Last week was a week with noticeable adjustment-type price movements.

I would like to summarize the impressive price movements and headlines.

The fundamental concern was likely the arrival of the second wave of COVID-19.

On Friday, after news that Gilead's trial drug showed favorable results, a noticeable rebound occurred as the New York session began.

As for the timing of the decline, it did not seem to be related to fundamental factors.

Last week was the Bond Auction Week, and from the start of the week there was a rise in bonds, in other words a decline in interest rates.

Before U.S. Treasuries were bought, equities led the way, causing the indices, especially the Dow, to fall first and bonds to rise.

The blue line shows the auction times for 3-year, 10-year, and 30-year maturities from left to right.

There is not much influence during Tokyo and London times, but during the New York session you can see indices being sold ahead of bond auctions.

Afterwards, across to London, there was a bit of selling and then a notable rebound.

This is the 10-year yield; similarly, it hit a low during London time and then rose.

In the process of rising, Gilead's announcement also came out, and bonds continued to be sold relentlessly.

From May onward, these two ranges have been moving within a range.

Currently it is very difficult to judge, and a lack of a clear trend across the market is one reason for the directionless interest rates.

Until one of them breaks decisively, there is no clear direction, and while not necessarily low in volatility, it will be challenging for swing traders and relatively easy for day traders.

As I wrote in the first article, near the around 25,400, I finally managed to take a long position safely, so I plan to hold it for a while.

It was also a 61.8% Fibonacci retracement, so if it is a pullback, it seems to be an appropriate place.

However, it does not seem likely to easily continue rising, so I think it may push down again to around 25,800, so I would refrain from high-leverage longs and wait for a proper pullback.

In terms of weekly movement, I think the market will continue to range, so a shorter-term approach may yield better performance.

Pound/Yen

The Pound/Yen market is taking on a head-and-shoulders-like shape.

The left shoulder’s pullback is a bit lacking, but likely the neckline will be around the upper edge of the descending channel that has been broken.

At the start of the week, with the right shoulder in mind, it would be good to place sell orders again.

Euro/Dollar

The Euro/Dollar also has a head-and-shoulders-like shape.

The neckline is around 1.26, perhaps?

A break of 1.135 looked like a false breakout and was pushed back.

European currencies tend to move in similar ways, so I think it would be prudent to watch and attempt a return sell as well.

Dollar/Yen

The Dollar/Yen pair has not fully broken through the downtrend line and still seems to have downside pressure.

With Tokyo opening, the dollar may rise somewhat due to the interbank market's funding in the morning, so I would like to monitor around the line.

Aussie/Yen

Last week was a week where my strategy paid off.

I mentioned selling near 75 yen, but the trend line has broken down quite smoothly and is heading lower.

I plan to break the lower edge of the channel and sell on rallies.

I would be grateful if it could drop to around 70–71 yen, but I will revise my daily analysis as needed.

7/12 Week Analysis