Japan's Economic Structure Disguises No Currency Decline

Summary:

USDJPY has recorded consecutive gains over the last 8 trading days until this week when it sets a new 20-year high, once reaching 135.590. This trend is as strong or even stronger than we saw between March and April, as it has directly pushed the JPY down 14% against the USD. Bank of Japan (BOJ) and finance ministers began to talk about the devaluation of the JPY, indicating that a sharp deterioration of the JPY is not desirable.

BUY USDJPY

EXP

EXPIRED

131.200

Entry Price

140.000

125.000

154.329 -1.599 -1.03%

Pips

EXPIRED

125.000

136.263

Exit Price

131.200

Entry Price

140.000

Fundamentals

In the last days of May, it became clear that monetary regulators preferred to continue quantitative easing without making any changes, a policy that contrasts with the aggressive tightening in the U.S. and many other advanced economies. It is also the underlying reason for the JPY's use as a financing currency.

If the BOJ manages to keep the JPY at another fundamentally lower level, it will restore the competitiveness of Japanese exports and provide the impetus to open up an industrial system that has stagnated in recent years. Meanwhile, if we now see Europe and the U.S. abandon their zero interest rate policies, as policymakers have recently hinted, investors should brace themselves for a permanent JPY decline this year.

Japan will likely continue to suffer from a weak economy plagued by sovereign debt, which will prevent the government from adding enough stimulus to spur economic growth. All of this sets the stage for USDJPY to rise to 140.00 in the coming weeks or to 150.00 by the end of the year.

However, the strong correlation between the 10-year U.S. Treasury Securities and the USDJPY dynamics suggests that the USDJPY is unlikely to be fixed above 150.00 in the absence of an economic disaster in Japan or the whole world.

USDJPY: Japan's Economic Structure Disguises No Currency Decline_1

Technical Analysis

The USDJPY exchange rate has been in a strong bullish trend for the past few months. In early June, it managed to break above the resistance level of 131.37, which is the highest level since May 11. Currently, the USDJPY's bullish trend remains supported by the 25-day SMA, while the Relative Strength Index is approaching overbought levels.

The bulls broke through the resistance level of 131.37, invalidating the double top pattern for the USDJPY. Therefore, the bullish trend is likely to continue unless the BOJ intervenes.

Although the USDJPY continues to be bullish, the 1M, 1W and 1D charts all show that it has been overbought and provides an unhindered tailwind for further gains. If the price pulls back from current levels, initial support will appear at the 131.35 level and then at 128.50. On the other hand, if the bulls maintain control of the market and succeed in pushing the price higher in the bullish candlestick chart of a larger cycle, then the focus of the market will shift upward to the 1998 high of 147.65. It's recommended to go long at lows.

Trading Recommendations

Trading direction: Long

Entry price: 131.20

Target price: 140.00

Stop loss: 125.00

Deadline: 2022-06-30 20:00:00

Support: 129.55, 127.96, 126.33

Resistance: 137.70, 139.15, 140.70

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Eva Chen

Central Bank

Summary:

The AUDUSD saw a short-covering pattern on Wednesday. It appears that the five-day decline has ended, with the lowest level lower than over a month's low of 0.6850. The pair maintained its rally during the European session and was last traded near its daily high, which was slightly above the 0.6900 integer mark.

BUY AUDUSD

Close Time

CLOSED

0.68700

Entry Price

0.71900

0.67700

0.62817 -0.00254 -0.40%

38.1

Pips

Profit

0.67700

0.69081

Exit Price

0.68700

Entry Price

0.71900

Fundamentals

Following its recent rise to a two-year high, the US dollar (USD) saw some profit-taking during the European session on Wednesday as US Treasury yields weakened. In addition to this, reduced liquidity caused by the market awaiting the Fed's critical interest rate resolution has further weakened safe-haven demand for the USD and provided some support for the risk-sensitive AUD.

Nonetheless, any meaningful price recovery seems difficult to trend amid expectations that the Federal Reserve (Fed) will accelerate its tightening of monetary policy to curb soaring inflation. Indeed, US federal funds futures showed that the probability of a 75 basis point rate hike was rising at the end of the two-day FOMC monetary policy meeting on Wednesday. Moreover, the probability of another 75 basis point rate hike in July is also on the rise.

The prospect of a more aggressive move by the Fed will push US bond yields higher and favor USD bulls. Therefore, it is prudent to wait for strong follow-through buying before confirming that a near-term bottom has formed in AUDUSD. The broader market risk sentiment will still provide momentum for the AUDUSD pair and allow investors to take advantage of short-term opportunities. Nevertheless, the focus remains on the press conference following the FOMC resolution.

AUDUSD: Rising Risk Sentiment Will Boost the Rise in AUD_1

Technical Analysis

The AUDUSD has been in a steep descending trend after failing to break the 0.7282 level in early June. However, during the European session on Wednesday, a new boost was offered to the AUD as risk sentiment recovered.

