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The yen suck in safe-haven flows on stories that the US authorities is contemplating limiting exports of AI chips. And given we have now danger occasions and a US election looming, traders are possible questioning how uncovered to danger they actually need to be. By : Matt Simpson, Market Analyst Urge for food for danger took successful on Tuesday on stories that the US authorities is contemplating limiting exports of AI-chip exports. Tech shares led Wall Avenue indices decrease, merely taking their cue from Nvidia and AMD shares whose exports are set to be restricted. Nvidia fell -4.5% from its document excessive set on Monday, which additionally confronted promoting strain as ASLM holdings – a producer of AI tools – reported lower-than-expected orders. AMD was down -5.2% and closed beneath 160. Click on the web site hyperlink under to get our unique Information to index buying and selling in This autumn 2024. https://www.foreign exchange.com/en-us/market-outlooks-2024/This autumn-indices-outlook/ Bearish engulfing candles shaped on the Nasdaq 100 and the Dow Jones futures whereas a bearish exterior day shaped on S&P 500 futures, the final two of which have been toppled at their document highs alongside Nvidia. It’s unclear whether or not that is the start of a correct pullback, however the information was completely timed for traders to ebook earnings at frothy costs forward of key financial knowledge together with an ECB assembly, US retail gross sales and jobless claims figures on Thursday. However given asset managers stay absolutely invested within the S&P 500 futures market and have proven a renewed love for tech shares, for now I believe this to be a blip within the development. With that stated, VIX futures have risen for 4 weeks and we have now a US election pending, so we might discover danger is extra liable to bumps as merchants query in the event that they need to reload as occasions unfold. Maybe the yen has reached an inflection level:The Japanese yen was the strongest main on Tuesday because of safe-haven flows, which additionally benefited gold and bond costs, with yields shifting decrease. However with danger occasions on the horizon after an prolonged transfer decrease for the yen, maybe we’re witnessing an inflection level for the yen. It’s one thing to a minimum of take into account. USD/JPY has risen over 7% over the previous 4 weeks, but bullish momentum has clearly declined in latest days because the market tried (however failed) to even contact 150. A bearish divergence has additionally shaped on the day by day RSI (2) and costs are again beneath its 200-day EMA. AUD/JPY has shaped a decrease excessive on the day by day chart alongside a bearish divergence. Whereas the 200-day EMA sits close by for potential assist, it is a key market to observe as it’s thought-about a barometer of danger. EUR/JPY additionally appears to be turning decrease after repeated makes an attempt to interrupt above the September excessive. A bearish divergence can also be obvious. Ought to the ECB ship a dovish lower tomorrow whereas risk-off stay in place, EUR/JPY has the potential to roll over. Nikkei 225 futures are sharply decrease forward of the Tokyo open and on monitor for a bearish engulfing / exterior day. A multi-week bearish divergence can also be at play and costs are again beneath the September excessive. Additionally word the marginal day by day shut beneath the August trendline. Merchants ought to control Nasdaq futures alongside the Nikkei to evaluate its draw back potential. Click on the web site hyperlink under to get our unique Information to USD/JPY buying and selling in This autumn 2024. https://www.foreign exchange.com/en-us/market-outlooks-2024/This autumn-usd-jpy-outlook/ Occasions in focus (AEDT):
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