Evergrande's liquidity crisis | 22 September 2021

22 September 2021, USD/JPY

Evergrande's liquidity crisis

USDJPY trading plan:

Concerns over Evergrande acted as a boiling point for markets. With more than $300 billion in debt, Evergrande's liquidity crisis rattled global markets this week. China's years-long effort to deleverage its economy has pushed companies to resort to off-balance sheet investments in search of funding. After Beijing further capped debt levels of property developers last year, the most indebted players like Evergrande felt even more pressure to find new sources of capital to ease mounting liquidity stress. This is a bad signal for the stock market and USDJPY, which has a correlation with the shares.

Investment idea: sell 109.77 and take profit 109.35.

David Johnson
Analyst of «FreshForex» company
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