The USD/JPY currency pair made a more decisive bullish breakout to a new 9-month high price as risk sentiment continues to improve, sending stock markets higher.
- The USD/JPY currency pair seems to have made a more decisive bullish breakout, well above ¥154.50, pushing higher on improving risk sentiment, which has caused funds to flow out of the safe-haven Japanese Yen and into the US Dollar. Trend traders will already be long of this currency pair, and some traders will be looking for a daily (New York) close at a new multi-month high to bring a long trade entry here. Since today's Tokyo open, the best performing major currency has been the Canadian Dollar, while the Japanese Yen has been the weakest.
- Stock markets mostly closed higher yesterday, and are rising again during today's Asian session, with major US indices such as the S&P 500 Index and the NASDAQ 100 Index regaining recently lost ground. The S&P 500 Index has outperformed the NASDAQ 100 and is again within sight of its all-time high above 6,900.
- The general improvement in risk sentiment is mostly due to an increased expectation that the US government shutdown will end today, before Thursday. If so, this will allow the release of highly important US CPI (inflation) data tomorrow, which could give risk sentiment a further boost.
- The CME FedWatch tool shows a small increased in the market's perception of the chance of a rate cut at the Fed's December 10 meeting, from 63% to 65%.
- Bitcoin is showing a bearish sign: while other risky assets are advancing, Bitcoin has fallen back to trade around $103,000 after failing to breakout beyond the key resistance level at $106,403 yesterday. So, it does not look like this is a good time to be long of Bitcoin.
- There are no high-imact economic data releases scheduled for today, but news of an end to the government shutdown may come and could well have a strong impact
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