XAUUSD could add to its gains versus the greenback trying for heading to 1700$ per ounce as the reached deal for averting the fiscal cliff in US could put pressure on the US dollar as the investors looked again for risky assets pushing up the US blue ships in the first session of the year supporting the gold in the same time as there was no withdrawing liquidity out from the economy for restoring the financial position in US showing inflation upside risks offering defensive place for the greenback again.
From another side, the deal can help the demand for commodities generally not just the precious metals as the demand for manufacturing is not to abate too thanks to this reached deal which supported the commodities currencies versus the greenback driving the Aussie to be traded around 1.05 psychological level before some profit taken pressure could help this last currency during the US session.
While USDJPY is still creeping finding a place now above 87 supported by the deal and the cheeriness which spreaded out in the markets after it driving the investors to look for selling the Japanese yen in the benefits of the higher yielding currencies for loading risks and here I can remind you of the last report which said last week that
Anyway now, USDJPY can be well-supported further in the case of having a deal in US can cause avoiding of the cliff and tending back to risky positions but in the same time the exposure to the profit taken wave is hard to be avoidable in the case of falling in it with no deal.
And now, I can say that USDJPY can be exposed to profit taken after its recent rally but with no clear reasons to underpin the profit taken, it can be short lived as the Japanese yen is expected to still depressed by the expectations of having more easing steps and adding to BOJ which has injected last month another 10 trillions yen into its assets purchasing plan to worth 101 trillions currently for stimulating the economy and fighting the deflation while Japanese national consumer prices index is still in the negative territory since last June despite targeting 1% over the short term and 2% over the long term yearly by BOJ last February showing that there can be distance to the new LDP government and BOJ to press down the Japanese yen by reaching these required rates
Continue Reading Below
God willing, USDJPY can face now in its ascending resisting levels at 88.1, 89.14, 90 psychological level, 92.87 and 94.97 which has been its formed top on the 4th of may 2010 while easing back from here can be met by supporting levels at 86.53, 85.46, 85, 83.85, 83.23, 82.1, 81.68, 80.87, 80 psychological level, 79.06, 77.93 and 77.10 whereas it’s formed its bottom on 13th September to the current levels
FX Market Strategist
Walid Salah El Din
Mob: +20 12 2465 9143
This report has been prepared by FX Recommends. For more, go to FX Recommends