Although the pair has managed to stabilize in the last four hours of trading, it is still not solid. Besides, the falling 50-day simple moving average (SMA) is closing the gap with the 200-day SMA, and the potential decline will be extended further.

Momentum indicators reflect a cautious bullish bias. Specifically, the stochastic oscillator has risen sharply; Although the golden cross of the MACD has formed at the bottom, it is still in negative territory after all; A further rise in price will still face strong pressure from the (4-hour chart) Bollinger middle band, etc.

The pair will meet the initial resistance level at the recent high of 0.6970 if buying interest increases. A break above this area allows the bulls to target the 0.7033 mark for further testing to the upside. This mark has acted as both support and resistance in the past two months. Before the bullish target turns to 0.7245, the further ascending trend will stop at the 0.7135 mark.

On the other hand, if the pair fails to rally and continues to fall, 0.6892 will be the first support level; if it fails to hold that support, the recent reversal point at 0.6850 can be a tough hurdle for the bears to overcome.

Overall, the AUDUSD has managed to stop its short-term decline, but there is still a long way to go for its short-term outlook to turn bullish. Therefore, if the pair falls below the support level of 0.6850, the bears are expected to resume their recent descending trend. It is recommended to go long at lows.

Trading Recommendations

Trading direction: Long

Entry price: 0.6870

Target price: 0.7190

Stop loss: 0.6770

Valid until: 2022-06-30 20:00:00

Support: 0.6850/0.6828/0.6758/0.6647

Resistance: 0.6970/0.7000/0.7015/0.7066

Risk Warnings and Disclaimers

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Eva Chen

Central Bank

Summary:

Global indices have fallen sharply over the past few days. The sharp rise in inflationary pressures has caused panic among central banks as they rush to tighten policy to help lower price levels. In turn, investors have seen their portfolios suffer significant losses and then cut their positions to lower their risk. This further intensified the sell-off. As an increasing number of technical levels are broken, we see buying pressure rising in response.

BUY XAUUSD

Close Time

CLOSED

1814.00

Entry Price

1865.00

1804.00

2744.86 -25.94 -0.94%

137.6

Pips

Profit

1804.00

1827.76

Exit Price

1814.00

Entry Price

1865.00

Fundamentals

The gold market has finally seen some strong price movements over the past few days and has broken out of the sideways trading range of the past few weeks. As usual, significant price movements in the gold market have been accompanied by some new and unexpected economic data. These data tend to indicate more uncertainty created by asset prices in the short term.

Last Friday, gold saw a "perfect" bullish bull candle again within the time frame of the 200-day moving average (MA). Moreover, the price also broke the ascending trend line around the critical level of $1850. However, this happened at the wrong time (both bond yields and the USD rose at the same time). This meant that few people were willing to follow through, triggering a substantial institutional sell-off in gold and causing the price to plummet.

The ultimate result is that there is a huge bearish engulfing candlestick formed in gold on the daily chart time frame. This suggests that the potential room for a significant decline is thus started. This, therefore, also means that any rally in the range is a trap.

The sharp sell-off that gold has suffered this round provides us with four medium-term bearish signals.

Firstly, Friday's bullish momentum was engulfed in the daily chart, clearly showing the strength of the bears.

Secondly, the gold price halted as it approached the 50-day MA. The strong reversal suggests that the medium-term trend remains bearish.

Thirdly, in a decisive downward breakout, gold fell below the 200-day MA, which is an essential long-term bearish trend signal. A consolidation below this line will be a continuation of a further descending trend. Investors will usually increase their sell-offs on such a signal to lower their risk.

Fourthly, there was a price correction and a need for risk aversion in Wednesday's price rally. This is not the start of a reversal. Even if the price continues to stabilize above the 1834 range, the price has still not been able to escape the suppression of the April lows. This means that further price gains are still difficult to follow.

Taking all these considerations into account, we believe that the possibility of a further downward correction in gold prices in the medium term will increase steadily.

XAUUSD: Recommend to Long at Lows in the Range_1

Technical Analysis

After Monday's sell-off, gold fell below the oscillating consolidation range of the past few weeks. It has also temporarily fallen below the support level of $1810, with some stopping signals. Meanwhile, it also rallied at an apparent support level with a certain need for continuation. However, the trend in price has rallied from that level and risen. Further gains can be locked in at the upper limit of the resistance range at $1845. This is because it is most probable that the price movement will enter the range rather than hold in the short term. If the initial resistance level is broken, then a further test of the resistance level at $1852 will be in order. It is essential to continue to focus on the resistance of the 200-day MA. If the price stabilizes above trendline support again in the future, it will continue to rise in oscillation.

