The fate of the market


The Japanese yen is the currency which the risk-averse tend to prefer. Also, the Japanese yen is the funding currency. Globally, the yen is tied with huge global financial flows. These key moments have a decisive impact on the movement of the USD / JPY currency pair. The currency moves in a technical manner, displaying on the chart a fairly long movement, thereby giving market participants the opportunity to find stable trends and move in synchronism with the pair's movements.

At night, the Japanese consumer price index is released, and inflation is one of the key indicators that influences the decision-making by central banks in monetary policy, and if you are a short-term speculator, it is advisable to close positions, which in turn will help avoid any overnight Gaps, thereby mitigating currency risk.

On the chart, the price level of 108.5-108.8 yen per dollar is the same value from which one can consider buying the dollar against the Japanese yen for the purpose of movement towards the 110.0 -110.5 mark.



The most important event awaiting the markets is in the evening. At 12:30 GMT time there will be a data release on the percentage change in the volume of orders for long-term use goods. This data is in many ways a leading indicator of production trends. But the most exciting is still ahead! Janet Yellen will deliver a speech, and in the late evening, ECB President Mario Draghi will too deliver a speech. Market participants will wait for these speeches with anticipation, trying to extract the information necessary for themselves by literally reading between the lines, and of course at the same time it is necessary to correctly analyze what was heard, and, most importantly, to draw the correct conclusions. The beneficiary of these events, as always, will be the EUR / USD currency pair. Now, the current global trend for the Euro is directed upwards. Many market participants are waiting for the breakthrough of the 1.20 mark on the pair, and to allow movement to the level of 1.25 this year. Comparing the macroeconomic data of the two European and American economies, we can likely conclude that the price level at 1.15-1.18 is the most optimal and profitable for both sides. Good macroeconomic data on the euro zone push the ECB to raise the deposit rate, and in turn, the expectation of this event causes market participants to cover their global short positions of the past few years, moving the Euro rate to new heights.

However, one must not forget about the policy of the Fed. Either way, it is they who sets the courses and causes other central banks to also move in the context of the Fed's policy. The spread on yields in US and Eurozone bonds is still positive. It is in favor of asset returns from overseas, and therefore, American assets still look more attractive. Perhaps, as the Trump team will have less "problems" with their internal opponents, the Fed will in turn become more aggressive in reducing the balance, adding to the action of reducing the balance the rhetoric about the imminent increase in the refinancing rate. In this case, the rate in the EUR / USD pair will go towards the south, to multi-year lows. It is advisable to wait for potential fateful news regarding this currency pair, and to read the text between the lines.



Care: These reviews are a private opinion of ARUM CAPITAL and are provided for information only. In no way can the provided analysis be considered as an action signal, neither is it any sort of investment advice (for the purposes of EU Directive 2004/39/EC). ARUM CAPITAL waives any liability for the trading results which may arise after using these reviews. These materials contain NO warranties or guarantees, either direct or implicit, on the precise, complete or confirmed character of the details they contain.


Thank you! Your request has been sent. Our team will contact you shortly.