USDJPY moves lower on trade war concerns

GMTAuthor: Greg Michalowski

1

Stocks giving up some of the early gains

EU trade retaliation comments has the USDJPY moving lower. US pre-market gains are also giving up some of the earlier gains. The S&P is up abaou 7 points (vs 11 earlier). The Nasdaq is up 15 vs 30 earlier.  

Stocks giving up some of the early gains
Looking at the hourly chart, the pair is down testing the 200 hour MA  (green line) at 110.663.  THe low for the day reached 110.61. The Thursday low reached 110.558. 

The low for the week was in the first hour of trading on Monday at 110.418.. The high was on Wednesday at 110.943. The total range of 52 pips is the most narrow trading week since early January 2012 IF the range is not extended today.  Low volatility.  

Where we are right now is in the middle of the trading range.  The extremes seem miles away but they are only 25 pips away.  The 200 and 100 hour MAs are barometers for bulls and bears. Trade below and we could make a run to the downside (and get a range extension).  Hold here and start trading back above the 100 hour MA with momentum, and maybe there is more upside.  

Favoring the downside, is trade war concerns and US yields have also moved lower. The 10 year is down -3.2 bps after being down about -1 bp earlier this morning. 

Favorng the upside is BOJ Kuroda is just out with a Japanese press article saying BOJ would mull additional easing if economy loses momentum toward hitting price goal (which is not happening).  He has been trying to talk down the JPY this week. 

ForexLive

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Fri 22 Feb 2019 14:05:07 GMT

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EURUSD moves between 100 and 200 hour MAs

//az705044.vo.msecnd.net/20190222/2019-02-22_6-34-35.jpg Greg Michalowski
Fri 22 Feb 2019 13:45:21 GMT
Category: Technical Analysis
0
Stays in the 3 day choppy range though The EURUSD made a run below trend line support and the 100 hour MA (blue line) and extended down toward the low from yesterday and the rising 200 hour MA (green line).  
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EU prepares retaliation Bloomberg reports three names on a list of companies that will be hit with retaliatory tariffs: Xerox, Caterpillar and Samsonite. Obviously this was leaked to put a bit of pressure on the White House not to go through with the targets. Does it change anything? One argument is that the EU thinks it's going to be hit, so that's why it had the counterattack ready. I'd argue that they'd be negligent not to have a counterattack ready under any circumstances. In the bigger picture, it should have been expected that they would be ready to hit back.

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EU prepares retaliation Bloomberg reports three names on a list of companies that will be hit with retaliatory tariffs: Xerox, Caterpillar and Samsonite. Obviously this was leaked to put a bit of pressure on the White House not to go through with the targets. Does it change anything? One argument is that the EU thinks it's going to be hit, so that's why it had the counterattack ready. I'd argue that they'd be negligent not to have a counterattack ready under any circumstances. In the bigger picture, it should have been expected that they would be ready to hit back.
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//az705044.vo.msecnd.net/20190222/2019-02-22_6-02-11.jpg Greg Michalowski
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