The speed bump from jawboning by Japanese officials and market concern about a BOJ policy pivot slowed down the USD/JPY surge in the past week but now that we’ve cleared the latter, it is looking like buyers are taking charge again. The pair is now running up to 135.96, its highest since October 1998.

The technical dominoes continue to fall by every 500 pips for USD/JPY since breaking the 120.00 mark and there is little resistance from hereon until we get towards 140.00 potentially. That will be the next big psychological level as to whether we might see firmer intervention by Japanese officials.

Otherwise, the continued policy divergence and lack of buying conviction in bonds amid continued central bank tightening and surging inflation will just continue to present headwinds for the Japanese yen.

Another pair which I have been rather fond of since last week has been CHF/JPY and it is up for a fourth consecutive day, trading to 140.40 – up 500 pips since the SNB policy pivot.

This article was written by Justin Low at www.forexlive.com.

The German network regulator reiterates its call to save as much gas as possible as the country faces a shortage emergency amid a cut in supplies from Russia. The country is turning to coal-fired power plants again to ensure electricity continuity and is a serious blow to ambitions reduce coal usage by the turn of the decade.

It’s not just Germany that is being affected by this at the moment. Italy, Austria, and the Netherlands are all facing a similar predicament.

This article was written by Justin Low at www.forexlive.com.

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UK industrial order books slip in June but the good news is that price expectations also eased to a 9-month low. It is a bit contrasting with rising consumer inflation but CBI notes that this could be „the first signs that weaker activity is beginning to slow the pace of price increases in the sector“.

This article was written by Justin Low at www.forexlive.com.

Equities are reflecting a more risk-on mood so far on the day and that is translating to a softer dollar in European morning trade. The greenback and the yen are the two weakest performers, as European stocks are seeing solid gains on the session alongside US futures. Here’s a snapshot of the equities space before we get to some dollar charts:

• Eurostoxx +1.3%
• Germany DAX +1.1%
• France CAC 40 +1.7%
• UK FTSE +0.8%
• S&P 500 futures +1.9%*
• Nasdaq futures +2.0%*
• Dow futures +1.7%*

*relative to Friday levels

The euro is among the better performers so far with EUR/USD climbing from 1.0520 to 1.0580 on the session, helped by continued hawkish remarks by ECB policymakers.

The high last week near 1.0600 will offer up some minor resistance with the daily close one to watch as to whether buyers can keep a hold above the 50.0 Fib retracement level at 1.0566. For now, the near-term bias is more bullish upon the push above the 200-hour moving average (blue line) earlier in the day.

Meanwhile, GBP/USD has also managed to climb above 1.2300 and is up 0.5% on the day currently:

The 1.2400 level will still offer sterner resistance with traders continuing to try and sort out the divergence story in the pair.

Elsewhere, USD/CAD is pinned near the lows and is down 0.5% to 1.2910 amid a double-top pattern being formed just above 1.3050:

The better risk appetite and higher oil prices (WTI crude up 2% to $111.85) are both also contributing to a stronger loonie on the day.

Looking at other commodity currencies, the gains are more measured with AUD/USD up 0.4% to 0.6975 and still keeping below 0.7000 and its 200-hour moving average at 0.6996. NZD/USD is up 0.3% to 0.6355 with the Friday high at 0.6395 keeping a lid on any upside push for the time being.

This article was written by Justin Low at www.forexlive.com.

Well, market odds have already priced in at least 75 bps for both July and September combined. It is now down to the ECB to deliver on that as such. ECB policymaker Kažimír is also out saying that negative rates „should be a thing of history“ by September.

This article was written by Justin Low at www.forexlive.com.