Following big falls in some risk-sensitive assets on the back of North Korea tensions, a number of global stock indices and dollar currency pairs ended the session with impressive reversal-looking technical patterns as the dip buyers evidently stepped in to take advantage of the lower prices (see the technical outlook section below).
Financial markets opened in a bit of a panic mode overnight in the wake of Trump’s failure to repeal Obamacare. Stock index futures slumped while the dollar index fell to its lowest since mid-November as the yen and euro both gapped higher. The dollar’s losses steepened after the London open as the GBP/USD climbed to near 1.26 handle and EUR/USD neared 1.0900. European stock indices bounced off their lows slightly.
USDJPY is trending higher on its 1-hour chart, moving above an ascending trend line connecting the latest lows of price action. Price is currently testing this support area, which lines up with the 61.8% Fibonacci retracement level and the 100 SMA dynamic inflection point.
Black Friday means financial markets will close earlier than usual today, but don’t despair as there is a lot to look forward to next week.
The USDJPY pair initially rallied during the course of the session on Friday, but turned around to form a bit of a shooting star.
The dollar has staged a broad-based rally today, which caused the GBP/USD to tumble to a new 31-year low and the EUR/USD momentarily dipped below its 200-day moving average once again.
The USDJPY pair went back and forth during the course of the session on Friday, ultimately settling on a neutral candle.
The USDJPY pair broke higher during the course of the session on Tuesday, breaking above the top of the shooting star from the Monday session. Because of this, I believe that the market is going to continue going higher, as the Bank of Japan has worked against the value of the Yen and of course the Federal Reserve looks much more likely to potentially raise interest rates in the fairly
The Yen index continued to rise overnight as the markets absorbed news from the two day meeting of the Bank of Japan, with the general tone being one of disappointment, and the yen (FXY, quote) strengthening as a result.
It was yet another interesting week for the USD, which continued to remain firmly in the control of the bears, with the pair closing the week on a wide spread down candle as pressure continues to build on the pair.
