Political turmoil lead to US Index slump, JPY retraces
By: ACY May 18, 2017
Chart 1: USD/JPY Daily
The US Index dropped to its lowest level yesterday since November to 97.41 amid the political turmoil caused by Donald Trump who is facing the deepest crisis of his presidency. Trump fired FBI director James Comey as per comey states he was asked to stop investigating former National Security Adviser Michael Flynn. Furthermore, Trump disclosed sensitive intelligence to Russian officials. The turmoil has been blamed on Trump’s administration. Market participants are aware of the risk that Federal Reserve may stop their plan of rate hiking in June and after. The probe made by Bloomberg shows the chance of Fed rate-hike in June dropped to 60% from 80%. Japan released GDP (Q1) this morning which increased 2.2%, far more better that forecast of 1.7%. Japanese Yen may continue to be propped up as it drags on carry-trade interest. The risk appetite on global market will influence on dollar-yen exchange rate. Even Though Fed could deliver a 25-basis point rate-hike, the long-term outlook seems more negative than before. Based on USD/JPY 4-hour chart, the current CCI (14) is around -149 and the difference between double line MACD (12, 26, 9) is -0.3230.
Chart 2: USD/JPY 4-Hour
Near-term resistance R1.: 110.77 R2.: 110.52 Near-term support S1.: 111.34 S2.: 111.64 Recent Events(GMT+8): 18/5/2017 22:00 USD Leading Indicators 19/5/2017 21:15 USD Fed’s Bullard to Speak about U.S. Economy and Monetary Policy
