JPY risking Japan’s market intervention

JPY remains weak in the FX market

JPY continued to weaken in the FX market against the USD, EUR and GBP, in a signal of a wider weakness of the Japanese currency. The weakening occurs despite BoJ hiking rates on Friday, and reports surfaced that Japanese authorities checked rates on Friday. Such checks tend to predate a possible market intervention operation, and given the steep rise of USD/JPY we may see Japan coming to the Yen’s rescue, once again.

US equities rally  on AI hopes

US equities enjoyed substantial support yesterday, with Meta’s AI agent, Muse, enhancing market expectations for increased demand of semiconductor chips. A potential easing of worries regarding the US tariffs and high oil prices and enhanced hopes for AI, tend to be supportive for US equities. On the flip side, worries for AI going rogue and the Fed’s hawkish intentions tend to weigh on US stock markets. 

Oil prices correct higher

Oil prices edged higher, ahead of potential negotiations between the US and Iran. Threats were exchange between the US and Iran over the weekend, yet US President Trump expressed his openness in meeting Iranian President Pezeshkian, while the Iranians set its conditions to re-enter negotiations, both easing market worries for an escalation of tensions in the region. 

Bitcoin rallies

Bitcoin’s price rallied yesterday, at some point even breaking the $86k threshold.  It should be noted that the crypto market is on the upside despite the US Senate failing to pass the Clarity Act. Yet the crypto market’s hopes about an easing of regulation tends to reside in the Trump-Xi meeting on Thursday at the White House.

Other highlights for today

Today we get the UK’s CBI orders figure for September and the Eurozone’s preliminary consumer confidence figure for September. In tomorrow’s Asian session, we note Australia’s preliminary services, composite and manufacturing PMI figures for September. On a monetary policy level, we note the speeches today by NY Fed President Williams, ECB Buch, Fed Vice Chair Jefferson and Richmond Fed President Barkin.

Charts to keep an eye out

USD/JPY continued to rise and during today’s Asian session tested the 157.50 (R1) resistance line. We intend to maintain a bullish outlook for the pair as long as the upward trendline guiding it remains intact. Yet, the RSI indicator remains near 50, implying a rather indecisive market, thus a stabilisation or an easing of the bullish tendencies is possible. Should the bulls remain in charge over the pair, we may see USD/JPY breaking the 157.50 (R1) line and start aiming for the 160.50 (R2) resistance level. Should the bears regain control over the pair, we may see USD/JPY initially breaking the prementioned upward trendline in a first signal that the upward motion has been interrupted and continue lower to break the 155.00 (S1) support line and start aiming for the 152.10 (S2) support level.

USD/JPY Daily Chart

Bitcoin’s price rallied yesterday at some point teasing the $86500 (R1) resistance level, before correcting lower. We maintain a bullish outlook for the crypto’s price as long as the upward trendline guiding it remains intact. At the same time we issue a warning for a  possible correction lower as the RSI indicator remains above the reading of 70, implying a possibly overcrowded long position. Should the bulls continue to push Bitcoin’s price higher, we expect the crypto’s price to break the 86500 (R1) resistance line, taking aim of the 90500 (R2) resistance level. Should the bears take over, we may see Bitcoin’s price breaking the prementioned upward trendline, in a first signal of an interruption of the crypto’s upward movement and continue lower by breaking the 81450 (S1) support line clearly, aiming for the 76800 (S2) support level.

BTC/USD Daily Chart

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