9 Jul 2015
USD/JPY bears in control in Greek and Chinese risk
FXStreet (Guatemala) - USD/JPY is currently trading with a high of and a low of
USD/JPY is starting Tokyo in recovery mode following a heavy downside act for the bears that took the major through key supports and psychological handles to the lowest levels since May.
USD/JPY price action
USD/JPY was falling through the 122 handle from yesterday's trade and the bearishness was picked up by Europeans through London on further heavy supply and over the US to finish off the job until support was founded on a weaker greenback and suspension of trading in stocks on just technical glitches, not like in China.
USD/JPY fundamentals
Besides Greece, China is now stepping up to the forefront of global economic problems that have potential disastrous affects. In respect of Greece, time will take its toll now. EU leaders have firmed up on Athens. They have a deadline to submit their intended action plan of new proposals,promised tomorrow/today. It is feared that if they do not accommodate the EU's rules and requirements, then a Grexit may come as a result and soon post the EU summit in Sunday.
Meanwhile, what about China? The stock market crash as been a symptom of the problems, and not the cause. There is a shift of change coming that is long overdue, and China has not adjusted to a new economic reliance of system.
A once export driven economy has more in the balance than just that these days. Investment and consumption are both a widening area of China's economic system, and has been for a number of years, while instead the Chinese government continued to pump the investment side of the engine, in areas such as the construction arena instead of shifting towards the build up of required infrastructure around consumption in fact. The property market started to slump and the government were looking for an alternative and this has resulted in a bubble in the investments of the stock market and a recently introduced margin debt system that the economy can no longer keep up with.
The PBoC is now left with a huge task, and cutting interest rates is one option that they have been exploiting to relieve the pressures, but as we know, interest rates can only go down so far and the ramifications of an economic collapse in China has disastrous implications for the US and global economy.
USD/JPY technically
The rise in the Yen on risk-off markets exposes the 5-month uptrend at 120.26, where we are not far off. However, beyond here there is plenty of support in the sideways and long term cannel from Feb's rally targeting 122 that was met with supply and forced into a 118.50/120.80 range.
USD/JPY is starting Tokyo in recovery mode following a heavy downside act for the bears that took the major through key supports and psychological handles to the lowest levels since May.
USD/JPY price action
USD/JPY was falling through the 122 handle from yesterday's trade and the bearishness was picked up by Europeans through London on further heavy supply and over the US to finish off the job until support was founded on a weaker greenback and suspension of trading in stocks on just technical glitches, not like in China.
USD/JPY fundamentals
Besides Greece, China is now stepping up to the forefront of global economic problems that have potential disastrous affects. In respect of Greece, time will take its toll now. EU leaders have firmed up on Athens. They have a deadline to submit their intended action plan of new proposals,promised tomorrow/today. It is feared that if they do not accommodate the EU's rules and requirements, then a Grexit may come as a result and soon post the EU summit in Sunday.
Meanwhile, what about China? The stock market crash as been a symptom of the problems, and not the cause. There is a shift of change coming that is long overdue, and China has not adjusted to a new economic reliance of system.
A once export driven economy has more in the balance than just that these days. Investment and consumption are both a widening area of China's economic system, and has been for a number of years, while instead the Chinese government continued to pump the investment side of the engine, in areas such as the construction arena instead of shifting towards the build up of required infrastructure around consumption in fact. The property market started to slump and the government were looking for an alternative and this has resulted in a bubble in the investments of the stock market and a recently introduced margin debt system that the economy can no longer keep up with.
The PBoC is now left with a huge task, and cutting interest rates is one option that they have been exploiting to relieve the pressures, but as we know, interest rates can only go down so far and the ramifications of an economic collapse in China has disastrous implications for the US and global economy.
USD/JPY technically
The rise in the Yen on risk-off markets exposes the 5-month uptrend at 120.26, where we are not far off. However, beyond here there is plenty of support in the sideways and long term cannel from Feb's rally targeting 122 that was met with supply and forced into a 118.50/120.80 range.