Next week, the North Korea issue and the market may both start to feel like they’re reaching a climax.
Dollar-Yen seemed set to close in the 108 yen range over the weekend,
but after midnight Japan time, amid reports that one of Trump’s closest aides,
chief strategist Steve Bannon, was dismissed, concerns about the Trump administration eased somewhat.
Markets reacted as the US stock market fell less, and the currency market saw the dollar/yen move from the 108.60s
to the mid-109s on the upside.
Although concerns about the Trump administration remain, with Bannon’s dismissal there is a possibility that the Trump administration may, for now,
find some stability, and investors may focus on the North Korea issue.
Next week,ECB President Mario Draghi is scheduled to speak at Jackson Hole, and this week reports indicated
that there would be no new communication, but before any exit strategy, the near-term euro appreciation concerns
may be emphasized, so watch for a pullback timing in the euro that recently reached a high.
On the other hand, dollar-yen is still in a battle near its yearly lows, and at one point after the North Korea issue subsided, it Buyers returned up to near 111, but
the initial bounce was knocked down again to the 109 range.
However, since Bannon’s dismissal was reported, the weekend closed in the 108s, avoiding a dip below that level,
and with the Tokyo market reopening after the Obon holidays next week, there is still some optimism, with near-term lows likely supported,
so if 111 is broken, it could shift to a double-bottom scenario, possibly bringing a move in the 109–111 range
in terms of price moves.
Meanwhile, the pound/yen has fallen below 140 again, though it briefly breached it over the weekend, ending back in the 140s
for the year, the pound/yen appears to have been oscillating around the 140 level, with near-term support reached,
so from next week with the Tokyo participants entering the market, the dollar/yen has near-term support,
and if euro-dollar pullback is added on top,
(if the daily close breaks below 1.17 on a daily basis, a pullback becomes possible)
it could connect to the 140 level support for the pound/yen.
From the market compass
★Pound-yen approaches a crucial point again! Will it bounce? Is this year’s low?
★In the new year, yen selling and stock strength acceleration? Pound-yen urgent article! A genuine decline or a pullback?
On North Korea, it has officially been announced that US-ROK joint military exercises will be conducted from the 21st to the 31st of this month
and about 17,500 personnel will participate, including around 3,000 other than US forces stationed in Korea; under UN command also
Australia, Canada, Colombia, Denmark, New Zealand, the Netherlands, and the United Kingdom will participate,
with a command post exercise to simulate military operations on a map, drawing attention to North Korea’s response.
Previous article
★Will August ignite a beacon of counterattack?!
Currently, dollar-yen is moving under 110, with a strong chance of a lower shadow on the monthly chart in late August!
Next week, North Korea issues and market sentiment may become tightly wound, perhaps.
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