Just like the good old days Yields stocks commodities and USDJPY all higher
Just like the good old days: Yields, stocks, commodities, and USD/JPY all higher!
Things seem like they are back to normal, regardless of Jay Powell says: Higher stocks, higher yields, higher USD/JPY higher, higher Crude. They all seem to be acting in harmony with one another, just like the old days! With a dovish Powell, one would think the yields and commodities may be lower. Powell doesn’t think much of the inflation (or employment) right now, however, bond traders disagree. The 10-year yield reached its post pandemic higher today near 1.43%, its highest level since February 21st, 2020. Strong horizontal resistance confluences just above at the horizontal and phycological round number resistance of 1.50%! The RSI is also diverging, which indicates a pullback may be coming soon.
Source: Tradingview, City Index
USD/JPY appears to be moving with yields since the beginning of the year. USD/JPY put in a low on January 5th, near 102.60 and has been trading higher since. The pair is currently nearing resistance at the 38.2% Fibonacci retracement from the February 20th, 2020 highs to the January 5th lows near 106.26. If price breaks above there, the 50% retracement level is at 107.39. Price sliced through the 200 Day Moving Average today, which now acts as first support at 105.49, then horizontal support at 104.92 and 104.41.
Source: Tradingview, City Index
Everything you should know about the Japanese Yen | JPY price history
Even with a dovish RBNZ, NZD/USD screamed higher today, up 1.6%, trading right into horizontal resistance near 0.7440. NZD/USD had traded higher out of a pennant formation and the target is near 0.7880. However, the pair must first get through resistance at 2017 highs near 0.7555. The RSI for NZD/USD is also in overbought territory, indicating the pair may be ready to pull back as well. The New Zealand Dollar is highly correlated to copper, which also put in 10-year highs today!
Source: Tradingview, City Index
Just for fun, with commodities, USD/JPY, and NZD/USD all higher, lets look at NZD/JPY. As you may guess, it was also higher, up over 2% on the day. The pair broke above the 50% retracement level from the late December 2014 highs to the March 2020 lows hear 76.97, as well as, horizontal resistance from December 2018 at 78.86. The next level of resistance is at the 61.8% Fibonacci retracement level of the same time period near 81.05! Support is back at an upward sloping trendline and todays lows near 77.07. Again, take note of the RSI reading above 80. Price may be ready for a pullback after such a large daily move.
Source: Tradingview, City Index
Although everything seemed like the good old days today, be careful. As mentioned, a number of these instruments are nearing resistance and have RSI’s that are in overbought territory. A pullback may be ahead!
Learn more about forex trading opportunities.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024