The risk appetite could be boosted in the beginning of the new week, as the weekend did not carry new ballistic missile test from North Korean which celebrated its national day last Saturday, while Hurricane Irma has been downgraded to level 2, after its landfall on Florida yesterday. The Japanese yen has been well-buoyed as a low yield financing currency sending USDJPY up to 108.50 area underpinning the demand for Nikkei 225 major exporting companies in the beginning of this new week, after slippage to 107.31 by the weekend weighed down on the demand for equities. The gold retreated below $1340, after reaching by the weekend $1357.52 which has been its highest reached level since Aug. 16, 2016 on the rising odds of having no more interest rate hiking this year amid the current lower than expected inflation pressure in US and the outcomes of the hurricanes which hit it strongly this year. While it seems that Trump can find his way to intersect into the monetary policy too, after receiving last week The Fed's vice president Stanley Fisher's resignation letter. Trump is planning for replacing The Fed's Chief Yellen who is to end her term next February, While the current strongest candidate for taking her place is the National Economic Council director and President Donald Trump's top economic advisor, Gary Cohn who tried recently to revive the hope of reflation by saying that he expects tax reforms to be passed this year denying his intention to resign over Trump’s reaction to riots in Charlottesville. It's well known that Trump is not in favor of strong dollar and prefers weaker dollar for supporting the exporting activity and lowering the imports volume for raising the capacity utilization and the demand for jobs in US. The current United States Secretary of the Treasury under the Trump administration Steven Mnuchin said it clearly earlier last month that "a weaker currency is somewhat better for trade". The markets will waiting later today for the UN security council voting for imposing new sanctions against North Korea and also its trading counterparts, while it looks that the Russian side is more reluctant this time to accept this projection, as it adds more pressure on North Korea which can go forward unfazed of UN as usual with more desperation of reaching a diplomatic solution as the Russian president Putin indicated last week. While The US administration is still raising the pressure on China to cap the North Korean plans believing that the clue to solve this problem is in the hand China which said it is to accept imposing new sanctions, if these sanctions are to lead to diplomatic solution.
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USDJPY opened the new week on an upside gap at 108.10, after closing last week at 107.52 following dipping to 107.31 last Friday which is its lowest recorded level since last Nov. 14.
USDJPY reached 107.31 after watching increasing downside momentum following breaking its key supporting level at 108.05 which could prop it up on last Apr. 17.
USDJPY is still trading well below its daily SMA50, its daily SMA100 and also its daily SMA200 in its fourth day of consecutive being below its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading 110.33 today.
USDJPY is still exposed to forming a lower high to resume this descending channel, after failing to get over 111.04 resisting level forming a lower high at 110.67 at the end of last August.
USDJPY daily RSI-14 is referring now to existence inside its neutral territory reading 41.030.
USDJPY daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is having now its main line inside its neutral region at 27.223 leading to the upside its signal line which is lower in the same region at 23.664 after bottoming out above the oversold area below 20.

Important levels: Daily SMA50 @ 111.16, Daily SMA100 @ 112.32 and Daily SMA200 @ 110.33
S3: 107.31
S2: 106.03
S3: 104.96
R1: 110.67
R2: 111.04
R3: 112.20
Have a good day
Kind Regards
Global Market Strategist
Walid Salah El Din
Mob: +20 12 2465 9143