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Forex Flash: What to do with the USD/JPY? – Danske Bank, Commerzbank and BTMU

FXstreet.com (Barcelona) - The BoJ will hold its 2-day meeting tomorrow and all the eyes will be upon the new Governor H.Kuroda and his long-waited announcements regarding measures to achieve the new 2% inflation target.

“JPY has been the big winner over the Easter period as poor US data have added to safe-haven demand ahead of the Bank of Japan meeting later this week where we expect that a set of changes to the asset-purchase programme, including making it open-ended, will weigh on the yen”, commented Senior Analyst C.Tuxen at Danske Bank.

In addition, Karen Jones – Head of FICC Technical Analysis at Commerzbank – suggested the cross “has eroded the 4 month uptrend and its 55 day ma at 93.13. It is possible that the move lower is simply an ‘a-b-c’ correction lower, but there is currently little impetus to bounce higher and we would allow for slippage to 92.09 and possibly 89.23, the 23.6% and 38.2% retracements”.

Lee Hardman, Currency Analyst at BTMU, argued “Current consensus expectations are for the BoJ to raise the total monthly purchase amount of JGBs from the current rate of just over JPY4.0 trillion towards JPY5.0-6.0 trillion. The BoJ is also expected to announce that it will purchase more longer-dated JGBs by removing the current 3-year limit fro JGB purchases under the APP. The yen weakening impact of the announcement will be dampened by already high expectations”.

Forex Flash: 10-year US treasury profile – RBS

The market continues to see a 1.72% to 2.15% range in 10-year US Treasuries, perhaps persisting through Q2. According to the RBS Research Team, “Key resistance remains 2.15% in 10-years while near-term support is 1.83% - our bias remains to modestly lower yields in the near-term because positioning is favorable (short) and medium-term charts are turning bullish for the first time since early December.”
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Forex: EUR/USD muted around 1.2835/40

The bloc currency remains in the red territory on Tuesday, orbiting around 1.2835/40 after failing to follow through the key level of 1.2880/5 overnight – where sits the 200-day moving average...
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