Japanese Market sleeping for a coming Golden week, USDJPY vs N225

This year, Japanese people have the longest consecutive national holidays for 10 days, and it started today. Tokyo market will have been closed for next week and on Monday in another week after the next. While Japanese stock market is closed, Forex market is opened in the world and the price naturally moves in Japanese Golden week.

As many investors who look at Japanese market know, N225 and USDJPY are positively correlated though the correlation has been relatively lower than before. Still, compared with other markets, for example FTSE100 vs GBPUSD, CAC40 vs EURUSD or DAX vs EURUSD, the two indexes of N225 and USDJPY have always positive correlations for a reasonable time frame (e.g. 1 year).

The point of this Japan's holiday season is how N225 moves on the first business day after the Golden week, 7-May-2019. Let's have a look at the historical correlation between N225 vs USDJPY, whose correlation period is 250 points for each.

[USDJPY and N225 for last 5 years]

[250 days Correlation USDJPY vs N225]

The current correlation (250D) is at around 40%. Whatever this number is considered, it could anticipate N225 after the holidays follows the direction of USDJPY for next week. USDJPY's latest closing is at around 111.60. Japanese investors would hope the market not to be volatile drastically...

The one side correlation seems be particular in Japanese market, and it is not for some other markets. In European markets, the stock indexes and exchange rates are correlated actually, but the correlation moves in positive as well as negative territories.
Look at other examples in European markets, the below figures describe the correlation between FTSE100 vs GBPUSD.

[GBPUSD and FTSE100 for last 5 years]

[250 days Correlation GBPUSD vs FTSE100]

And the correlation between CAC40 vs EURUSD and DAX vs EURUSD. (Correlation figure only)

[250 days Correlation EURUSD vs CAC40 and DAX respectively]

Their latest correlations are positive, but the numbers are varied from time to time more than Japanese market. However, Europeans do not have such Golden week anyway...

Review of New Zealand Dollar for last 3 days

Having recently posted an article about NZD forecast, we review those forecasts of NZDCAD, NZDUSD and NZDJPY which were picked up.

Although some of them once downed further, NZD has reverted against the downward trend for the past two weeks. It proves nothing in fact as no one can predict the future market at 100% surely. For the traders and our App users, it encourages that better fitted analysis would lead to more precise forecast.
Figures of those three FXs in Forecast vs Realized market are described as below. NZDCAD had downed a little bit more sharply at the analysis, and it seemed to have less room to deepen further for last 3 days.

[NZDCAD Forecast vs Realized market]

NZDCAD Trend & Momentum on 23-Apr-2019

NZDCAD 23 to 26-Apr-2019 (TradingView)

[NZDUSD Forecast vs Realized market]

NZDUSD Trend & Momentum on 23-Apr-2019

NZDUSD 23 to 26-Apr-2019 (TradingView)

[NZDJPY Forecast vs Realized market]

NZDJPY Trend & Momentum on 23-Apr-2019

NZDJPY 23 to 26-Apr-2019 (TradingView)

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NZD reviving in a couple of weeks? Trend and Momentum on 23-Apr-2019

NZD has sharply fallen since the late of last month. Particularly, NZDUSD has been downed by about 3.5%, and NZDCAD by 3.8% respectively.
It might have been a tricky situation in the forex market in this April, not just only for NZD but also for CHF which experienced a worst month since 2017 according to Bloomberg.

[Bloomberg] Franc Set for Worst Month Since 2017 Means SNB ‘Sleeps Easier’
The franc is headed for its worst month in almost two years, bringing relief to Swiss policy makers seeking a weaker currency in their quest to revive inflation.

The currency has lost about 2.5 percent of its value against the euro this month, a depreciation not matched since July 2017. The drop is spurring a re-think among some analysts, who are looking to revise their currency forecasts given the collapse in market volatility that has failed to boost demand for haven currencies.

In the meantime, the Trend and Momentum signals indicate NZD could revive in a coming week. The signals against USD, CAD and JPY.

NZDUSD Trend and Momentum on 23-Apr-2019

NZDCAD Trend and Momentum on 23-Apr-2019

NZDJPY Trend and Momentum on 23-Apr-2019

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Brexit meaningful vote is soon 12-Mar-2019

After the Brexit negotiation between UK and EU yesterday, MPs are going to vote for Mrs.May's deal tonight.
In spite of the yesterday's agreement that the alternative arrangement for Irish backstop has to be made by December 2020, the agreement seems to be guaranteed from the legal perspective.
GBP once jumped at the yesterday's press conference, GBP dived today and GBPUSD now stays a little lower level before the press conference.

GBPUSD

If the deal is rejected tonight's vote, it is likely to vote if UK proceed with Hard Brexit or extend the Brexit date though the extension won't guarantee preventing from Hard Brexit. According to Mr.Juncker, the president of European Commission, there is no more room to negotiate. It implies the market could foresee Hard Brexit in case of rejection against Mrs.May's deal at tonight's vote.

