Forex Today: Yen, Dollar Start Week Strongly

Adam Lemon

Unclear whether stock markets can maintain Friday’s bounce as Forex markets show risk-off flow into Japanese Yen & US Dollar.

  1. Forex markets are dominated by strength in the Japanese Yen and US Dollar, which tend to be the major safe haven currencies today. This suggests risk aversion still dominates sentiment. The weakest major currencies so far in this week’s trading are the commodity currencies, especially the NZD and the AUD.
  2. Stock markets are mostly consolidating or slightly higher today despite the S&P 500 index and the NASDAQ 100 index ending last week at 1-year low prices. The end of last week saw stocks make a firm bounce, but it is questionable whether this will continue, or markets will begin falling again quickly. The long-term trend in US stock markets is certainly bearish.
  3. The major cryptocurrencies seem to have survived a major technical scare last week in which they threatened to make massive declines in value after the price broke down below crucial long-term support. This suggests there may now be a longer-term bullish opportunity in the major cryptos.
  4. Bitcoin broke below crucial support at $28,800 and traded as low as $25,400 before recovering with a daily pin bar / bullish reversal to settle above the psychologically important $30k level.
  5. Ethereum broke below crucial support at $2,041 and traded as low as $1,700 before making a strong bullish recovery to settle above the old key resistance level at $2,048.
  6. Today will see Monetary Policy Report Hearings in the UK, with the Bank of England testifying before Parliament, and the release of Australian Monetary Policy Meeting Minutes by the RBA.
  7. Daily new coronavirus cases globally fell last week for the eighth consecutive week.
  8. It is estimated that 65.4% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 6.6% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
  9. Total confirmed new coronavirus cases worldwide stand at over 521.2 million with an average case fatality rate of 1.21%.
  10. The rate of new coronavirus infections appears to now be significantly increasing only in Australia Jamaica, Panama, USA, Portugal, South Africa, and Taiwan.
  11. The Chinese state is maintaining its “zero covid” strategy, and new cases have begun to fall. Recent lockdowns have caused economic disruption and damage, but Shanghai may now be close to lifting restrictions.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

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