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Japanese yen slips, crude oil prices rise ahead of RBA decision as China prolongs closure


Japanese yen, USD / JPY, Russia, sanctions, Covid, China – talking points

  • Asia-Pacific markets ready for mixed open as EU and US consider new sanctions against Russia
  • The Reserve Bank of Australia (RBA)’s policy decision is in focus as today’s main event
  • USD / JPY rose overnight but prices plunged again at the 23.6% Fibonacci retracement

Tuesday’s Asia-Pacific Outlook

The Japanese yen moved lower in the early Asia-Pacific trade, prolonging weakness overnight as U.S. stocks moved higher. The Wall Street rally saw the tech-heavy Nasdaq100 Index (NDX) closed 2.01% higher. Twitter share rose more than 27% after Tesla CEO Elon Musk’s majority stake in the company was revealed in an SEC regulatory filing. Shares were mostly higher on Monday across APAC markets.

Ruwe oil won prizes after Saudi Arabia announced that it would increase prices for all its buyers. Meanwhile, a new round of Russian sanctions imposed by the European Union is raising concerns about supply. French President Emmanuel Macron has suggested that Russia’s oil and coal industries be targeted. The pressure on legislators to support new sanctions has increased after allegations of war crimes emerged from videos and background reports out the Ukrainian city of Bucha.

Asian stock markets could come under pressure today amid an extensive closure of China’s financial hub, Shanghai. The city has announced that the restriction that began last week, which would end today, would continue until further notice. Beijing has sent thousands of health workers to help carry out mass testing, but unconfirmed reports indicate that city residents are having trouble getting medical attention and help under the strict government-imposed restrictions.

The Reserve Bank of Australia’s rate decision will cross the lines at 04:30 GMT. Analysts expect the RBA to remain steady on its benchmark rate, but the accompanying policy statement as well as Governor Lowe’s comments will be under scrutiny. The Aussie Dollar could benefit from a hawkish surprise therebut recent strength may have set the Australian dollar up for disappointment.

USD / JPY Technical Forecast:

USD / JPY rose overnight, contributing to gains from the previous day when prices jumped from the 38.2% Fibonacci retracement level. Prices found resistance at the 23.6% Fib level for a second day. Prices can fluctuate between those two Fib levels in the short term. A break higher will expose the 2022 high to 125,108. Alternatively, a break below the 38.2% Fib would place the rising 20-day Simple Moving Average (SMA) for a test. Meanwhile, the MACD oscillator may soon show a bearish signal, with the MACD line tracking to cross below its signal line.

USD / JPY Daily Chart

Graph created with TradingView

— Written by Thomas Westwater, Analyst for techlives.in

To contact Thomas, use the comments section below or @FxWestwater on Twitter

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