October 23, 2016

Mtechtips MCX-SX JPYINR INTRADAY trading analysis 21-09-2016

MTECHTIPS The Japanese yen weakened sharply after the central bank unveiled policy changes on Wednesday that showed a sharp new effort to spur inflation.USD/JPY rebounded towards 102.69, up 0.97%, while JPYINR retraced from the high 66.48  traded at 65.46, down 0.565.The Bank of Japan unveiled complex changes to its policy framework by setting a target for long-term interest rates that retains a ¥80 trillion asset purchase plan, but in a drastically rejigged fashion as part of aims to change inflation expectations.Earlier, Japan reported a trade balance deficit of ¥19 billion for August, widely missing an expected surplus of ¥202 billion, with imports down 17.3%, just shy of the 17.8% drop seen, and exports slumping 9.6%, compared to a 4.8% decline year-on-year expected.JPYINR retraced from the day high 66.01 and settled at 65.85 levels almost flat.  On the EOD chart pair failed to break its 29 August 2016 high and formed a long bearish candle stick which is indicating for short term negative trend in JPYINR. Further, 65.75 will act as an immediate support and JPYINR would need to trade below 65.75 in order to test 65.40-65.00, else recovery may take place towards 66.10 and above. The U.S. dollar index strength against a trade-weighted basket of six major currencies and tested 96.25 jumped 0.29% after the BoJ announcement. A break above 96.30 is expect to extended dollar index gain and it may test 96.70-97.50 very soon. Further, The US Federal Reserve scheduled to deliver their latest decision in monetary policy today at 11.30pm.The US central bank is widely expected to hold interest rates unchanged at 0.25% to 0.50% and investors would focus on the statement as well as Chair Janet Ellen’s speech for clues on the timing of the central bank’s next interest rate increase. Weaker-than-expected US economic data has prompted investors to all but erase their bets that the Fed would raise rates on Wednesday. The Fed funds futures market has assigned implied probabilities of September and December rate hikes at 18%




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