As expectations for the world’s post-pandemic recovery mount, hedge funds are the most bearish they have been about the Japanese Yen in more than two years.

According to data from the Commodity Futures Trading Commission (CFTC), futures and options speculators have added shorts to the JPY for three straight weeks after being long on the Japanese currency as recently as a month ago.

Leveraged funds increased net yen shorts to 48,510 contracts in the week through March 30, the most since January 2019, the CFTC data showed. Many asset managers have also trimmed their JPY long positions. “Yen selling is likely to largely stay intact until the U.S. economy strengthens to the point where markets expect the Federal Reserve to start tapering,” said Toshiya Yamauchi, chief manager for foreign-exchange margin trading at Ueda Harlow in Tokyo. “There’s still scope for more increases in net yen shorts.”

As mentioned in last week’s update, gold has touched the 1757 level and reversed. As long as the resistance at 1757 is respected, we expect the price to reach the 1704 and 1681 supports.

The Week Ahead:

USD

On Tuesday, the Consumer Price Index (CPI) data will be released. The data is expected to be at 1.6%. If the actual data is higher, we expect the USD to appreciate.

NZD

On Wednesday, the interest rate will be announced. The value is expected to be at 0.25%. If the actual value is higher, we expect the NZD to appreciate.

AUD

On Thursday, the unemployment rate will be announced. The value is expected to be at 5.7%. If the actual value is lower, we expect the AUD to appreciate.

US Indices

The Dow Jones has reached an all-time high of 33800. Chances are that the price could move towards 34000 soon.

GOLD & SILVER

Gold has touched the 1757 resistance and reversed. If the price tends to stay below 1757, we can see the price reaching the support levels of 1704 and 1681 soon.

Setups for this Week

EURUSD

Primary View:

  1. The immediate resistances are seen near 1.19246 and 1.19571
  2. The immediate support is seen near 1.18467
  3. The current price seems good for potential buyers
  4. Entry on pullback is also possible by keeping the stoploss below 1.18467
  5. The targets could be 1.19246 and 1.19571

Alternative View:

  1. If the price moves below 1.18467, we may see further downside

AUDUSD

Primary View:

  1. The immediate resistances are seen near 0.76739 and 0.77142
  2. The immediate support is seen near 0.75786
  3. The current price seems good for potential buyers
  4. Entry on pullback is also possible by keeping the stoploss below 0.75786
  5. The target could be 0.76739 and 0.77142

Alternative View:

  1. If the price moves below 0.75786, we may see further downside movement

GBPUSD

Primary View:

  1. The immediate resistances are seen near 1.38586 and 1.39364
  2. The immediate supports are seen near 1.36767 and 1.35464
  3. The current price seems good for potential sellers
  4. Entry on pullback is also possible by keeping the stoploss above 1.39364
  5. The targets are 1.36767 and 1.35464

Alternative View:

  1. If the price moves above 1.39364, we may see further upside movement
Share.

About Author

Mithun Girishan

Mithun Girishan is the founder of MMM (Mithun’s Money Market), a consulting firm providing quality training programs in capital markets. He is an investor, trader, coach and a continuous learner. In addition, Mithun provides consultation and mentorship to many retail investors and company directors across the globe for investments, trading and hedging their wealth in stocks and futures. His passion lies in exploring new avenues in financial markets as well as learning theoretical and practical economics and its application in daily lives. This has exposed him to a wide range of markets spanning from equity, commodity, forex, futures to options.

Comments are closed.