The JPY crosses has strengthened during since midday New York session.
Early Asian session, JPY strengthened further as Chinese stocks have been hit again. Yesterday’s cautious rhetoric from Chinese Premier Wen Jiabao seems to have hit a nerve there, the official warning “We must clearly see that the foundations of the economy are not stable, not solidified and not balanced. We cannot be blindly optimistic.”
China’s Construction Bank has come out and said excess cash in the banking system has led to asset bubbles. This has underscored concerns that lenders will rein in credit, which is helping undermine market confidence.
Meanwhile a senior government economist Lu Zhongyuan, vice head of the Development Research Centre, has told an economic forum today, that Chinese investors are over-reacting to talk of monetary policy fine-tuning. He feels the recent slide in stocks will be short-lived.
The heavy selling in EURJPY was arrested when the cross touched its weekly pivot point and on 1 HrTF chart, an morning doji star was formed indicating a reversal of trend.
On my 1 min trade, I entered at 6:13 GMT with all indies showed a buy signal. Entered at 134.10 with target price at 134.40 for 30 pips objective. Target reached at 6:41 GMT.
