1 Minute Market Rundown – 20th April 2022
Russia – Ukraine
Crypto Consolidates
Powell to Speak Later in the Week
We highlighted Yen weakness as the current theme and that continues yesterday as the JPY slid to a 2 decade low against the USD trading above 129.00. Overnight and this morning we are seeing the USD pare back its losses – not all too unsurprising given the moves of late. We actually used yesterday’s rally in USD/JPY to take a tactical short in USD/JPY as 130.00 is a key psychological level and with the next BoJ meeting just 8 days away may see a little bit of profit taking ahead of it. Key thing here is it’s a tactical short and we are ultimately looking to re-buy dips and flip ourselves long.
The JPY has declined for 13 straight days – the longest losing run in 50 years. It shouldn’t be too surprising that this move is entirely being driven by rate differentials and unless you see a hawkish pivot by the BoJ or a dovish one by the FED – dips should be well supported. We are looking to flip long around 127.50.
Crypto markets continue to hold in rather well following the mini sell-off seen over the weekend. The alts have outperformed the majors over the past 24 hours with LUNA rallying c.11% and SOL back above $100. We remain cautious and still feel the path of least resistance is lower in the current environment but we hope we are wrong. Crypto markets fully feel like they are trading on the back of the wider macroeconomic narrative and the only way we see an extended rally in risk will be if the FED can navigate the economy to a soft landing. It feels way too early to make that call and so selling rallies in risk feels the appropriate way. BTC and ETH should find resistance at $42k and $3200 respectively.
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