Currency Pairs USD/JPY and EUR/JPY Elliott Wave cycles Point Resistance

As such, there is still a chance for a reversal, ideally, after the current fifth wave that is moving into 114.50-114.80 resistance area.

As per Elliott Wave analysis, USDJPY has completed the 5th wave as an ending diagonal (wedge) pattern and that weakness will resume towards much lower prices as a drop from 115.52 unfolded as an impulse. Ideally, that was wave A)/1), so more weakness is coming after an A-B-C rally within wave B)/2), which can be now approaching important resistance here around 61,8%-78,6% Fibonacci retracement and 114.50 level, from where we should be aware of another decline for wave C)/3).

USD/JPY 4h Elliott Wave Analysis

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EURJPY is still in sideways consolidation in the 4-hour chart, which still looks like wave 4 correction, but we see 130.00 psychological level as key resistance, from where we have to be aware of another sell-off for wave 5, especially if we consider bearish looking EURUSD and resistance on USDJPY.

EUR/JPY 4h Elliott Wave Analysis

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EUR/JPY and CAD/JPY Currency Pairs Elliott Wave Cycles Point Downside

However, after recent bounce seems like EURJPY is forming a bearish triangle pattern, so we may see a sideways consolidation, but still be aware of a bearish continuation for the final wave 5 of C) before it finds the support.

EUR/JPY 4h Elliott Wave Analysis

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CADJPY is turning sharply down from the highs on a daily chart, which suggests that a five-wave cycle is completed. So, we are now tracking a three-wave A-B-C correction that can send the price at least back to 38,2% Fibonacci retracement and to the former wave 4 support. Currently seems to be wave B still in progress and once it’s fully finished, be aware of another wave C decline.

CAD/JPY Daily Elliott Wave Analysis

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Indices Try to Correct Lower and EUR/USD to the Upside

SP500 reaches an important resistance and creates a head and shoulders pattern on the lower timeframes. The neckline isn’t broken yet, so buyers can still chill.

DAX is correcting a recent surge inside of a flag formation.

Silver is raising pressure on a long-term horizontal support.

EURJPY with a false bearish breakout is ready for a new bullish wave.

CHFJPY is locked inside of the rectangle between two Fibonacci’s: 23,6% and 38,2%.

EURUSD is trying to initiate the reversal with an inverse head and shoulders pattern but is still trading below the neckline.

GBPUSD is still under heavy selling pressure but may use the 38,2% Fibo in order to create some kind of a bounce in those oversold conditions.

For a look at all of today’s economic events, check out our economic calendar.

Traders Were Hoping for a Stronger Bounce I Guess…

So far, the recovery from Friday’s carnage is, let’s say, pretty mild. The same mild as apparently, the symptoms from the new coronavirus strain are. That information was about to drive today’s reversal but as you can see, traders are not encouraged to buy the dip at this point.

Gold is defending the mid-term up trendline.

SP500 bounced during the Asian session but the European one does not start well.

DAX is giving back almost all gains from the Asian session.

USDJPY continues the downswing after the breakout of the mid-term up trendline.

EURJPY drops after breaking crucial horizontal support.

AUDNZD continues a very technical movement by creating a wedge finishing the correction on the 38,2% Fibonacci.

USDCHF is trading lower after the false breakout from the symmetric triangle.

The Mexican Peso continues the weakening to USD and EUR despite quite a good opening after the weekend.

For a look at all of today’s economic events, check out our economic calendar.

Risk Off Is Back. Indices and EM Currencies Drop. Safe Havens Surge

Shocking night and morning for the vast majority of stock bulls. Indices are collapsing and the new strain of the virus is apparently to blame.

In this situation, safe-haven assets like gold for example are gaining traction. Gold is aiming higher after breaking the neckline of a small inverse head and shoulders pattern.

Yen is also gaining, USDJPY is currently performing an attack on the mid-term up trendline.

EURJPY is testing crucial long-term horizontal support on the psychological level of 128.

