Morning Preview: Top Trades for Wednesday
Rowan Crosby • 2 min read
Good morning traders.
Another day and another turn around in the USD. Overnight the US currency sprung back to life along with equity markets after word from the White House was that US President Donald Trump and his business friendly tax reform were making some progress. That helped spark markets on what has been a quiet week on the data front.
Attention is still firmly on the end of the week, when central bankers, policymakers and academics swarm on Jackson Hole and start trying to lay the foundations for the next installment of monetary policy. Until that time, I suspect we will continue to see back and forth action and muted follow through in FX and equity markets.
Trade Idea: Yen on the March
I know I sound like a broken record, because yesterday I spoke about how the overextended down move, had the potential to fall flat and retrace during Asian trade. Sure enough that appeared to be the case. This morning the momentum is to the upside in the USD/JPY as the US currency regains a foothold.
There’s been a little bit of a pop to the upside in early Asian trade and once again I’ll look to see if we can get any follow through and move towards the ever present 110 level.
We can’t predict the direction of early trade – especially given the back and forth nature of price that has been present this week. However we can capitalize on it and try and use our key levels, like 110, as profit targets. I would buy pullback as price is headed towards this level.
We have Japanese Manufacturing PMI due to be released today so keep an eye out for that number.
Key Levels to Watch