Yen Selloff Slows, But Remains Vulnerable
Action Insight Daily Report 8-22-23 |
Yen Selloff Slows, But Remains Vulnerable |
Yen's selloff experienced a mild respite during the Asian session, bolstered by a spike in 10-year JGB yield that touched its apex since 2014. However, given the widening yield disparities with both US and European counterparts, the outlook for Yen remains bearish, at least in the foreseeable future. Interestingly, despite US benchmark yields soaring to their highest point in over fifteen years, Dollar hasn't capitalized on this momentum. A semblance of stabilization in the risk sentiment landscape further keeps both Dollar and Yen on the softer side. In contrast, Euro and Swiss Franc currently enjoy an edge, showcasing modest gains against the Sterling. Meanwhile, the picture surrounding commodity currencies are ambiguous at best, teetering on the brink of vulnerability. Speculators are keeping a watchful eye on potential bearish news emanating from China, anticipating that any negative headlines could exacerbate the selloff in Aussie and Kiwi. Technically, CHF/JPY's up trend resumed overnight and edged higher to 166.55. Immediate focus is now on 61.8% projection of 149.77 to 163.95 from 158.80 at 167.56. Rejection by this level, followed by break of 163.95 resistance turned support will likely turn the cross into medium term correction. However, decisive break there could prompt upside acceleration, as accompanied by an upturn in D MACD, and target 100% projection at 172.98. The developments would be a barometers in gauging the Yen's performance across other market spectrums. In Asia, at the time of writing, Nikkei is up 0.80%. Hong Kong HSI is down -0.08%. China Shanghai SSE is down -0.39%. Singapore Strait Times is down -0.22%. Japan 10-year JGB yield is up 0.0161 at 0.671. Overnight, DOW dropped -0.11%. S&P 500 rose 0.69%. NASDAQ rose 1.56%. 10-year yield rose 0.091 to 4.342. |
USD/JPY Daily Outlook Daily Pivots: (S1) 144.92; (P) 145.40; (R1) 145.87; More... USD/JPY is still bounded in range below 146.55 and intraday bias remains neutral at this point. On the upside, sustained break of 61.8% projection of 129.62 to 145.06 from 137.22 at 146.76 will pave the way to retest 151.93 high. However, considering bearish divergence condition in 4H MACD, firm break of 44.92 support will be a sign of reversal, and turn bias back to the downside for 55 D EMA (now at 141.95). | |
GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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06:00 | CHF | Trade Balance (CHF) Jul | 4.50B | 4.82B | 06:00 | GBP | Public Sector Net Borrowing (GBP) Jul | 3.4B | 17.7B | 08:00 | EUR | Eurozone Current Account (EUR) Jun | 10.2B | 9.1B | 14:00 | USD | Existing Home Sales Jul | 4.15M | 4.16M |
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