USDCHF is dropping after the false breakout from the symmetric triangle pattern.

EURUSD is trying a small bullish reversal to test the major horizontal resistance.

USDMXN advances higher after the breakout of an important horizontal resistance.

EURMXN continues the rise after the price escapes from a beautiful wedge pattern. A price action classic!

For a look at all of today’s economic events, check out our economic calendar.

Gold, Stocks and USD Do Not Stop Gaining Momentum

Gold continues the upswing coming from the inverse Head and Shoulders pattern.

Silver is as well, but here we’re experiencing a flat correction in the form of a pennant.

DAX ends another flat rectangle and makes new all-time highs.

EURJPY breaks the last important Fibo line and enters the bear market.

AUDNZD breaches the horizontal resistance and aims higher.

CHFJPY drops, driven by a very handsome Head and Shoulders pattern.

USDCHF is inside of a giant symmetric triangle pattern. We’re currently aiming at its upper line.

EURUSD continues the long-term descend. The Head and Shoulders pattern is in play here as well.

GBPUSD is still relatively safe as here we are still inside of the flag formation.

EURPLN is breaking the upper line of the ascending triangle pattern.

For a look at all of today’s economic events, check out our economic calendar.

Silver and Gold Do Not Ease the Tempo

Definitely, the main story for most traders is the buy signal on precious metals. This is no surprise, and if you’ve been following Trader’s Edge, you’ll know that I’ve been expecting this for quite some time.

Gold created a very handsome inverse head and shoulders pattern, which created enough bullish momentum to break crucial horizontal and dynamic resistances. We may experience a pullback but the buy signal is here to stay.

Silver made an even better iH&S formation. We already broke the neckline of this pattern and the positive sentiment is all over the place.

SP500 looks positive and the correction from the previous week is probably only a memory now.

DAX is climbing higher, making stairs so flat horizontal corrections. New all-time highs are pretty close.

EURJPY is defending the last important support. Once it’s gone, any positive sentiment will be gone too.

EURNZD is showing us the power of the bearish trend and also the power of a false breakout.

AUDNZD is aiming few important resistances inside of a wedge pattern. This can end with a massive drop.

CHFJPY is showing us two head and shoulders patterns. One is already fulfilled. The second one’s in progress…

For a look at all of today’s economic events, check out our economic calendar.

EUR/JPY Bearish Impulse is Stronger Due to Gravestone Doji

EUR/JPY Technical Analysis

  • Bearish momentum
  • We can see the stronger bearish pressure
  • Yen is getting stronger
  • The drop below M L3 signals continuation

  1. Low point
  2. Order block
  3. Swing low
  4. Swing high
  5. Gravestone Doji

The price is bearish. Yen is getting stronger. Don’t forget the basics.

Yen strength

1.100% risk off sentiment

2.Gold up

3.Commodities prices down

4.Equities down

5.Yen strengthens as a result

At this point the market has established the Gravestone Doji variant 2. Expectation is that the EUR/JPY will reject lower below M L3. The entry is 130.60. Targets are 130.13 and 129.08. The daily bearish close below the M L3 will give additional momentum to bears.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

Week In Review: Fed Taper Time, Strong Jobs Report, Record Highs

Monday kicked off on a positive note as encouraging economic data and upbeat earnings fuelled the risk-on mood. In the currency space, the greenback entered November on a shaky note while gold derived strength from subdued Treasury yields.

Our trade of the week was none other than the dollar. We discussed the possibility of increased volatility due to the Federal Reserve meeting and highly anticipated US jobs report on Friday. At the start of the week, the equally traded USD Index was trapped within a range with support at 1.0730 and resistance at 1.0810. Prices concluded the week at 1.0864.

A sense of caution returned to markets on Tuesday ahead of key risk events this week. Earlier in the morning, the Reserve Bank of Australia (RBA) scrapped its ultra-low target for bond yields. Such a move was seen as a step to winding back the emergency measures to support the economy during the coronavirus pandemic.

