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A typically key driver of the market has finally come back to life after a more than two-month hiatus, as Treasury yields seal a technical break higher in trading yesterday.
That to me, is a key factor to be mindful about, and tees up a potentially strong conviction for yen pairs to push higher from current levels.
Of note, GBP/JPY has the makings of pushing towards 152.00 and testing its 100-day moving average at 152.66 given the more hawkish BOE yesterday.
CAD/JPY’s rise back from the dead (again) is also one to watch as buyers eye the 3 September high at 87.89, in potentially breaking the recent downside cycle.
And the more obvious one is USD/JPY as the pair hits 110.50 today and looks poised to retest key resistance around 110.60-80 next.
That said, higher yields may eventually weigh on equities sentiment so that sort of knocks out some of the tailwind for yen pairs – especially if stocks sell off heavily.
Besides this, oil is still keeping poised to retest its 30 July high @ $74.21 and I’d still argue that bullish prospects should dominate ahead of winter.
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