The Forex market opens the week in a lively mood, with the Japanese Yen weakening almost everywhere.
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The USD/JPY currency pair is back in focus as the weaker Yen sends the pair higher to a level where another new 39-year high price starts to look possible. The weaker Yen has sent new bankruptcies in Japan to a record high. This new decline will raise fears of further intervention, although the Japanese financial establishment will be nervous of pouring money down the drain every week if the price just keeps bouncing back - the price has almost recovered all the effects of the intervention last week! The Japanese Financial establishment is trying to hold back a tide and that is a hard thing for any central bank to achieve. It is easy to weaken your currency but not so easy to strengthen it. One approach for traders might be to wait for intervention to drive the price substantially lower, and then to go long here when the price starts rising - this would have been very successful after the last intervention. Alternatively, trend traders can buy the breakouts and control their risk - it is unlikely that the Yen could rise by more than 3 long-term daily ATRs in a day, or at least, not by much, so don't be too intimidated by these threats if you are using a wide stop loss.
Since this week's Tokyo open, the Canadian Dollar has been the strongest major currency, while the Japanese Yen has been the weakest, putting the CAD/JPY currency cross in focus. The British Pound has been strong lately, so the GBP/JPY currency cross could be interesting on the long side.
Precious metals such as Silver and Gold are standing out as although several assets got a bullish bounce against the US Dollar last week, these precious metals saw the strongest bullish moves. The bullish bottom in Silver looks stronger than the bottom in Gold, but it has to be said that there is no strong sign of a major trend change, with the long-term trend very bearish.
Crude Oil is starting to bounce slightly after declining to a new 4-year low, with WTI trading below $67.50. I never short commodities, but those trend traders who do will likely still be short here. It is quite possible that the price of crude is not going to go meaningfully lower than what we have already seen, although a major bullish reversal is far from clear. However, if you believe the Gulf will heat up again in the coming months, you have to believe the price of crude is going to go higher.
Bitcoin is taking a bearish turn after rising quite firmly after it found support at the start of this month at $58,190. There is a long-term bearish trend although its health is in some doubt as bitcoin made a strong retracement that could arguably be an impulsive move.
Equities remain mixed, but in many major indices, within touching distance of record high prices.
There will be a release of US Services PMI data today.