Mid-week, it was all about the Federal Reserve rate decision. However, before the pivotal meeting, we covered JPY crosses in our technical outlook. There were a couple of breakout setups, especially on the EURJPY and GBPJPY.

After talking about talking about tapering for many months, the Fed has finally taken steps away from its emergency policy. On Wednesday evening, the US Fed announced it is winding down the massive stimulus programme it enforced during the Covid-19 pandemic. When in the spotlight, Fed Chair Jerome Powell made it clear that tapering is not tightening with the central bank in no rush to pull the trigger on higher rates.

In other news, OPEC+ maintained plans for a gradual return of output despite pressure from the United States to raise supply. Despite the sharp rebound in oil prices on Friday, it was a rough week for the commodity after industry data pointed to a larger than expected build in crude oil inventories last week. Oil could be experiencing early signs of a technical pullback that may drag prices lower before bulls re-enter the scene.

Closer to home, the Bank of England defied markets by keeping interest rates unchanged on Thursday. Despite a series of hawkish comments from Governor Andrew Bailey in the run-up to this meeting, he was among those opting to keep policy unchanged this month. Sterling tumbled like a house of cards following the decision with the GBPUSD tumbling as low as 1.3424 this week.

Across the Atlantic, the US economy created 531,000 jobs in October, beating the 450,000 expectations and higher than the 312,00 revised number for September. In regards to the unemployment rate, it fell to 4.6% from 4.8% – also beating market estimates. Average hourly earnings rose 0.4% on a month-over-month basis for a 4.9% annual gain.

While the jobs report certainly paints an encouraging picture of the job market, this needs to be consistent in order to force the Fed to become more focused on raising rates. The S&P500 rallied following the NFP report, closing at a record high for the sixth straight day.

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Japanese Yen Seems Weaker Against Major Currency Paris: Elliott Wave Analysis

However, this JPY weakness may not be seen only vs majors, but vs USD as well, as USDJPY pair shows only three wave set-back followed by a nice break out of a channel. As such, we think more upside can be coming this week, to around 115.00

USDJPY came once again slightly lower on 4h time frame, but not in five waves yet, so it can be just another correction within the uptrend especially after a bounce from 113.20 support. We see that retracement as a wave four so there is room for 115.00-115.50 this week.

USDJPY 4h Elliott Wave Analysis

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As expected, EURJPY is making a nice correction within wave 4) in the 4-hour chart, which looks to be still in play or maybe already finished after reaching 38,2% Fibonacci retracement. Anyway, support is still good here in the 132.0 – 131.0 zone, so sooner or later we can expect a continuation higher for wave 5), while the price is above 130.40 invalidation level.

EURJPY 4h Elliott Wave Analysis

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GBPJPY is slowing down in the 4-hour chart after a push above May highs, which we ideally see as part of wave iv) correction of a five-wave bullish impulse, mainly because of slow and corrective price action. So, more upside is in view for wave v), probably from current 13 May swing high that can act as strong support here in the 156-155 zone.

GBPJPY 4h Elliott Wave Analysis

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Week In Review: Tech Disappoints, US Growth Slows, Inflation Concerns

Monday kicked off on a cautious as a fresh Covid-19 outbreak in China fuelled worries over slowing growth in the world’s second-largest economy. However, the mood slightly improved as investors banked on strong corporate earnings to lift risk sentiment. On the data front, the German IFO Business Climate Index fell from 98.9 to 97.7 thanks to supply bottlenecks. In regards to earnings, Facebook (Meta Platforms Inc) reported a mixed earnings result with earnings per share (EPS) beating estimates but revenues missing analyst forecasts.

Our trade of the week was the EURJPY due to the Bank of Japan (BOJ) and European Central Bank (ECB) meetings on Thursday. Although both central banks left interest rates unchanged, there were some interesting takeaways. The BOJ cut its economic growth forecast for 2021 to 3.4% compared to the 3.8% previously expected while the ECB pushed back against rising interest rate hike expectations. Overall, it was a pretty choppy week for the EURJPY with prices swinging within a 100-pip range. The bearish close on Friday could open doors to lower levels in the new month.

