The Yen fall across all major currencies this morning as equities in Asia rally with global optimism buoyed by positive comments from U.S. Uncle Ben increased investors' risk appetite. The Japanese currency tumbled to new multi-month lows against its major counterparts. Last week the yen slid to a five- month low against the dollar and the euro.
Last week MSCI Index of regional shares advanced 1.6 percent and the Nikkei rose 2.3 percent. The VIX Index, a measure of market volatility known as Wall Street’s “fear gauge,” closed below 40 on April 3, the first time since January, indicating traders are becoming more confident about stock market advances. A receding worries about risk-aversion and emerging euphoria, drive people sentiment toward buying back shares and higher-yielding currencies.
Uncle Ben said last week that he will use all tools available to him to stabilise financial markets and remarked that programs enacted by the Federal Reserve to unfreeze the credit markets are working. The positive comments from Bernanke eclipsed the negative data from the U.S. on Friday, with a greater-than-expected fall in non-farm payrolls in March took unemployment rate to a 25-year high of 8.5%.
The US Department of Labor said on Friday that non-farm payroll employment fell by 663,000 jobs in March following an unrevised decrease of 651,000 jobs in February. The drop in jobs came roughly in line with economists' expectations of a decrease of 658,000 levels. With the continued decrease in jobs, the unemployment rate rose to 8.5 percent in March from 8.1 percent in the previous month, in line with expectations. More than 5 million American have lost their jobs since the U.S. economy slipped into recession in December 2007.
Separately, the Institute for Supply Management released its report on activity in the service sector for March, showing that its index of activity in the sector unexpectedly fell to 40.8 in March from 41.6 in February, with a reading below 50 indicating a contraction in the sector.
This morning, the Nikkei opened higher and is trading in positive territory, led by automakers. It opened strongly at 8,857 compared to its previous close of 8,750.
Technically, USDJPY based on 5 MTF chart is expected to be bullish. since the Australian opened, USD has been above the daily R1 and has been tagging the upper BB with the middle BB acted as support. I am expecting prices to reach R2 during the Asian session.
At 3:15 (0:15 GMT), 15 minutes after Tokyo stock Market opened, USDJPY touched the upper BB with a doji and a possibility of evening doji star. A short position was taken with a target to the opening price( the orange line).
My second scalp entry is long after prices touched the opening price and the middle BB(20 period ma) with a hemmer candle that occurred at 3:35(0:35 GMT). My traget is the upper BB and the daily R2.
