Trading opportunities for currency pair: The Bank of Japan has brought in negative interest rates – minus 0.1%. The yen has weakened against the dollar by 290 points. If the stock markets aren’t swinging, we could see a growth in the pair to 123.45 after a rebound to 120.20. Further growth to cease with a close of the daily candle below 119.55.
Current situation
The Bank of Japan brought in negative interest rates on Friday – minus 0.1%. The regulator undertook such a decision in order to overcome deflation which has been going on for the past decade. The central bank will continue to purchase state bonds in order to increase the amount of money circulating in the economy. The dollar/yen jumped 290 points on news of this to 121.68.
Now to what we can expect from the Japanese yen with the introduction of negative interest rates. The dollar’s strengthening stopped at the 121.68 resistance. The price recoiled from here and on Monday I reckon we’ll see the usual movement against Friday: a fall in this case.
If the stock markets don’t start swinging, after a rebound to 120.20 I reckon we will see a growth in the pair to 123.45. Only a fall in the stock markets and the price of oil could cancel a growth scenario out after the BoJ’s monetary policy decision. Further growth to cease with a close of the daily candle below 119.55.
COT report
The new weekly CFTC (Commodity Futures Trading Commission) report was out on Friday 29/01/2016. The COT (Commitments of Traders) report shows a drop in trader’s open positions from 20/01/2016 to 26/01/2015 inclusive. Friday’s weakening of the yen didn’t make it into the COT report.
Non-Commercial: reduction of short positions by 4,314 contracts to 41,164.Increase of long positions by 8,959 contracts to 92,268.
Non-reportable Positions: short positions down 2,581 contracts to 29,091 and long positions down by 635 to 33,661.
Commercial: long positions on the yen down by 4,136 to 135,020 and short ones up 11,082 to 190,694.
Open interest is up by 4,991 to 281,013.
Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review
Recommended Content
Editors’ Picks
AUD/USD weakens further as US Treasury yields boost US Dollar
The Australian Dollar extended its losses against the US Dollar for the second straight day, as higher US Treasury bond yields underpinned the Greenback. On Wednesday, the AUD/USD lost 0.26% as market participants turned risk-averse. As the Asian session begins, the pair trades around 0.6577.
EUR/USD stuck near midrange ahead of thin Thursday session
EUR/USD is reverting to the near-term mean, stuck near 1.0750 and stuck firmly in the week’s opening trading range. Markets will be on the lookout for speeches from ECB policymakers, but officials are broadly expected to avoid rocking the boat amidst holiday-constrained market flows.
Gold price drops amid higher US yields awaiting next week's US inflation
Gold remained at familiar levels on Wednesday, trading near $2,312 amid rising US Treasury yields and a strong US dollar. Traders await unemployment claims on Thursday, followed by Friday's University of Michigan Consumer Sentiment survey.
Bitcoin price drops, but holders with 100 to 1000 BTC continue to buy up
Bitcoin price action continues to show a lack of participation from new traders, steadily grinding south in the one-day timeframe, while the one-week period shows a horizontal chop. Meanwhile, data shows that some holder segments continue to buy up.
Navigating the future of precious metals
In a recent episode of the Vancouver Resource Investment Conference podcast, hosted by Jesse Day, guests Stefan Gleason and JP Cortez shared their expert analysis on the dynamics of the gold and silver markets and discussed legislative efforts to promote these metals as sound money in the United States.