All eyes were on the tech giants on Tuesday with Alphabet, Microsoft, and Twitter due to report their earnings after the closing bell. Alphabet and Microsoft reported better than expected quarterly profit and revenue. However, Twitter’s third-quarter earnings missed analysts’ forecasts but met estimates on revenue. In other news, consumer confidence in the United States rebounded in October, rising to 113.8 up from 109.8 in September.

Mid-week, a lot was going on across financial markets. We had industrial profits from China, Germany’s latest consumer confidence report, the UK government’s autumn budget, and the Bank of Canada rate decision.

One of the biggest takeaways from the Autumn budget was that the UK economy was expected to return to pre-Covid levels by 2022 with annual growth set to rebound by 6.5% this year. In regards to inflation, it was seen rising to average 4% over next year, according to the Office for Budget Responsibility. Market-wise, the dollar was shaky, gold struggled to keep above $1800 while oil tumbled after data showed a larger than expected increase in U.S crude stockpiles.

On Thursday, the BOJ and ECB left interest rates unchanged as widely expected. There was a lot of attention directed towards the US Q3 GDP and earnings from not only Amazon but Apple. Market sentiment took a hit thanks to the disappointing growth figures from the United States. The largest economy in the world grew at a 2% annualized pace in Q3 – its slowest increase since the end of the 2020 recession. To add insult to injury, both Apple and Amazon had rare earnings disappointments – raising questions about labour shortages, supply squeezes, and rising inflation.

Speaking of inflation, the core Personal Consumption Expenditure (PCE) Index which is the Fed’s favoured measure of inflation held steady at 3.6% in September. Headline inflation, including food and energy, rose at a 4.4% annual rate in September from 4.2% in the prior month. When factoring in how US CPI remains at a 13 year high, this may fuel expectations over the Fed raising interest rates sooner than expected. King dollar appreciated aggressively following the PCE report while gold tumbled, ending the week on a negative note.

By Lukman Otunuga Senior Research Analyst

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

EUR/JPY Time for Bears to Celebrate

EUR/JPY Technical Analysis

  • Looks like a roof top pattern
  • The break below the trendline is bearish
  • New lower low should come into play

  1. Order block zone
  2. Rally High
  3. Break below the trendline
  4. Target 1
  5. Target 2

The price is in downtrend. Seems like we are in risk off mode. During the 100% risk off sentiment:

1.Gold up

2.Commodities prices down

3.Equities down

4.Yen strengthens as a result

This happens because the Japs can get cheap credit, so they invest overseas heavily. When its risky, they bring the money back creating demand for Yen and vice versa, when its bullish Equities, they pump their money overseas, which means they sell Yen and buy foreign currency. At this point Yen is getting stronger. Expectation is that the pair should be moving towards 131.37 and 130.66 respectively.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

Say Bye-Bye to Major Supports. We May Not See Those Levels for a While

And it happened! The bears were talking about this for a long time and it finally happened; a bearish correction. The price broke the long-term up trendline on the SP500 and is aiming lower. The target for the drop is still far away, so it might be nice to buckle up.

The DAX also dropped like a rock after the breakout of the long-term up trendline and the neckline of the triple top formation. The next target: 14100 points.

Although indices are sliding, gold is not climbing higher. A stronger dollar is definitely not helping.

The GBPUSD came back inside the falling wedge pattern. That’s definitely negative.

The CADJPY is aiming for the 38,2% Fibonacci to test it as a crucial support.

The EURNZD is inside a small sideways trend. A breakout from it, will show us a direction.

The EURJPY has failed to create the inverse head and shoulders pattern and dropped lower.

The USDJPY bounced from the upper line of the triangle and brought us a sell signal with the target being on the lower line of this pattern.

