Markets On Tenterhooks As G20 Kicks Off | USD/JPY, CHF/JPY
Matt Simpson June 28, 2019 3:20 AM
The meetings have kicked-off and volatility remains capped whilst traders await potentially market-moving headlines and trade developments. We take a look at a couple of JPY pairs around the event.
Markets were given a gentle lift in sprits yesterday on announcement that the US and China had agreed to a trade truce ahead of the G20 talks. And today, Trump has since agreed to no preconditions for his meeting with Xi. Whilst these developments do little to confirm talks will ultimately become a success, they’re a step in the right direction and a much softer approach than Trump has known to take ahead of other, key events. That said, Trump has lined up no fewer than nine bilateral meetings for the event, most likely in a bid to pile on the pressure on Xi for a more favourable meeting tomorrow.
23:30 GMT Japanese Prime Minister Shinzo Abe
00:15 GMT Bilateral meeting with Abe and Indian Prime Minister Narendra Modi
00:35 GMT Modi
0115 GMT German Chancellor Angela Merkel
0500 GMT Russian President Vladimir Putin
06:30 GMT Brazilian President Jair Bolsonaro
23:15 GMT Saudi Crown Prince Mohammed bin Salman
02:30 GMT Chinese President Xi Jinping
04:05 GMT Turkish President Tayyip Erdogan
For now, markets are on tenterhooks as they await developments of the meeting. However, it’s possible we may have to wait until markets are closed for the weekend before the more meaningful headlines hit the screens, which could leave markets vulnerable to gaps on Monday. But with markets focussed on the success or failure of the Trump-Xi talks, it could have a binary effect on Monday mornings open and subsequent moves. In short, successful talks could see less demand for safe havens (JPY, CHF, gold, bonds etc) and demand for riskier assets (Equities, commodity FX - AUD, NZD, CAD) and the reverse could be true if deemed a failure.
Technically USD/JPY remains in a downtrend, although its seen a retracement from its lows.
- A bearish pinbar has respected the 20-day eMA and 61.8% Fibonacci level, and bearish swing traders could look to fade into moved around this resistance area.
- However, during its decline it’s the first retracement that’s surpassed the 50% level to suggest a subtle shift in sentiment at the lows.
- Regardless, we’d be interested in short positions if the bearish structure holds below the 78.6% Fibonacci level.
- This would assume G20 talks see demand for JPY crosses ahead of the weekend or after Monday’s open.
If we were to seek a bullish scenario around G20 talks, CHF/JPY could make an interesting setup, even if less of an obvious choice.
- The cross has produced two higher lows above the 2017 low and now broken out of its 230 pip range.
- Moreover, price action is building a base above the breakout level and compressing near its highs.
- A direct above the highs assumes trend continuation and reaffirms its position in a new range between the 110 – 112 area.
- A break back below key support takes it back within range and labels it a fakeout / bull trap.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.