Fundamental Analysis

• U.S. Stock Market Sharply Lower; U.S. Government Releases Budget Proposal
• U.S. government announces proposed tax hikes for wealthy, resulting in lower stock prices
• BOJ policy meeting today; will Governor Kuroda surprise?
• There was a surprise at the end of December, and there will be caution again this time
• Yen buying strengthened at the end of the New York session, with the dollar falling to JPY 136
• U.S. Jobless Claims Beat Estimates, Labor Market Eases
• Powell emphasized the importance of the jobs report for interest rate trends
• U.S. jobs report expected to show +222,000
• If the U.S. jobs report comes in above market expectations, the probability of a large rate hike will increase

Technical Analysis

The exchange rate is all over the Swiss franc and the Canadian dollar is all over the U.S. dollar, which temporarily strengthened against the dollar at the end of the New York session, but returned to a weaker dollar in the morning. There is some demand for yen buying in some areas. If monetary easing is maintained as expected, the yen is likely to weaken against the dollar.

USDJPY

The USDJPY is likely to swing either up or down depending on the outcome of the BOJ’s monetary policy meeting and the employment data. Be careful when trading around the time of the meeting as price movements will be rough. Unless there are any surprises, the yen will weaken against the dollar as the Japan-U.S. interest rate gap widens. Therefore, our policy is to buy on the downside. If there is a surprise, we will need to change our policy.

Dow Jones Industrial Average (US30)

Although it depends on the U.S. employment data, if it is higher than market expectations, U.S. interest rates are likely to rise, putting downward pressure on stock prices. Yesterday’s budget proposal to raise taxes on the wealthy was released, which will be a heavy burden for stock prices. Technically, the 200-day moving average was broken at the close, and today’s move will be a factor in determining whether the downtrend will continue.

Bitcoin (BTCUSD)

Fundamentals surrounding the virtual currency market are deteriorating and the decline could intensify. As mentioned in the newsletter, Silvergate Capital closed its virtual currency payment network. The ensuing turmoil continues.

Chart analysis shows that the price has risen through a window during the previous spike. The current decline is likely to fill the window. We need to be wary of a temporary drop below $20,000 to $19700.

Today’s Important Economic Indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.