It's worth to prepare for the possibility of Flash Clash tonight.

To check Forex trading signals, download Forex Signal by QROSS X.

USD downward trend in a coming week?

ECB's (dovish) decision shocked Forex market yesterday as their negative outlook to the European economy and geopolitical uncertainties over the world, such as Brexit, US-China trade war, ...

On the other hand, in short term horizon, USD have been relatively stronger for a last couple of week against major currencies JPY, CHF, AUD, NZD, GBP and EUR of course. Our trend and momentum signals indicate this bullish USD could get bounce back. In the next week, more stories about Brexit anticipated, the market could turn more negative mood. If it is, JPY or CHF which are traditionally safe asset in bearish market can be relatively stronger in the negative market.

Here are some of snapshots from the trend and momentum charts. Those are as of the beginning of today (UTC).

[GBPUSD Trend and Momentum 8-Mar-2019]

[AUDUSD Trend and Momentum 8-Mar-2019]

[EURUSD Trend and Momentum 8-Mar-2019]

EURUSD jumped after yesterday's ECB decision.




[NZDUSD Trend and Momentum 8-Mar-2019]

[USDCHF Trend and Momentum 8-Mar-2019]

[USDJPY Trend and Momentum 8-Mar-2019]

To check Forex trading signals, download Forex Signal by QROSS X.

Upcoming (Geo)political events (Brexit, Elections)

Brexit, US-NorthKorea summit, US-China trade war,... Several geopolitical uncertainties are surrounding the global economy. Here is just a list of upcoming events that could fluctuate the market in coming months. Some more events maybe added.

12-Mar-2019 The meaningful vote on Brexit deal (Downing Street insists)
 Guardian: Brexit meaningful vote will go ahead, says No 10, despite talks stalling
 >> Downing Street said the talks had been “difficult”, but stressed the vote would take place on Tuesday, as committed by May. If it is lost, MPs will vote on successive days on whether to block a no-deal Brexit and whether to extend the departure date.

29-Mar-2019 Brexit or the departure date extended?
>> After the meaningful vote on the Brexit deal, It will be clear whether Brexit happens on 29-Mar or is delayed.

9-Apr-2019 Israeli general election
>> The current PM Mr.Netanyahu is facing accusation of corruption, who have been PM since 2009. 

28-Apr-2019 Spanish general election
>> The right wing populist party Vox is rising while People's Party (PP) which is the current majority is likely to struggle. The centrist party Ciudadanos have not seemed to appeal enough to get majority at the parliament.

23 and 26-May-2019 European Parliament election
 The Economist: Volt wants to become the first pan-EU political party
 >> Volt, now has thousands of members across 30 countries (the eu28 plus Albania and Switzerland), and will run in the European Parliament elections next year. On October 27th about 450 delegates met in Amsterdam to approve the party’s programme, in a sea of youthful optimism and multilingual policy wonkery.

GBP against AUD, CAD and NZD in a few coming days. Follow the Brexit issues.

Once we have continuously picked up Trend and Momentum analysis from the list of FX. (You will find all of them on our website or Android app)
Those were just the examples which are expected to help users to understand how to see the Trend and Momentum indicators. Since our last update was long while ago, it seems be harder to find our articles in old days. It's probably reasonable to update some examples in the latest market now.

According to the update on the beginning of 22-Feb (UTC), the analysis result had indicated downward trend in GBPAUD, GBPCAD and GBPNZD. Those have downed by approx 0.40%, 0.60% and 0.55% respectively. While the momentary backlash would be likely, the Trend and Momentum still shows further room to downward.

[GBPAUD Trend and Momentum on 22-Feb-2019 UTC]

Last closed at 1.831.
Analyzed bottom by 1.80 (-1.69%).







[GBPCAD Trend and Momentum on 22-Feb-2019 UTC]

Last closed at 1.714.
Analyzed bottom by 1.70 (-0.82%).







[GBPNZD Trend and Momentum on 22-Feb-2019 UTC]

Last closed at 1.90.
Analyzed bottom by 1.88 (-1.05%).







It's just a reminder that GBP would be sensitive to Brexit issues including some speculations. A new Brexit deal is expected to be reached by 26-Feb next week. Otherwise, Theresa May would return to House of Common for further discussion with MPs.

[BBC] Brexit: What happens now?
If the EU were to agree to changes and MPs backed the adjusted deal, that would be a great result for Theresa May.

But senior EU politicians have said they will not reopen the legal text of the withdrawal agreement that they negotiated with the UK.

If MPs aren't satisfied with any adjusted deal put before them they could reject it again. Theresa May has also promised that even if she can't get the changes she's after, she would return to the House of Commons yet again on 27 February and allow MPs a further day of debate.


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