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Yen Rallies on Geopolitical Risk28 February 2019 by Dave Evans

Morning Report: 07.00 London

The Japanese yen is in demand this morning as geopolitical risk factors rise. China-USA trade talks are stalling, while India-Pakistan tensions are rising. Brexit chatter is for the moment quiet, but there are growing concerns over the impact of a substantial delay.

The USD/JPY is back below 111.00, while the EUR/JPY is struggling to hold the 126.00 level. The AUD/JPY is lower for the third straight day, but holding the 79.00 level. Even the buoyant GBP/JPY is struggling after failing to push through the 148.00 level yesterday.

The dollar index continues to recover after heavy selling in the early part of the week.

The GBP/USD is lower, but holding the 1.3300 level after breaking through yesterday. The EUR/USD is struggling, slipping lower for the second straight day after failing to break the 1.1400 level. The EUR/GBP is making small gains after breaking below 0.8550 yesterday.

The AUD/USD is experiencing follow-on selling after failing to break the 0.7200 level.

The USD/CAD is on the rise and remains largely rangebound throughout 2019, with an advantage to the US dollar. The USD/CHF is breaking below the parity line as the Swiss franc takes on interest from traders seeking safe havens. The EUR/CHF has slumped, but the 1.1350 level remains a key support line.

Coming up today

FOMC member Clarida speaks at 13.00.

At 13.30, we have Canadian current account and RMPI data.

US advance GDP is also at 13.30.

Chicago PMI is released at 14.45.

Trade Idea

The USD/CHF is dropping below the parity line, but the 1.0000 has acted as a price magnet in recent weeks, meaning the price may not travel much further below the. There is a strong chance that the USD/CHF will remain within its current price range.

Yen Rallies on Geopolitical Risk

A good way to play this is an In/Out trade predicting that the USD/CHF will close between a high of 1.0025 and a low of 0.9925 in 14 days for a potential return of 106%.

Yen Rallies on Geopolitical Risk