USDJPY XAUUSD Market Insight

USD/JPY 

Japanese policymakers have tried to use rhetoric to boost yen and slow its decline without staging further intervention. The authorities will take appropriate action against excessive exchange rate fluctuations, indicating that direct intervention in foreign exchange markets is possible. The downward pressure on the yen largely stems from the differences in monetary policies between Japan and the United States. 

  We can see USD/JPY has reached the 149.00 on H4 chart. Currently, there are no signs that Japanese inflation will remain stable on a sustainable basis, so the Bank of Japan will patiently continue to implement monetary easing under the current framework, which is an obvious negative for the yen. Therefore, the buy limit tactic could be used, reasonable area is from 147.70 to 148.50, stop loss is compulsory.  

 XAU/USD

 Driven by strong US economic data and hawkish language from the FED, the 10-year U.S. Treasury yield rose more than 45 pips in September, exceeding 4.5% for the first time since 2007. If the economy is stronger than expected, the Fed will raise interest rates again this year and keep policy tight for longer. The US dollar approaches near its year-to-date peak and is seen as major factor to weaken gold. 

   We can see the gold tumbled after price tried to rebound on H4 chart. The price is running below 48 hours moving average and extending its downward trend. The FED hawkish outlook pushed US Treasury yields higher, paving the way for further weakness in gold. As a result, 1900 per ounce is vulnerable to be crossed, the sell limit would be employed between 1910 to 1917, stop loss is necessary.