Nikkei 225
The Nikkei 225 closed 42.3 points or 0.18% higher at 24,083.5 ahead of the BOJ meeting scheduled tomorrow. The central bank is not expected to make any changes to its current monetary policy with interest rates at -0.10%. However, investors could be looking forward to optimism from policymakers about the government’s fiscal stimulus.
On the other hand, the Hang Seng Index is in the red by about 190 points or 0.67% at 28,870.1. They could be driven by violent protests in Hong Kong on Sunday. Initially, the demonstrations were peaceful but police officers soon ordered an end to them as protesters supposedly behaved violently. Four police officers were reported to have gotten injured.
Meanwhile, risk currencies are trading in the green despite today’s Asian session being quiet. AUDUSD is up by around 0.18% at 0.6886. NZDUSD is the second-best performing major currency pair, up by 9.4 pips at 0.6620.
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On the 4-hour chart, we can see that USDCHF has been on a downtrend since late November. This is evidenced by the currency pair’s lower highs and lower lows. When you connect, its most recent highs, you will also see a falling trend line from which USDCHF has previously found resistance. From where it is currently trading, we can see that the currency pair still has some room to trade higher and still maintain its downtrend. Resistance at the trend line seems to be around 0.9707 which also coincides with the 100 SMA. A strong bullish close above this price could indicate that USDCHF could be on its way to test resistance at its previous highs at 0.9830.
On the other hand, if there are not enough buyers in today’s trading, we may not see USDCHF trade higher to test trend line resistance. A close below this morning’s low at 0.9669 could mean that the currency pair may soon fall to last week’s low at 0.9620.