USD/JPY hits the top of our watchlist ahead of U.S. President Trump’s highly anticipated speech on trade. Will the remarks lead to a fresh break out of consolidation in the pair?
Before moving on, ICYMI, we’ve started doing a Daily London Session Watch list! And today, we looked at a potential move in EUR/NZD after disappointing New Zealand data, so be sure to check that out. For all you traders out there who trade the London session, be sure to check out the site daily for the latest news updates and pairs that could be on the move for the session!
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 13274.37 +0.58% FTSE: 7367.06 +0.53% S&P 500: 3098.87 +0.38% DJIA: 2738.71 +0.17% |
US 10-yr 1.936% +0.003 Bund 10-YR -0.246% +0.003 UK 10-YR: 0.814% +0.002 JPN 10-YR: -0.046% +0.023 |
Oil: 57.35 +0.86% Gold: 1453.00 -0.28% Bitcoin: 8644.75 -0.90% Etherium: 183.23 -0.81% |
Fresh Market Headlines & Economic Data:
- Oil rises further above $62 as trade hopes support
- Markets hope for positive signs from Trump trade speech
- UK wage growth slows as unemployment falls
- Nigel Farage snubs Tory calls to stand down in Labour marginals
- Cyber attack on UK Labour was short-lived attempt to take down websites: source
- ZEW investor sentiment poll in Germany vaults to a nearly flat reading in November
- Side effects of ECB policy becoming more tangible – De Guindos
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- U.S. President Trump speaks on trade at 5:00 pm GMT
- New Zealand Food prices at 9:45 pm GMT
- Australia Consumer sentiment at 11:30 pm GMT
- Japan Producer prices index at 11:50 pm GMT
- Australia Wage prices at 12:30 am GMT (Nov. 13)
- Reserve Bank of New Zealand Monetary policy statement at 1:00 am GMT (Nov. 13)
What to Watch: USD/JPY
The likely top FX market-moving event is the upcoming Reserve Bank of New Zealand’s monetary policy decision, but for today’s watchlist, we’re looking at the Greenback as U.S. President Trump’s speech on trade in just a couple of hours could have a big impact on all financial markets.
Of course, we won’t know what he’ll say or the market’s reach may be, which makes USD/JPY kind of the perfect pair to play any potential pop in volatility given its technical setup.
On the one hour chart above of USD/JPY, we can see the pair has been consolidating into a symmetrical triangle, a pattern that sets up both the bulls and the bears. It’s a simple idea in that if the pair breaks the rising ‘lows’ then you have a short signal, and vice versa, a break of the falling ‘highs’ you have a buy signal.
So for the bulls, if Trump gives the markets positive commentary on the U.S.-China trade war AND USD/JPY breaks the triangle to the upside, then that’s a high probability setup of further upside moves. Given the daily ATR of around 70 pips on the pair, a reasonable target would be the next major psychological area around 109.00, with an invalidation area of below the triangle making for a nice potential R:R.
For the bears, a break below the rising ‘lows’ on negative comments from Trump will likely draw in USD/JPY sellers and risk aversion traders in general, and using the same entry/exit guides, the area around 108.50 is a reasonable short-term target as the previous consolidation around the area may draw in traders for profit taking or even a bullish position depending on what we get from Trump.
