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Forex Trade Setups (NY Close) Mar. 22nd
JPY Pairs Under Pressure
Across the board, the entire G8 block sold off against the JPY with almost everyone of them having the exact same trigger (engulfing bar which we mentioned on the last NY Close commentary). It was a drubbing as the land of the rising sun’s currency gained against everything sparing no prisoners. This was a combination of technical selling from overbought trends vs. the JPY, along with a bullish report out of Japan as the Feb. Trade Surplus surprised with overseas shipments dropping 2.7% with a 6.5% decline forecasted. This added to the touted rebound in the economy with imports rising more than 9.2% leaving a surplus of 32.9Billion Yen. Seems the monetary stimulus from the BOJ on Feb. 14th helping a recovery in exports by weakening the JPY.
USDJPY – About To Test the Bulls Resolve
We could almost pick any JPY chart as they all look identical on the daily time frames, but will go with the USDJPY as we have already picked on the EURJPY enough lately. The pair conceded the key range support at 82.85 that we discussed prior, and is levitating precariously above the 20ema. We think this will be a real test for the bulls to see if they take new longs at the current 20ema (at 82.09). Should the pair break and close below this, we will expect current longs to take further profits and possibly close their longs entirely, waiting for another price action trigger lower before getting long again. Key levels to watch for are 81.87 and 80.59. Short term traders can watch the price action off the 20ema for a possible intraday trigger to get long should the bulls make a stand here.
Forex Markets Today:
The European dollar lost ground against the USD and JPY as a fall in German and French manufacturing disappointed, along with China rekindling worries about their economy as their PMI reading came in at 48.1 when it was expected to be 49.6.
This low PMI reading in China also hurt the Aussie and Kiwi vs. the dollar as exports to China look more grim for the already struggling two regional economies.
Global Markets Today:
The Dow lost ground for three days in a row, shedding over 78pts on the day or .6%, while the S&P was down .72%.
Oil was the big commodity loser on the day, slicing $2 a barrel of its high prices before finding support just sub $105. Price is currently sitting around $105.56.
Upcoming Economic Announcements:
CNY MNI March Flash Business Sentiment Survey 01.35GMT / 21.35EST
CHF KOF Institute March Economic Forecast 03.00GMT / 05.00EST
CAD Bank Canada Consumer Price Index Core 11.00GMT / 07.00EST
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