Dollar weakness buoyed commodities, Yen breakdown key support

Yen strengthened to as high as 100.67 to the dollar this morning

Yen strengthened to as much as 110.6 per dollar this morning, dipping down below the key support level of 112.0 for a second day following Fed’s decision to delay the rate hike. Nikkei dropped 1.6% to 16,640. This raised expectation that BOJ might re-consider revising its monetary policy.
 
Oil tested $40 as US Dollar Index fell another 1.13% to 94.65, the lowest level in the past 5 months.
 
SGD has strengthened 2.3% against USD over the last two days, and it is now at 1.351 - the strongest level since July 15.
 
Is US Dollar going to be the next game changer? Let’s wait and see. If market changes the view towards a weakening USD, capital may tend to flow back to emerging markets. Weakening dollar will also support higher commodities price, which again will elevate worries on Oil & Gas, commodities sector. As a result, NPL ratio on the banks’ books will look better as solvency of their lenders improve.

USD/JPY

Key technical to watch:

  • Breakdown key support level 112.0
  • Breakdown two lower Bollinger bands
  • MACD dead cross – momentum turned bearish
  • Strongest level since Oct 2014

USD/SGD

Key technical to watch:

  • Breakdown two lower Bollinger bands
  • RSI  at 21.46% level - overbought
  • Parabolic – trending down