Asian Stocks gaining, as US dollar Strengthening, yet how long bullish trends could hold on?
- Stock markets blooming, posting broad gains
- The Nikkei 225 reached 27-yr tops
- USD is broadly firmer and the USD invasion began today at GMT. 1AM (27.09.18) and it already secured around 80 pips daily highs, which was the best in last three months. Previous best was in June 14, 2018, when USD achieved a 140-pips gain in a day.
- While reporting the report, the USD was trading at 94.98.
Nikkei-225 hitting 27-yr high
It is Friday in Asia, and Nikkei 225 hits a 27-yr high. Quite obviously, the boost was gained from the bearish Japanese Yen, as the US dollar continues to generate more gains. However, as none has anticipated this peculiar USD move, the market is awaiting to see what is going to happen next. How long USD could hold on to this?
One of the key reasons behind the USD bullish momentum is the EUR weakness because of complication related to Italian budget. Besides, terrible Brexit move has played its part behind the downfall of GBP. Both of these in combination were playing crucial role for this USD uptrend.
As the Japanese Yen continues to fall, during the preparation of this report, the USD/JPY pair was residing at 113.42
USD/JPY trading chart
As USD gain is continuing, EUR is falling ruthlessly and GBP is barely holding up above the 1.3050 region. Though, it is expected that after the fixation of Italy budget issue, there might have been a reverse momentum. Besides, a bullish move for EUR is coming, as soon as Italy could fix up their budget issue. The Brexit move is going nowhere, so is the GBP and it is getting stuck above 1.3050 region. Right now, EURO downfall is the key to USD gain.
We are expecting a complete reversal of today’s loss by the end of next week, as the Italian Budget issue is going to be fixed. Right now, might have been the perfect time to start selling the USD. As far as Asian stocks are concerned, there is very little hope left for Japanese Yen, and we would not be too surprised, if Nikkei-225 breaks all-time highs.
Read more about Asian Stock Outlook here.
Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.