Trump has in weeks bashed Europe, Japan and China
for manipulating their currencies while ironically Trump somehow seem to be
talking down the dollar to push his view of wanting a weaker dollar.
It is barely a month to the Trump
era and its looks like the Chaos coming from Washington is far from over.
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