With a broadly bearish scenario, we see that the support level at $1798 is the first target for the bears to test. Meanwhile, the RSI has fallen to the level of 30. However, the quick recovery of some of the losses suggests that the market is still in a state of sell-off from the previous day. With a break of the support level at $1798, we will change the current concept in sideways trading. It is recommended to go long at lows in the range.

Trading Recommendations

Trading direction: Long

Entry price: 1814

Target price: 1865

Stop Loss: 1804

Valid until: 2022-06-30 20:00:00

Support: 1809

Resistance: 1825/1834/1852

Risk Warnings and Disclaimers

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Winkelmann

Summary:

The supply-demand imbalance in the crude oil market has not yet significantly improved. As a result, oil prices will continue to run at highs and remain on an ascending channel overall.

BUY BRENT

Close Time

CLOSED

115.800

Entry Price

120.000

113.700

77.121 -0.406 -0.52%

145.0

Pips

Profit

113.700

117.250

Exit Price

115.800

Entry Price

120.000

Fundamentals

The oil price has remained on the rise since this year as supply in the crude oil market remains tight. Brent oil once soared to a new high of around 123.0 in more than three months. However, the market has recently been concerned that the Federal Reserve (Fed) will raise interest rates more sharply. This has caused prices in non-US currencies, stock markets, and crude oil markets to fall.

In addition, some officials in the US Senate plan to introduce legislation that will impose a huge surtax on profitable oil companies. Meanwhile, the US Department of Energy also announced a fourth round of releasing 45 million barrels of crude oil from the Strategic Petroleum Reserve. Coupled with an unexpected increase of 0.74 million barrels in API crude oil inventories, the OPEC lowered its annual crude oil demand forecast for 2022. The multiple bearish news pressures the oil price.

However, OPEC's monthly report showed that OPEC oil production fell by 0.176 million barrels in May, failing to meet the previously agreed target of increasing production. Although the organization has agreed to accelerate its production increase, investors have questioned whether its capacity will help achieve its goal of cooling the oil market. Overall, the supply-demand imbalance in the crude oil market has not yet significantly improved, and oil prices will continue to run at highs.

Technical Analysis

In the daily chart, BRENT has pulled back after rising to 123.0. Meanwhile, the indicator RSI fell from the overbought territory, and oil prices experienced a consolidation at highs. The nearest key support level is around 118.0. As long as this support level is not broken effectively, the price is still expected to rise again in the future.

BRENT: Oil Prices Run at Highs as Supply-Demand Imbalance Remains Unchanged _2

In the 4H chart, BRENT fell rapidly back to the starting point after a short-term rise, with the momentum of the rise weakening significantly. However, the overall ascending trend has not yet been reversed, and there is still the possibility of rising in the future. But the short-term volatility can increase, and it is necessary to beware of being induced to go short.

It is recommended to go long at lows. You can try to go long when the price pulls back to near 116.0. The initial target is around the high of 120.0, with a stop-loss set below 114.7.

Trading Recommendations

Trading direction: Long

Entry price: 115.8

Target price: 120.0

Stop Loss: 113.7

Support: 118.0/115.7

Resistance: 120.0/123.0

Risk Warnings and Disclaimers

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Warren Takunda

Traders' Opinions

Summary:

As it confirmed a double bottom in my support area , and i believe it may be a reversal to an uptrend.

BUY EURUSD

Close Time

CLOSED

1.05000

Entry Price

1.06500

1.04000

1.05058 +0.00146 +0.14%

17.7

Pips

Profit

1.04000

1.05177

Exit Price

1.05000

Entry Price

1.06500

Hello traders, theres strong long opportunity on this pair. as it confirmed a double bottom in my support area , and i believe it may be a reversal to an uptrend. therefore i believe price will move up to 1.065 the minimum price objective . High impact news release expected today so trade carefully

TRADE RECOMMENDATION

LONG EURUSUD

ENTRY PRICE : 1.0500

SL : 1.0400

TP : 1.0650

EXP 20 JUNE 22

Risk Warnings and Disclaimers

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Jason

Summary:

It remains to see how the FOCM policy meeting will end up, but until then, gold is expected to have limited gains.

SELL XAUUSD

Close Time

CLOSED

1827.62

Entry Price

1817.30

1831.65

2744.86 -25.94 -0.94%

40.3

Pips

Loss

1817.30

1831.82

Exit Price

1827.62

Entry Price

1831.65

Fundamentals

Gold turned from gain to loss in the European session on Tuesday, hitting a low at $1804.98/oz, a new low since May 17, and closed at $1808.21/oz, down 0.6%, mainly dragged down by market expectations of a rate hike. The market is currently awaiting the results of the Fed's policy meeting, which will reveal how aggressive the Fed's policy path will be. CME's Fedwatch tool shows the probability of the Fed raising rates by 75 bps at this meeting soared to 96.7%, which helped the dollar refresh its nearly 20-year high to 105.66 on Tuesday. the current dollar bulls have converged, but no one dares to go short the dollar in a strong rate hike atmosphere. The former long profit-taking is also conducive to new long positions. Due to the market being ahead of the curve, resulting in the market will not wait for the end of the Fed meeting before acting, they will jump ahead, which is why there was no pullback after the dollar's big rally on Friday.