For a look at all of today’s economic events, check out our economic calendar.

Situation on Major Instruments Before the Inflation Data

The SP500 tries a reversal with an inverse head and shoulders pattern bouncing off a major up trendline.

The DAX is very close to breaking two major horizontal resistances.

Gold is on the way to test an important horizontal support at 1782 USD/oz.

Oil continues its upswing after escaping from the flag pattern.

The EURCHF needs to close the day above the down trendline in order to get a proper buy signal.

The EURJPY is in the process of creating a right shoulder of a very promising inverted Head and Shoulder pattern.

The EURNZD continues the drop after broken supports were tested as resistance.

The AUDCAD is going to test a major support level on the 38,2% Fibonacci.

The USDJPY is getting closer and closer to end the long-term symmetric triangle pattern.

For a look at all of today’s economic events, check out our economic calendar.

The New Week Starts With the Risk ON Mode

Indices are trying to start the new week off on the front foot.

SP500 bounces from the long-term up trendline in the same way it did many times before.

Gold escapes from the wedge to the downside. The negative sentiment is back.

Oil breaks the upper line of the flag and aims higher.

EURUSD goes down after the breakout of the neckline.

GBPUSD with a third Head and Shoulders pattern in a row. The previous two worked flawlessly.

AUDCAD, after a flat correction, is ready for another upswing.

USDJPY gets close to the end of the symmetric triangle, we’re waiting for a bigger move here.

EURJPY has a chance of creating a nice right shoulder, which would help to end the bearish correction.

EURNZD is ready to continue the downswing after the price tested broken supports as the closest resistances.

For a look at all of today’s economic events, check out our economic calendar.

Reversal on USD and JPY

Stocks are rising higher, again. DAX broke an important dynamic resistance and is ready for the new all-time highs.

Gold is slowly climbing up the stairs supported by the weaker USD.

The EURUSD recently broke the upper line of the wedge and is back above the neckline of the H&S formation. That’s very positive and the buy signal is ON.

The GBPNZD broke a combination of three dynamic resistances. That could mean only a sell signal.

The EURJPY is out from the falling wedge pattern. Sentiment is back to positive.

The NZDJPY on the other hand is out from the flag pattern but also to the upside with a proper buy signal.

The GBPJPY is still waiting for its turn. We are in the middle of the symmetric triangle, still waiting for the breakout.

For a look at all of today’s economic events, check out our economic calendar.

Key Events This Week: Cooling US Jobs Market May Give USD Bears Room to Breathe

Here are the events that could move global financial markets this week:

Monday, August 30

  • JPY: Japan July retail sales
  • EUR: Eurozone August economic/consumer confidence

Tuesday, August 31

  • JPY: Japan July industrial production and unemployment
  • CNH: China August manufacturing and composite PMIs
  • NZD: ANZ August business confidence
  • EUR: Eurozone August CPI
  • CAD: Canada GDP (June, 2Q)
  • USD: US August consumer confidence

Wednesday, September 1

  • CNH: China August Caixin manufacturing PMI
  • Japan, Eurozone, UK, US manufacturing August PMIs
  • EUR: Eurozone unemployment
  • Brent Oil: OPEC+ decision on production
  • US Crude: EIA crude oil inventory report

Thursday, September 2

  • EUR: Eurozone July PPI
  • USD: US weekly jobless claims

Friday, September 3

  • CNH: China Caixin August services and composite PMIs
  • JPY: Japan August services and composite PMIs
  • GBP: UK August services and composite PMIs
  • EUR: Eurozone July retail sales, August services and composite PMIs
  • USD: August US nonfarm payrolls, services and composite PMIs, ISM services index

Tapering now less-feared?

Despite saying he is open to pulling back on the central bank’s asset purchases this year, Powell sought to divorce the idea of tapering as an immediate precursor to a US interest rate hike.

In other words, although the Fed’s tapering may indeed start this year, the rate hike may not follow soon after the tapering ends.

