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Market Brief: Nikkei 225, Hang Seng Index, and USDJPY Flat as Trading Volumes Drop

Nikkei 225
Nikkei 225

Equities, USDJPY, and AUDUSD Flat; NZDUSD Trades Higher

The Nikkei 225 finished today’s trading slightly higher by 9.5 points or 0.04% at 23,830.6. On the other hand, the Hang Seng Index is down 42.2 points or 0.15% at 27,864.2.

USDJPY is consolidating within an 8-pip range, trading around 109.40. AUDUSD is also unchanged at its open price at 0.6920. On the other hand, NZDUSD is up 20 pips from its Asian session lows at 0.6638.

Event Risks on the Horizon

Some markets are already closed today ahead of Christmas. This could probably explain why equities markets were flat in the Asian session. However, there are a few event risks that could possibly possibly spark volatility in the markets. For one, Chinese Premier Li Keqiang is hosting a summit for Japanese Prime Minister Shinzo Abe and South Korean President Moon Jae-in. Meanwhile, there are speculations that North Korea could launch a missile tomorrow. Positive trade talks could push equities higher. On the other hand, a missile launch could spark risk aversion and push stocks lower.

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USDJPY Outlook

On the hourly time frame, a symmetrical triangle has materialized. This becomes apparent when you connect the currency pair’s recent highs and lows. This chart pattern is usually interpreted as a consolidation and that the market could soon break out to either side of the triangle. A bullish close above today’s Asian session highs at 109.42 could mean that USDJPY is on its way to re-test last week’s highs around 109.65. On the other hand, a bearish close below yesterday’s low at 109.32 could mean that USDJPY may soon trade lower to last week’s lows at 109.17.