For now, it remains to see how the FOCM policy meeting will end up, but before the meeting, gold is expected to have limited gains.

Technical Analysis

In the daily chart, yesterday gold's high was blocked by the golden mean of 38.2 (1829.30), with support below the price at the bottom of the channel, which has supported gold several times and is strong. As for the indicators, the Stoch DIF has entered the oversold zone, and the market needs to pay attention to the formation of a golden cross. In the Ichimoku table, the baseline and the turn line crossed and the price moved away from both. Both of them show that gold will rise in the short term. Considering that gold has risen by $16, you can try to short the high level before the policy meeting.

XAUUSD: Gold Higher Before Meeting, Focus on 1827.62_1

Trading Recommendations

Trading direction: short

Entry point: 1827.62

Target: 1817.30

Stop loss: 1831.65

Support: 1822.51, 1817.30, 1807.23

Resistance: 1827.62, 1833.30, 1838.74

Risk Warnings and Disclaimers

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Winkelmann

Summary:

Although U.S. natural gas production and exports have soared to record levels, U.S. natural gas inventories remain below normal levels for the same period and U.S. natural gas prices are likely to remain high for some time to come.

BUY NAT.GAS

Close Time

CLOSED

6.660

Entry Price

8.000

5.950

3.226 -0.203 -5.92%

10.1

Pips

Profit

5.950

6.761

Exit Price

6.660

Entry Price

8.000

Fundamentals

Natural gas prices have continued to rise as concerns about tight supply have intensified. The conflict between Russia and Ukraine has exacerbated the shortage of energy supplies, driving up the global price of natural gas and prompting European and Asian buyers to compete for US liquefied natural gas supplies.

Meanwhile, as the Northern Hemisphere enters the hot summer months, the use of air conditioning increases in hot weather. And the National Oceanic and Atmospheric Administration forecasts that the U.S. as a whole will enter a dry period, with a decline in hydroelectric power generation, fueling a rise in demand for LNG power generation and a rise in U.S. natural gas prices.

In addition, on June 14, local time, the U.S. liquefied natural gas (LNG) terminal Freeport said that due to an explosion at Freeport, which is still in a shutdown, about 70% of Freeport's daily LNG flow to Europe in the past few months. The shutdown will lead to a significant weakening of the U.S. ability to export natural gas to foreign countries, which is beneficial to the U.S. domestic natural gas supply, so the U.S. natural gas prices plunged in the short term.

However, as maintenance work on the Freeport LNG terminal proceeds, the sooner operations resume, the better for U.S. natural gas exports. Although U.S. natural gas production and exports have soared to record levels, U.S. natural gas inventories remain below normal levels for the same period, and U.S. natural gas prices are likely to remain high for some time to come.

Technical Analysis

NG: U.S. Natural Gas Consolidates at Highs with Greater Exports and Lower Inventories_1

In the 1D timeframe, the U.S. natural gas bulls since the beginning of the year are consolidating at the highs below the US$10 threshold, and the indicator RSI is also declining from the overbought zone, with a possible short-term decline towards the major support level below near 6.53.

NG: U.S. Natural Gas Consolidates at Highs with Greater Exports and Lower Inventories_2

In the 4H timeframe, after a short-term sharp drop in U.S. natural gas, a slight adjustment was made for a further stable trend. The indicator RSI has entered the oversold zone, with robust momentum of declining in the short term. It is still possible to continue its decline before rebounding.

It is recommended to go long when the price returns to 6.53, with the short-term target at 8.0 and the stop loss below 6.53.

Trading Recommendations

Trading direction: Long

Entry price: 6.66

Target price: 8.00

Stop loss: 5.95

Support: 6.53/6.00

Resistance: 8.10/8.95

Risk Warnings and Disclaimers

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Japan's Economic Structure Disguises No Currency Decline

Fundamentals

Technical Analysis

Trading Recommendations

Rising Risk Sentiment Will Boost the Rise in AUD

Fundamentals

Technical Analysis

Trading Recommendations

Recommend to Long at Lows in the Range

Fundamentals

Technical Analysis

Trading Recommendations

Oil Prices Run at Highs as Supply-Demand Imbalance Remains Unchanged

Double Bottom

Gold Higher Before Meeting, Focus on 1827.62

Fundamentals

Technical Analysis

NG: U.S. Natural Gas Consolidates at Highs with Greater Exports and Lower Inventories

Fundamentals

Technical Analysis

Trading Recommendations

Risk Disclosure