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MTrading Team • 2022-10-24

USDJPY seesaws on Japan meddling woes, cautious mood

USDJPY seesaws on Japan meddling woes, cautious mood

USDJPY outpaced a sluggish start to the key week on early Monday. On the same line was AUDUSD as fears surrounding China, Russia and North Korea drowned the risk-barometer pair.

The sour sentiment failed to underpin the US Treasury yields while allowing the US dollar to recover from a two-week low, which in turn drowned Antipodeans and prices of key commodities like gold and crude oil.

Alternatively, political optimism in the UK allowed GBPUSD to remain firmer and buck the trend whereas currencies from India and China appear least weak amid fears that the RBI and PBOC are bracing for one more intervention.

The lead cryptocurrencies buck the previous three-day winning streak while also paring the weekly gains amid mildly bid USD and mixed concerns surrounding BTCUSD and ETHUSD.

Following are the latest moves of the key assets:

  • Brent oil prints the first loss in three days, down 1.13% intraday near $92.80 at the latest.
  • Gold reverses from the one-week high to $1,649, down 0.50% on a day by the press time.
  • USD Index rebounds from a fortnight low, up 0.34% intraday to 112.25 as we write.
  • FTSE prints mild losses but Eurostoxx and DAX are both positive around 1.0% by the press time.
  • Wall Street closed with the biggest weekly gains since June, led by Dow Jones.
  • BTCUSD and ETHUSD are both on the bear’s radar while declining to $19,300 and $1,330 at the latest.
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Markets remain dicey but on the bear’s radar

Although a cautious mood prevailed across the board ahead of this week’s key central bank events, as well as the first readings of October PMIs, risk-aversion prevailed amid fears of recession and higher rates. Other than the pre-event anxiety, the geopolitical and coivd woes from China joined fears of nuclear war and the North-South Korea tussles to weigh on market sentiment.

With this, the US dollar pares Friday’s heavy losses, mainly incurred due to hopes of receding Fed rate hikes from 2023, but the recovery remains capped by the downbeat Treasury yields and the latest Fedspeak suggesting that the hawks are running out of steam.

Elsewhere, slightly optimistic British crypto regulations and an upbeat on-chain matrix failed to recall the BTCUSD buyers while ETHUSD also followed the suit.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq, EURUSD

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

PMIs are important for the day

After downbeat prints of PMIs from Australia, Japan managed to witness some welcome figures. Even so, Germany and EUR activity figures keep underpinning the US dollar’s safe-haven demand. It should be noted that China’s upbeat GDP and Industrial Production fail to challenge the USDCNY buyers despite offering intermediate relief.

Moving on, the UK and the US are up for conveying S&P Global PMIs for October and may help the respective currencies. However, multiple challenges to the risk sentiment could keep the USD ahead of everything, at least before the ECB.

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