Dollar and Yen Strengthens, Anxiety Over Lockdowns Impact Stocks and Gold
Login

Dollar and Yen Strengthens, Anxiety Over Lockdowns Impact Stocks and Gold

Estimated Reading Time: 3 minutes

Azeez Mustapha

Updated:

The Asian session in the markets is rather calm, Japan is on vacation. Some selling is seen in Hong Kong stocks, but others are simply ignored. Forex markets tend to get stuck within Friday’s range, with the dollar and Swiss franc treading softly. On the other hand, the Australian currency and sterling are more stable so far. But again, the range is narrow and trading today may remain subdued on a thin calendar.

Risk aversion intensifies in the European session and carries over to the US when the DOW opens down more than -400 points. The New Zealand and Australian dollars are trading generally lower, while the pound sterling is also among the weakest amid fears of a return to coronavirus quarantine. On the other hand, the safe triplet of the dollar, yen, and Swiss franc is currently the strongest, with the yen having the upper hand. Gold and oil prices are also noticeably lower.

The two central banks will meet this week. The RBNZ is expected to keep OCR at 0.25%. The intention to move to negative rates is obvious, but for now, the RBNZ will be held back. The question is whether Governor Adrian Orr will finally give a hint about the timing.
The SNB is expected to keep the interest rate unchanged at -0.75%. The question is whether Chairman Thomas Jordan will raise the tone when intervening on the franc. Fed Chairman Jerome Powell will testify, but he is unlikely to present anything new.

Market Reaction
Technically, the focus is on whether Sterling completed a corrective retracement last week. Levels to watch out for include a temporary low of 1.2762 for GBP/USD, a temporary high of 0.9291 for EUR/GBP, and a temporary low of 134.57 for GBP/JPY. Or, sterling is indeed bouncing strongly through minor resistance at 1.3035 for GBP/USD, 0.9067 support for EUR/GBP, and 136.58 resistance for GBP/JPY. We prefer the first case, but let’s see.

The yen crosses are also showing a downward acceleration at the moment. EUR/JPY is looking for Fibonacci 122.23 support and a solid break would increase the chance of reversing the entire rally from 114.42 to 127.07. AUD/JPY is now hitting key near-term support at 75.55. A sustained break would open a deeper correction to the 38.2% retracement from 59.89 to 78.46 at 71.36.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$250 Min Deposit
9.8
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$50 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9

Learn to Trade

Never Miss A Trade Again

step 1
Signal Notification

Real-time signal notifications whenever a signal is opened, closes or Updated

step 2
Get Alerts

Immediate alerts to your email and mobile phone.

step 3
Entry Price Levels

Entry price level for every signal Just choose one of our Top Brokers in the list above to get all this free.

Share with other traders!

telegram
Telegram
forex
Forex
crypto
Crypto
algo
Algo
news
News