The Japanese Yen is weakening again to reach its lowest level against the US Dollar in almost 40 years, leading to the Japanese Government threatening to intervene to prop up the Yen.
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The USD/JPY currency pair rose firmly during the Asian session to make another strong and significant bullish breakout to a new 39-year high price. Trend traders will already be long here for some time. The Japanese Yen has long-term weakness and has been a great gift in the Forex market to anyone going short of it. The problem is that the Japanese government / financial establishment does not want to see the Yen weaken quickly and they have already intervened a few times to try to prop up the Yen, which is not such an easy thing for a central bank to do. Just a few hours ago the Japanese Chief Cabinet Secretary Kihara stated that "We are always ready to take necessary action on Forex", in an attempt to cool the rise. However, the price is still right on its high at the time of writing, so more substantial intervention to try to send the USD/JPY currency pair lower could be coming soon. Beware as this can puh the price lower by 200 or even 300 pips in a matter of minutes.
Bitcoin is in focus as the world's largest cryptocurrency continues its long-term downwards trend which has been providing traders on the short side with profits for many months. When you see a trend like this, it is important to either follow it, or to trade against it if you must with extreme caution and minimal risk. It is easy to look at historic Bitcoin price charts and see that in the past few years, as a highly speculative asset, and so it is prone to respect long-term trends and technical levels. For these reasons, a short trade here from a rejection of $61,850 would be attractive to me. The price is trading below $60k with bearish price action suggesting it is heading for new long-term low prices.
Crude Oil remains in focus as the talks between the USA and Iran have been announced to be be back on, so the price continues to fall weakly and is now back in its area of comfort where it consolidated before the war. It could be that if a final US/Iran peace deal is reached, that would be a catalyst for even lower prices, but I am not sure it has much further to fall in the near term. Still, WTI looks like it is going to fall below $70 today.
Equities are mixed, with confusion mainly driven by different market sentiment within the AI ecosystem. AI infrastructure stocks are doing well, non-infrastructure is not.
Precious metals such as Silver and Gold are looking bearish again after both reached new 18-month low prices in recent days, with Gold doing so again just a few hours ago. Silver is down by more than 50% from its peak made earlier this year, with both metals getting hammered by the tighter US monetary conditions. Trend traders prepared to short commodities will also be interested to be short here. I do not like to go short of commodities or equity indices.
In the Forex market, the US Dollar is gaining again after falling weakly over the past few days, after making a new 13-month high last week. The Dollar is likely to retain some strength from a more hawkish Fed outlook since its policy meeting two weeks ago. The EUR/USD pair is in focus as trend traders will be looking to be short here as it falls again after making a new 14-month low last week, with today's pivotal point looking likely to be the support level at $1.1379. Trend traders will already be long of the USD/JPY currency pair as I explained in my first point. These two pairs have historically been the best to trade the US Dollar against, with GBP/USD and AUD/USD showing less long-term weakness.
There will be a release today of Canadian GDP data, which is expected to show a month-on-month increase of 0.4%. The result could affect the Canadian Dollar when it is announced.