Wednesday, May 28, 2014

Is the dollar – Yen in a downtrend? | Private capital expenditure future estimates in Oz give AUD strength

As we know, lower highs and lower lows characterise a downtrend. The Dollar Yen pair (USDJPY) has been going resolutely sideways for some time. Now it appears that we are getting lower highs and lower lows, visible on the daily chart, above. It also looks as if sellers of this pair are using the 50 Day Exponential Moving Average (EMA) as their reference point.

And price remains below the 200 Day Simple Moving Average (SMA).

There is one more hurdle to be breached before any definitive conclusions can be arrived at with regard to this, however, and that is the support that exists at 100.748. Until this is breached it would not be in any way wise to assume that the dominant trend in the Yen has reversed and is now to the downside.

Private capital expenditure future estimates in Oz give AUD strength

Private new capital investment in Australia fell by 4.2% in the first quarter of 2014, as against an expected fall of 1.5%. This might seem like bad news for the Aussie. However, private new capital expenditure intentions for the fiscal year 2014 – 15 were revised up to 9.8% better than previous estimates. And it is the future the market is concerned with.

This has been enough to strengthen the Aussie across the board. It is up overnight against the NZ dollar, the Canadian dollar and the US dollar.

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