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Daily Report: Yen Dives after BoJ Added StimulusYen was steeply sold off in Asian session today as BoJ announced to double the size of its asset purchase program. USD/JPY took out an important near term resistance level at 79.03 which confirms completion of recent fall from 84.17 and confirmed the underlying bullish outlook. EUR/JPY and GBP/JPY also strengthened, in particular, with GBP/JPY jumping through 128 level today. Yesterday's pullback in EUR/GBP helped sterling outperformed Euro. But the relative strength could very much depends on today's BoE minutes. Nonetheless we'd continue to expect European major currencies to outperform commodity currencies in near term. Meanwhile, yen would underperform dollar and would be the weakest one. |
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| Featured Technical Report | |
GBP/JPY Daily OutlookDaily Pivots: (S1) 127.07; (P) 127.65; (R1) 128.47; More... GBP/JPY's rally extends to as high as 128.81 so far today and intraday bias remains on the upside. Current rally should sign of acceleration by breaking near term channel resistance. Next target will be 161.8% projection of 118.82 to 125.82 from 120.82 at 132.14 next. On the downside, below 127.44 minor support will turn bias neutral and bring consolidations. But retreat should be contained well above 124.41 support and bring another rally. |
| Special Reports |
BOJ Speeds Up Easing, Expands Asset Purchases After ECB And FEDThe BOJ accelerated the pace of monetary easing by doubling the size of asset purchases, in addition to leaving the uncollateralized overnight call rate at around 0 to 0.1%. Slowdown in global economic growth and recent tensions between China and Japan over territorial dispute are expected to delay Japan’s recovery as exports growth would be affected. According to the central bank, the move is expected to 'help ensure that Japan's economy resumes a sustainable growth path with price stability'. The move came in earlier than market expectations, sending Japanese yen lower, and Nikkei stock index and cash bonds higher. RBA Minutes Unveiled Further Rate Cut PossibleAs hopes of another rate cut in the RBA in October loomed, the market has paid a lot of attention to the September RBA minutes. At the minutes, policymakers acknowledged that Australia's economic growth was still at trend. However, the decline in commodity prices and the slowdown in Chinese growth have weighed on the pace of recovery. On the monetary stance, the RBA believed that previous rate cuts have been effective but affirmed that further easing would be implemented if the economic conditions worsen. |
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Orders and Options Watch | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
European Session: Orders and Options WatchJPY: The greenback surged this morning in Tokyo after BOJ raised QE by 10 trillion yen and confirmed concerns over yen’s strength, offers and stops at 79.00-10 were cleared, however, offers from exporters are still noted at 79.30-40 and also around 79.60-70 with stops building up above 79.70 followed by mixture of offers and stops located further out at 79.95-05. On the downside, bids from Japanese investors are raised to 78.85-90 and also at 78.45-55 with stops placed below 78.40 but fresh demand from semi-official names should emerge around 78.00-10 with more bids reported at 77.70-80 and also at 77.50. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forex Trade Ideas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trade Idea: EUR/USD – Buy at 1.2990Although euro has rebounded after falling to 1.3030 yesterday, above 1.3117-20 (current level of the upper Kumo and yesterday’s high) is needed to signal the pullback from 1.3172 has ended and bring further gain towards this level, once this resistance is penetrated, this would extend recent upmove to 1.3190-00 but reckon upside would be limited to 1.3220-30 and price would falter below 1.3250, risk from there is seen for a minor correction to take place later. Trade Idea: USD/CHF – Sell 0.9355Despite overnight bounce to 0.9297, as dollar has retreated after failing to break indicted level at 0.9300, retaining our view that further consolidation would be seen and as long as last week’s low at 0.9240 holds, prospect of another rebound remains, above said resistance would bring retracement to previous support at 0.9343 but reckon 0.9355-60 would limit upside, bring another decline later. A break of said support would extend the decline from 0.9972 top for weakness towards 0.9220-25 Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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