Dollar-Yen Breaks Higher! ~October 4 Strategy, Points to Watch, and Event Schedule~

◎ Current positions and strategies

Short position on EUR/USD has added to the position. Yesterday, Euro-related news pushed it up temporarily, but it did not reach the stop and reversed. When there were remarks denying the rise, I re-added the portions that had been closed. Also, as I noted recently, since it broke below 1.1500 I have added more to the position. The next point is whether it will continue to fall toward the previous low. If it returns to 1.1500 again, I would consider partial profit-taking, but the base approach is long-term holding. The criteria for closing positions are based on when exact figures of the Italian budget proposal are reported in the news.

EUR/USD Daily chart

EUR/USD Hourly chart

CAD/JPY Long position is being held. It briefly updated its high but has been pulled back. The strategy, including the stop, remains as it was since yesterday.

CAD/JPY Daily chart

CAD/JPY Hourly chart

The Pound has risen as the party conference yesterday concluded successfully and Boris Johnson’s rebellion did not occur. I think a major peak for the Pound has been passed. I currently have no positions, but I plan to aim for a short-term long position on the Pound.

EUR/GBP Daily chart

EUR/GBP Hourly chart

Also, US long-term interest rates are rising. Inversely, Oceania currencies are falling. Considering the RBA statement and the prolonged US-China trade war, I have taken a short AUDUSD when it briefly fell below recent lows.AUDUSD Short.

I also considered a NZD/USD Short, but given the US-China trade war impact, I chose AUD/USD.

AUD/USD Hourly chart

AUD/USD Daily chart

◎ Today's focal points

1)Statements regarding the Italian budget

Comments and headlines about Italy’s budget cause the euro to swing. It seems to be increasingly viewed as a risk.

When it is viewed as a risk, it affects cross-yen and cross-franc pairs. For a while, focus on Italy is expected to be necessary.

Euro swings on Italy budget! What’s the problem? Explained

2)Rising US long-term rates and remarks from officials

The ADP employment data and ISM non-manufacturing index released yesterday were quite strong. In response, US long-term rates rose. USD/JPY has broken through 114 and is approaching 115. Powell’s testimony likely provided another boost. While the dollar strengthens, be mindful of President Trump’s currency-strong statements and scandals. Currency-strong concerns are common, but today’s headlines include allegations of tax evasion involving President Trump’s family.

Long before his presidency, reports suggested the family may have evaded taxes. President Trump has not filed a tax return as president. It will be important to see whether this scandal intensifies or settles.

◎ Today’s economic calendar

10/4 (Thursday)

10:30 AUD Trade Balance
22:15 USD Powell, Vice Chair of the Fed, remarks22:30 EUR Novak, President of the Austrian Central Bank remarks23:00 CAD Ivey Purchasing Managers Index
22:30 EUR Novak, President of the Austrian Central Bank remarks
23:00 CAD Ivey Purchasing Managers Index

10/5 (Friday)

02:00 EUR Quels ECB board member remarks03:00 MXN Mexico policy rate announcement10:30 AUD Retail Sales
03:00 MXN Mexico policy rate announcement
10:30 AUD Retail Sales

◎ Yesterday’s notes

Important officials’ remarks, major currency strength/weakness graphs, world stock indices, and long-term interest rates are recorded below.

October 3, 2018 – The Records for October 3, 2018: Remarks by Officials and Long-Term Rates