Dollar-Yen Strength "A Chance to Sell Now"

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The Dollar-Yen exchange rates is quoted at 104.55 ahead of the weekend having fallen for four days in succession now. Expect further declines says analyst Richard Perry of Hantec Markets.

Another decisive negative session on Dollar/Yen has pulled the market clear below 105.10. This has opened a test of 104.15 in due course.

We see near term strength as a chance to sell now.

The downside break of the old 105.10/107.00 range implies around -190 pips which means 104.15 at least.

Furthermore, the old lows of the range, between 105.10/105.40 is now a sell zone.

There is more considerable resistance 105.75/106.00 but given the configuration of momentum and downside potential, we see a rally as unlikely to last long before selling pressure kicks in again.

Yesterday’s low of 104.50 is initial resistance.

The US dollar rally in the wake of the FOMC meeting seems to already have run out of steam.

Lacklustre US data yesterday (jobless claims slightly higher than expected, along with housing data marginally missing) helped to drag the dollar back.

The Fed may have upwardly revised its 2020 growth forecasts but it is now very much on a looser for longer path of monetary policy.

It points towards near term dollar strength still being a chance to sell. It is interesting that the Dollar Index continues to see rallies flounder in the resistance band between 93.50/94.00.

Subsequently, having repelled a potential dollar rebound, forex major pairs are consolidating once more this morning.

This can also be extended to the precious metals, where gold and silver have also found a basis of support again. Equities have a tinge of negative bias after the tech sector once more pulled Wall Street lower, but selling pressure appears to be limited this morning.

There are some marginally constructive noises coming out from the White House (Larry Kudlow) over the prospect of US fiscal support and a $1.5TR package.

This may add a supportive element to risk today, but agreement remains some way off. UK retail sales for August have come in fairly close to expectations early today, with little real impact on sterling.