AUD/USD, USD/JPY forecast: Asian Open – Nov 20, 2023

Market Summary:

Wall Street held on to gains set early in the week but trade in small ranges near their multi-month highs. The question this week is whether there is enough juice in the tank to rally into Thanksgiving on Thursday, which tends to have been the case looking at stats over the past 36 years
The US dollar was the weakest forex major last week and fell against all of its major peers, as markets are once again convinced that the Fed have no more hikes up their sleeve following weaker-than-expected inflation figures
US bond yields continued to weaken which saw the 10-year yield fall to a 2-month low of 4.4%. Yet as it has fallen to trend support on the daily chart with a small doji on Friday, perhaps we’ll see some technical selling of bonds over the near-term which could be supportive of yields and the US dollar.
The Japanese yen was the strongest FX major and formed which saw USD/JPY form a 2-week bearish reversal pattern, which begs the question as to whether we’re going to see further weakness ahead.
With USD/CNH falling to a 3-month low, it could place upwards pressure on other APAC currencies such as the yen over the coming weeks
UK retail sales contracted -0.3% in October to bolster bets that the BOE will be the first major central bank to cut rates in 2024
It seems that no sooner had Bloomberg noted that crude oil had entered a technical bear market with a 20% fall, bulls rushed back to bid it higher. Time and time again I see this, prices move the opposite way as soon as ‘bull market’ and ‘bear market’ headlines hit the wire.
Whilst I still see the potential for it to fall to $70, perhaps a move towards its 200-day MA around $78 is in order first.
Gold’s rebound tapped the 1985 target, but Friday’s small gravestone doji hints at a probably swing high on the daily chart beneath the $2000 handle (bias is currently flat)

See how the S&P 500 has performed heading into Thanksgiving: Forward testing the S&P 500 around Thanksgiving

Events in focus (AEDT):

12:15 – PBoC loan prime rate
16:00 – ECB Lane speaks
18:00 – German PPI
21:00 – EU construction output

ASX 200 at a glance:

The ASX 200 formed a bullish engulfing week and reached our 7100 target before pulling back to 7050.
Thursday and Friday were down days, yet remained within Wednesday/s range and Friday’s lack of volatility suggests the ASX may be trying to form a swing low.
Like AUD/USD, is it trying to muster up the strength for its next leg higher?
From here, we’re looking for evidence of a swing low to form (perhaps a bullish engulfing candle or a bullish hammer on the 1-hour chart) to increase confidence it can retest and potentially break above last week’s high

AUD/USD technical analysis (daily chart):

The Australian dollar formed a bullish engulfing week and closed just beneath the 0.6522 resistance level, which suggests a breakout could be pending. A bullish engulfing day also formed on Friday which places support at 0.6450. The question now is how bulls can get involve. Entering around current levels could lead to a false break, so perhaps low volatility retracement within Friday’s range could appeal as it could increase the potential reward to risk ratio for an anticipated breakout, for a move towards the 66c handle near the 200-day EMA,

USD/JPY technical analysis (weekly chart):

“Tops are a process bottoms are an event” springs to mind when I look at the USD/JPY weekly chart. Whilst the trend is clearly bullish, there is a hesitancy to break above the 2022 intervention high, and the past four week has seen two shooting stars and a 2-bar reversal form (dark cloud cover). And with USD/CNH selling, hawkish headlines for BOJ resurfacing and the US dollar weakening, perhaps a move lower is the path of least resistance over the coming week for USD/JPY. A break beneath the 10-week EMA could mark such an event.

View the full economic calendar

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.