With the likelihood of USD Fed hiking rates than BOJ does, the yield difference between USD and JPY will widen. This will only lead to higher USDJPY going forward
USD 2 trillion stimulus
worsening cases compared to Eurozone
increasing jobless rates
non stop money printing could mean one thing which is the demise of USD
The damage to the US economy is unprecedented.
So use this bear market bounce to sell again.
in the past 10 years, the 200W MA has held but we have broken it last week and now look to retest it again.
if the break holds, continue to sell with stop above it.
the COVID 19 is spreading wildly in Italy which is Europe's 3rd largest economy.
we are seeing increasing cases in France which is the 2nd largest economy.
Fed has cut 50bps this week and resulted in USD sell-off.
ECB may also do something drastic and perhaps the EUR selling may start.
Watch out for 1.1240-1.1250 resistance.
well everyday we are counting the number of deaths in Wuhan, China.
So long this thing does not blow up.
in the long run, we still need crude oil to run our industries and cars and so on.
if this monthly trendline holds, could start to go long
if the market sell off continue, VIX could continue to spike up but up to a certain point.
markets ought to recover and volatility to taper off once the virus episode blows over.
rather than go long the market which could still be choppy, a way to go long is to short VIX.
based on regression analysis, VIX is likely not go beyond 22
looks like USDJPY could be rolling over unless we see a firm close above 110 which is key psychological handle.
with the China virus potentially spreading, we could see risk come off and JPY could rally as such.
so stay watch on this handle and get ready to short.
In March 2003, Hang Seng dropped 22% when SARS hit HK and start to spread.
A 4th death has occurred and China said it can be spread from person to person.
So be defensive and cover your longs.
USDSGD could be following the pattern seen at start of 2018 and 2019 and could repeat in 2020.
in past 2 years, USDSGD tend to base at year end and go sideways in Q1 before rallying higher over Q2 onwards to Q3..
so if similar pattern is followed, we could see sideways USDSGD in Q1 2020 and higher USDSGD in 2020 towards 1.3650 first and then 1.38-1.39 potentially.
EUR has fallen against GBP since August and looks to be oversold on the monthly.
it is sitting above near the 50 month MA support 0.8540.
Given the optimism on Brexit is more or less done and with elections looming in December for UK, it is probably time to take cover and go long EUR and short Sterling.
EUR has rallied much against JPY and now is heading towards a upward sloping trend line which is acting as resistance.
looks good to sell here with TP around 119.8 or lower
Now October is on us and with SPX still at a lofty level near 3000, we could be in for some under performance in a month that is notorious for market selling.
I am not surprised if SPX drops to 2840 from here
EURUSD is enjoying life from both EURGBP and trade war.
But one cannot deny EURO is slowing down drastically too.
so my guess is still short EURUSD towards 1.1020 and upside resistance 1.1225 is my upside watch if my view is wrong.
