Yen's Decline, Robust US Investor Confidence, and Aussie's Rise
Action Insight Weekly Report 4-27-24 |
Yen's Decline, Robust US Investor Confidence, and Aussie's Rise |
Last week's market activity was shaped by several significant themes. Firstly, the Japanese Yen's rapid decline caught market participants off guard. The sell-off was exacerbated by what many considered tepid verbal interventions from Japanese officials. Current momentum suggests that the Yen's free fall is far from over. The key is whether Japan will step up with stronger actions, or at least words, as Yen approaches 160 mark against the greenback. Secondly, investor confidence in the US showed remarkable resilience. Despite economic data suggesting that Fed would further delay interest rate cuts, US markets have adapted to this new outlook well. There is a growing sentiment that robust economic data will continue to be received positively, reinforcing the adage that "good news is good news." Thirdly, Australian Dollar benefited not only from strong domestic economic and inflation data but also from renewed optimism towards China's economic recovery. The substantial rally in Hong Kong stocks has mirrored this positive sentiment. Should this positive sentiment towards China's economy solidify into a stable trend, this could spell further upside for Aussie. In a broader view of the currency markets, Yen concluded the week as the weakest performer, followed by Swiss Franc and Dollar. On the other end of the spectrum, Australian Dollar emerged as the top performer, followed by British Pound and New Zealand Dollar. Euro and Canadian Dollar occupied the middle ground. |
EUR/JPY Weekly Outlook EUR/JPY's up trend resumed last week and accelerated to as high as 169.38. Initial bias remains on the upside this week. Next target is 169.96 high the downside, below 167.76 minor support will turn intraday bias neutral and bring consolidations. But pull back should be contained well above 165.33 resistance turned support to bring another rally. | |
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