It seems that the high volatility will dominate the FX market during the Asian session. This will be the Bank of Japan’s decision on the basic interest rate and inflation data from the world’s second-largest economy – China. At 01:30 we also look at household spending data from Japan. As the decision of Bank Of Japan and the subsequent central banknote press conference is not scheduled for a specific hour, we expect investors not to pay much attention to household spending. At 03:30 China will be published data on the consumer price index, which most clearly shows the development of inflation in the country. Inflation is expected to rise, and as a market response, we can expect support for Asian stocks and a rise in AUD and NZD.
Technical look at the pair offering the best trading levels – H4 USD/JPY
A quick look at the Asian currencies shows that the best trader can look for the yen against the US dollar. The pair is in a medium-term downward trend and forms lower tops and lower bottoms. The price is at key levels of resistance – diagonal and horizontal, combined with 50SMA. In addition to the short idea are the indicators – Sequential counts 8 out of 9 for upward movement, while at the same time DeMarker 8 gives a signal for a decrease from a zone of over-purchases. Price Action: Bearing pin bar at resistance levels and a subsequent price test. It gives us a very good positioning position with the shortest possible stop. Short positions of current levels will be appropriate with SL at levels around 107.00.
Alternative Scenario: If the price goes above the baseline and stays successfully over it in several consecutive bars, the negative scenario will break and more likely to observe the pair’s growth.
Jr Trader Petar Milanov