Wednesday, May 17, 2017 5.11 PM / Meristem
Source: MERI FX
USD: The Dollar declined against most of its currency counterparts after a series of events; Trump’s firing of FBI Director, James Comey, last week Friday’s global cyber-attack and last weekend’s successful test of a ballistic missile by North Korea. The US currency also declined after two officials accused President Trump of revealing highly classified information to Russia’s foreign minister about a planned Islamic State operation.
Furthermore, Trump was also said to have requested former FBI Director James Comey to end his probe on former national security adviser Michael Flynn. We expect these issues to exert continued pressure on the dollar, as Trump’s Republican Party support diminishes thereby delaying the implementation of his economic agenda.
JPY: The Japanese Yen has appreciated against the Dollar due to the political uncertainties in the U.S. and its position as a safe haven currency. One thing to look out for is the Gross Domestic Product (GDP) release today (previous 1.2%, forecast 1.8%). This may influence the price movement of USD/JPY.
The pair recently broke above its 88 days channel but could not continue higher due to political issues stated above. The pair is approaching a broken resistance level with rising bearish momentum. To an investment decision, certain scenarios need to occur:
· If the pair breaks below the 111.85 level and pulls back to the level with a bearish candlestick confirmation, we advise a “SELL”
· Stop loss at the high of the bearish candlestick
· Price target at 108.43
· Second price target at 105.36
Note: A buy scenario is advisable only when the political issues in the U.S reduce.
CLICK HERE TO REGISTER
MERI FX Team
1. FOREX: CBN approves $100m for sale at SMIS