Asian stocks were mixed in today’s trading ahead of a teleconference between G7 leaders. The Nikkei 225 lost 1.22% or 261.28 points when it closed today at 21,082.73. On the other hand, mainland Chinese and Hong Kong stocks are in the green. The Shanghai Composite Index finished 0.74% or 21.966 points at 2,992.897. As for the Hang Seng Index, it is trading more than 0.20% or 50 points its opening price at 26,350.5.
Yesterday, risk appetite picked up on speculations that central banks would ease rates in a concerted effort to stimulate growth. The RBA already cut rates earlier this morning and it is expected that the BOC would follow suit this week. Now, it would seem that investors are managing their expectations ahead of a statement from G7 countries. There are concerns that the announcement will not be bold enough to offset the adverse effects of the coronavirus outbreak.
Currencies are also mixed in today’s Asian session. AUDUSD is trading slightly above its opening price following the RBA rate decision. It is up 0.20% at 0.6551. NZDUSD is virtually unchanged at 0.6263. Meanwhile, USDJPY is the weakest among the majors. It is down 0.35% at 107.94.
Read our Best Trading Ideas for 2020.
USDJPY Outlook
On the 4-hour chart, USDJPY spent the past few trading days consolidating with a slightly upward slope. This follows after a sharp drop on the currency pair. Consequently, a bearish flag chart pattern has formed. In forex trading, this is considered as a bearish continuation signal. The Fibonacci retracement levels also suggest that sellers could be priming to push USDJPY lower. By connecting the high of February 20 to the low of March 2, we can see that the currency pair is trading just below the 23.6% Fibonacci retracement level. A strong bearish close below yesterday’s low at 107.35 could mean that USDJPY is headed to support at 106.60 where it bottomed on October 4.
On the other hand, a bullish close above yesterday’s high at 108.56 could mean that the currency pair still has room to trade higher. It could test resistance at 109.80 where the SMAs and 50% Fib level coincide.
Don’t miss a beat! Follow us on Telegram and Twitter.
More content
- Follow me on Twitter.
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.