This is because the Fed Chair once again said he wants to see sustained above-target inflation and a broad-based recovery in the jobs market. At Jackson Hole, he sent out a reminder about the 6 million jobs that are still lost since the pandemic, as well as reiterating his belief that the inflation surges may be “transitory”.

That message was heeded by the markets. After Powell’s speech, markets lowered their expectations for a November 2022 US rate hike from 53% to 40.5%. However, they still are forecasting a greater-than-even chance (76.5%) of a pre-Christmas rate hike in December 2022.

And this is where Friday’s jobs report comes in.

Markets are currently expected a figure of 750,000 jobs added last month, which is lower than the June and July figures that were above 900k.

USD bears could breathe a sigh of relief on signs of moderating jobs growth and a stagnant unemployment rate, as those should mean a longer runway before the US interest rate hike. And given the persistent threat of the Delta variant’s spread through the world’s largest economy, that could delay workers’ return to jobs. If this Friday’s jobs data indeed prove to be subdued, that might lower the chances of a sooner-than-later Fed rate hike, while preventing the greenback from surging higher in the interim.

usd_indexdaily_15

Oil markets await OPEC+ decision

Recall that back in July, OPEC+ agreed to raise output by 400k barrels per day (bpd) starting in August, accompanied by subsequent 400k bpd hikes each ensuing month.

However, since that July decision, the Delta variant’s resurgence in major economies has forced lockdowns once more in countries such as China, Australia, and New Zealand. Hence, it remains to be seen how OPEC+ takes into account these demand-side risks, while ensuring members can claim enough market share to keep them satisfied.

Although oil markets are still expected to tighten through year-end, one doesn’t need to be reminded about how swiftly the Delta variant can alter that outlook.

Should OPEC+ press ahead with its intended supply hikes, that could signal confidence that global demand is robust enough to absorb that incoming supply. Still, if traders and investors don’t share that same optimism, should OPEC+ leave its supply hike plans unchanged, that could prompt Brent oil to unwind recent gains and falter back into the sub-$70/bbl region once more.

Oil markets will also be closely monitoring the impact of Hurricane Ida on US oil supply infrastructure. Signs of tightening supplies, depending on the duration, could spur oil prices higher despite Brent being resisted at its 50-day simple moving average at the time of writing.

brentdaily_74

For a look at all of today’s economic events, check out our economic calendar.

Written by Han Tan, Market Analyst at FXTM

For more information, please visit: FXTM

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

New Zealand Dollar end The Bearish Correction

The NZDUSD is in a false bearish breakout from the falling wedge pattern. That is possibly a very nice buying opportunity.

The GBPNZD is testing the combination of three important dynamic supports. A breakout can be an amazing sell signal.

The EURJPY broke the upper line of the wedge and is aiming higher with a buy signal.

The GBPCAD is in a giant symmetric triangle on the weekly chart. We will probably have to wait a long time till until the breakout but it will most probably be worth it.

The NZDJPY is in a flag formation. A breakout of its upper line will bring the positive sentiment back.

The GBPJPY is forming a head and shoulders pattern inside of the symmetric triangle pattern. A breakout of the lower line (and the neckline at the same time) can be a good bearish signal and a breakout to the upside can be a signal to go long.

For a look at all of today’s economic events, check out our economic calendar.

EUR/JPY Bearish Hints at Resistance

EUR/JPY is trying to push higher but 1-2-3 is holding it. the 130.45 zone could move the price lower towards 130.27 and 130.05. However if the price moves above 130.55, a bullish breakout might occur going towards 130.80 and 131.00. Watch the price action at the POC zone for further cues.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

EUR/JPY Surges as Yen Weakens

The POC is a bouncing zone. 129.65-75 where buyers are. Look for a trend line break and continuation of the move. Targets are 130.42, 130.58 and potentially 131.05. Only if the price breaks below 129.65 we could see a move down which will be a sign of Yen strength.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad