GBP calmly starts the week, although the political turmoil around the Brexit agreement project does not guarantee this peace for a long time. Prime Minister May still faces the risk of a vote of no confidence on the part of his party. On Sunday, May recalled that overthrowing her governments posed a risk of Brexit delay.
The stock market in Asia is gaining optimism for the expectations of progress in US-China trade negotiations. Still, on Friday, the market positively accepted the words of US President Trump that perhaps he would not impose more duties on Chinese goods, which revived speculation about the possible severity taken during Trump's meeting with President Xi Jinping during the G20 summit in late November. Chinese Shanghai Composite is growing 0.6 percent today, and Japanese Nikkei225 has gained 0.65 percent.
On Monday, the 19th of November, the event calendar is light in important data releases, so this trading week stars very calmly. Nevertheless, there was a speech from BOJ Governor Haruhiko Kuroda during the night and there is still one more speech scheduled for today from FOMC Member John C. Williams.
USD/JPY analysis for 19/11/2018:
In Tokyo, the speech of the President of the Bank of Japan took place. Kuroda said that the risk appetite of commercial banks may grow in the face of the very loose monetary policy, but it is under control. In the long term, securing banks' profitability will depend on whether they will be able to offer new financial services and diversify their sources of income.
If the Japanese banks do not take appropriate risk management measures, the costs of loans may increase drastically and the stability of the financial system will be jeopardized. The situation of smaller, regional banks in Japan is weak, their profits from core operations are constantly decreasing along with the prolonged period of low-interest rates and declining population. Despite fears, Kuroda maintains the view that the loose monetary policy introduced in 2013 brings tangible benefits to the economy. The central bank is ready to continue it, and over time it will allow reaching the inflation target of 2%. The Japanese yen did not react too much to the words of the President of the Bank of Japan.
Let's now take a look at the USD/JPY technical picture at the H4 time frame. The range of movements on USDJPY at night amounted to less than 30 pips and the price is still moving in a narrow range between the levels of 112.60 - 112.90. The market conditions are oversold, but the momentum remains weak and negative, which suggest the bears are still in control over thsi market and might try to push the prices towards the level of 112.55 or below.
