FxPro News: The Japanese Yen Weakens and Crude Oil Prices Increase as China Tightens its Grip

As China extends its lockdown, the Japanese yen falls and crude oil prices rise ahead of the RBA decision.

THE ASIA-PACIFIC OUTLOOK FOR TUESDAY

The Japanese yen is falling in early Asia-Pacific trade, continuing overnight losses as US markets rose. The tech-heavy Nasdaq100 Index (NDX) closed 2.01 percent higher after the Wall Street rise. Twitter shares increased by more than 27% after Tesla CEO Elon Musk declared his controlling investment in the firm in an SEC regulatory filing. On Monday, stocks in APAC markets were mainly up.

Crude oil prices rose after Saudi Arabia announced a price increase for all of its consumers. Meanwhile, the European Union is drafting a new round of Russian sanctions, which is causing supply worries. Emmanuel Macron, the French president, has proposed attacking Russia's oil and coal sectors. After charges of war crimes appeared in videos and on-the-ground accounts from the Ukrainian city of Bucha, politicians have been under increased pressure to campaign for fresh sanctions.

Asian equities markets may be under pressure today as China's financial powerhouse, Shanghai, remains closed for an extended period. The city declared that the lockdown, which was supposed to expire today, will be extended until further notice. Beijing has sent hundreds of healthcare staff to assist with mass testing, but unsubstantiated reports suggest that city residents are having difficulty seeking medical treatment and assistance due to the severe government-imposed restrictions.

The Reserve Bank of Australia's interest rate decision will be broadcast at 04:30 GMT. Analysts anticipate the RBA to maintain its benchmark interest rate, but the accompanying policy statement, as well as Governor Lowe's remarks, will be scrutinized. The Australian Dollar might gain from a hawkish surprise there, but recent strength may have set it up for disappointment.

USD/JPY TECHNICAL PREDICTION:

The USD/JPY strengthened overnight, adding to gains made the day before as prices rebounded from the 38.2 percent Fibonacci retracement line. For the second day in a row, prices encountered resistance at the 23.6 percent Fib level. In the near term, prices may fluctuate between the two Fib levels. A break higher would expose the 125.108 high from 2022. A break below the 38.2 percent Fib would, on the other hand, put the rising 20-day Simple Moving Average (SMA) to the test. Meanwhile, the MACD oscillator may soon send a negative indication, with the MACD line moving below its signal line.

DAILY USD/JPY CHART