Yen Still Topping Nikkei Performance
Nikkei up after continued weakness in the yen maintain investor optimism about the outlook for Japanese exporters’ earnings. USDJPY is now trading at 117.80; 4 weeks away from the strongest level achieved 115.85 last weekend. If a weaker yen may continue then this can help improve the competitiveness of Japanese exporters in the international market. Nikkei futures rose 1.03% and is now trading at 17200.
Fairly positive external sentiment as widespread expectations that central banks in developed countries will strive to maintain the momentum of economic growth in the world. Last week, the Swiss central bank has imposed a negative interest rate policy and is also followed by the Danish central bank yesterday also lowered deposit rates be -0.2%. Markets also expect the BoJ will provide further monetary easing signals when finalizing the meeting tomorrow and the ECB will launch QE policy when ending the meeting on January 22.
Energy sector and other related industries will come back to get attention as world oil prices continue to look hard recovery momentum yesterday. World oil prices are now trading at $ 47.84; not so far from the low level of 5 years $ 44.18 achieved by January 13 last. Investors are worried enough sharp decline in oil prices in the last 6 months will undermine earnings outlook for companies engaged in the energy sector and other related industries.
From the corporate sector, Fujitsu shares rallied 2.8% as the release of a report that Tatsuya Tanaka’s Senior Vice President shall become President; Tanaka described as a negotiator who love to meet with his client. Daicel shares rose 2.4% after the Nikkei reported the company will benefit from the withdrawal of a mass air bag by competitors Takata. Itochu shares fell 1.3% after the release of a report that the company and its partners in Thailand will invest $ 8.5 billion in the company of China Citic Group.
Technically, the index on the trading session today, Tuesday (20/01) likely to weaken, test negative trends, the impact of Wall Street. At the M15 chart bearish engulfing formation provides opportunities for the index to move downside. However, the volume tends to rise, early indications bullish index. In addition, RSI, the M15 chart, are oversold, signaling upside.
It is estimated, the index test the first support level that is 17200 and 17140. If it fails in 17250, we then estimated the index tends to retest the resistance level that is 17 280 and continued until the possibility of being in the 17330 area.
Euro Pressured By ECB Meeting
Euro under pressure on Tuesday as investors positioned for opportunities easing measures by the European Central Bank as soon as this week, while the dollar rose against the yen the dollar after a holiday in the US. Sources said that the ECB will probably adopt a combined approach that might include the purchase of bonds and share the risk with the rest of the euro zone countries, while the central bank purchases of bonds each. The program may be limited by the size of 500 billion euros (579.95 billion dollars).
“We expect the ECB will announce the expansion of its asset purchase program for up to include European government bonds at a meeting on 22 January and we recommend to keep it short on EUR / USD and EUR / GBP ahead of the meeting,” according to Barclays strategic. Elections in Greece on Sunday, with the anti-bailout Syriza party led the polls, also adds to the uncertainty of the euro zone.
In the Asian session, China will release fourth-quarter economic growth data. The data were worse than expected will hit investor risk sentiment and boosted safe-haven currencies the Japanese yen. Bank of Japan also will launch two daily policy meeting on Tuesday. Diperkriakan BOJ will cut its forecast for inflation for the next fiscal year be down 1.5% from 1.7% earlier in October.
With large-scale asset purchases by the BOJ yan gsudah Japanese government bond yields pushed into negative territory, partly BOJ members want to refrain from further loosen policy, but still there may be a surprise move.
Technically, the trading session today, Tuesday (20/01), the pair Euro-dollar likely to move in the negative trend.
The weakening of the Euro mainly expected soon reexamine the minimum support at 1.1535 and 1.1470 maximum. Meanwhile, if the Euro is able to break and hold above 1.1586, then the other alternative scenario that Euro chance to test resistance in 1.1610 and 1.1650 area.
Gold Weakens, But Close Higher Level 4 Months
Gold moved lower on Monday, yesterday as investors cashed in some of their gains from the strengthening of weeks ago, but prices are still moving near four-month highs as the volatility in the broader market still provide support to gold’s appeal as a haven from risk assets .
Volatile market after the unexpected release of the policy of the Swiss National Bank which removes restrictions on the franc exchange rate last week has given a strong bid for gold, which is often considered as an alternative asset for risky assets.
The policy was sent gold prices to their highest level since September at $ 1,218.50 on Friday. While gold fell on Monday, traders said that gold is still getting support near peak levels as markets braced for further volatility in the critical weeks in the Euro zone.
Factors that still provide support for gold is pretty high expectations that the European Central Bank will launch a stimulus package at its policy meeting on Thursday, in addition to the anti-bailout party Syiriza which still maintains his lead in the survey ahead of the Greek elections.
Spot gold prices fell by 0.3% at $ 1,276.10 / onz, while US gold futures for February was down 70 cents at $ 1,276.20 / onz.
Afshin Nabavi, head of trading at MKS said that currently there is a bit of profit taking, and there is little physical sales, but not too big, too, this is the first time that we see at this level for the time being, so those little excited .
But overall, the gold was on track to reach the level of $ 1.300, and if it reaches the area, we will see that gold will move higher again. With events lately, and it seems that Europe might start quantitative easing on Thursday, gold has again become a safe haven asset.
Technically, gold in today’s trading session on Tuesday (20/01) potentially bearish, tested negative trend back, but prone to reversal. RSI indicator tends to re-test support channel and towards the oversold area, but Bollinger Bands that began to widen, thus giving impetus to the gold to the upside.
It is estimated that the gold price immediately prior to test support in the area of at least 1273.33 and re-test the maximum level of 1270.73. However, if the price of gold is able to break and hold above 1276.90, the estimated price of gold could potentially test the 1277.40 and 1279.72 resistance.
