Japanese Yen Slips, Crude Oil Prices Rise Before RBA Decision as China Extends Lockdown Details

Posted Tuesday, April 05, 2022 12:02 (AM) by- Kevin Smith

Japanese Yen Slips, Crude Oil Prices Rise Before RBA Decision as China Extends Lockdown

JAPANESE YEN, USD/JPY, RUSSIA, SANCTIONS, COVID, CHINA - TALKING POINTS

Asia-Pacific markets set for mixed open as EU and US mull new sanctions on Russia
The Reserve Bank of Australia (RBA) policy decision is in focus as today’s main event
USD/JPY rose overnight, but prices stalled at the 23.6% Fibonacci retracement again

TUESDAY’S ASIA-PACIFIC OUTLOOK

During the first hour of Asia-Pacific trade, the Japanese Yen is falling, following overnight losses as US markets surged higher. The Nasdaq100 Index (NDX), which is heavily weighted toward technology, finished the day up 2.01 percent as a result of the Wall Street rise. The shares of Twitter increased by more than 27% when it was discovered that Tesla CEO Elon Musk had a majority ownership in the firm in a regulatory filing with the Securities and Exchange Commission. On Monday, stocks in the Asia-Pacific region were generally in the green.

The price of crude oil rose when Saudi Arabia declared that it will raise rates for all of its consumers, including the United States. Meanwhile, the European Union is drafting a new round of Russian sanctions, which is causing supply worries in the industry. The oil and coal sectors in Russia, according to French President Emmanuel Macron, should be targeted. According to videos and reports from the Ukrainian city of Bucha, charges of war crimes have risen, putting further pressure on parliamentarians to push for fresh sanctions against Russia.

While Shanghai, China's financial center, remains closed for an extended period of time, Asian equities markets may be put under pressure today. The city declared that the lockdown, which began last week and was due to expire today, will be extended until further notice till further notice. Beijing has despatched hundreds of healthcare staff to assist with the mass testing, but unsubstantiated reports have suggested that city residents are having difficulty seeking medical treatment and assistance due to the stringent government-imposed restrictions on the movement of people.

The Reserve Bank of Australia's interest rate decision will be broadcast live on the internet at 04:30 UTC. Analysts predict the Reserve Bank of Australia to maintain its benchmark interest rate, but the accompanying policy statement as well as Governor Lowe's speech will be scrutinized closely by the market. The Australian Dollar may profit from a hawkish surprise in that country, but the currency's recent surge may have set it up for a disappointing outcome there.

USD/JPY TECHNICAL FORECAST:

Prices of the US dollar against the Japanese yen increased overnight, adding to gains made the previous day when prices rallied off the 38.2 percent Fibonacci retracement level. For the second day in a row, prices encountered resistance at the 23.6 percent Fib level. It is possible that prices may fluctuate between the two Fib levels in the near future. A break higher would disclose the 2022 high at 125.108, which is now hidden. A break below the 38.2 percent Fib would, on the other hand, bring the rising 20-day Simple Moving Average (SMA) up for examination. Meanwhile, the MACD oscillator may soon give a negative signal, with the MACD line moving below its signal line, indicating a possible bearish signal.