Just a bit of an update to the earlier headline here. It is said that North Korea fired two missiles today and they fell within Japan’s exclusive economic zone (EEZ). Japan adds that this would be the 13th time that North Korea’s missiles have landed in the EEZ in out of about 19 previous shots. Well, at least someone is keeping count.
This article was written by Justin Low at www.forexlive.com.
Markets:
Markets are still digesting the Fed policy decision yesterday, and I shared some thoughts on that earlier here.
It was a rather tentative session in Europe, as regional markets are also gearing up for the ECB meeting outcome later today. The central bank is surely going to hike rates by 25 bps but it will be interesting to see if they will pre-commit to another rate hike in July, which they had been talking up in recent weeks.
The dollar is mostly steady, with the help of a big jump higher in USD/JPY during Asia trading. The pair ran up from a low of 139.95 all the way above 141.00 and pushed to a high of 141.50 in European morning trade.
There weren’t much news driving the move but the technicals are your best bet in trying to read into the situation.
Besides that, the dollar is mostly little changed against the rest of the major currencies bloc. EUR/USD is largely hanging around 1.0820-30 levels, being little changed on the day currently.
The kiwi is the only exception with NZD/USD down 0.7% to 0.6163 amid a more cautious risk mood and also a further weakening in the Chinese yuan. The aussie is able to stay more resilient after a hot jobs report, which prompted traders to think about a RBA rate hike in July.
Elsewhere, gold is under pressure in the aftermath of the Fed decision and looks poised to break below its 100-day moving average at long last in a potential fall towards $1,900 next.
This article was written by Justin Low at www.forexlive.com.
During the press conference,
Fed Chair Powell mentioned that the July meeting is „live,“ although
he did not make any firm commitments. The USDJPY rallied on a more hawkish Fed.
Overall, this demonstrates the Fed’s readiness to take additional steps to
address inflation, while emphasizing that their actions will depend on the
economic data.
USDJPY Technical Analysis –
Daily Timeframe
On the daily chart, we can see that USDJPY broke
out of the blue box and extended the rally towards the 142 level. The buyers
kept leaning on the red 21 moving average in the
past days and eventually succeeded as the Fed delivered a more hawkish than
expected decision. The 142.17 resistance will be
key as a break above it would open the door for a bigger rally into the 150
level. The sellers are likely to defend the resistance and position for a
bigger pullback into the upward trendline.
USDJPY Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that the USDJPY
rally keeps diverging with the
MACD right
when it’s coming near the 142 resistance. This is generally a sign of weakening
momentum often followed by pullbacks or reversals. The next move will be most
likely decided by today’s economic data, but on the technical side the sellers
will be looking to short at the 142 resistance, while the buyers will want to
long at a pullback into the 140.38 support.
USDJPY Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see more
closely yesterday’s breakout and the subsequent rally. From a risk management
perspective, the buyers should wait for a pullback into the support turned
resistance at 140.38 where they can enter with a
better risk to reward ratio and target the 142 resistance. The sellers, on the
other hand, will either wait to enter at the 142 resistance or pile in more
aggressively if the price falls below the 140.38 support.
Today,
we will see the US Jobless Claims and Retail Sales reports. Tomorrow, the focus
will shift to the University of Michigan Consumer Sentiment survey. Another big
miss in Jobless Claims could potentially raise the market concerns on the
labour market, leading to a more dovish rates pricing that should send Treasury
yields lower and the USDJPY with it.
Conversely, if the data beats expectations,
it should keep the tight labour market view and thus lift Treasury yields and
the USDJPY pair. Additionally, the market will be interested in in the decrease
in long-term inflation expectations in tomorrow’s UMich report. A higher
reading could suggest a potential de-anchoring of inflation expectations going
on, which may raise concerns and lead to a more hawkish pricing.
This article was written by ForexLive at www.forexlive.com.
The missile is reported to be fired towards the East Sea, according to the South Korean military. This is quite a common event by now but still should never be taken lightly. For geographical context:
This article was written by Justin Low at www.forexlive.com.
Die digitale Plattform für Ersatzteilmanagement von Produktionsmaschinen gewinnt namhafte Kunden und überzeugt Investoren. Die Software der Gründer spart der Industrie dabei Zeit – und Geld.
Die größte Unternehmensberatung der Welt steigert nach zwei Rekordjahren den Umsatz nur noch einstellig. McKinsey kommentiert die Entwicklung nicht – doch über die Gründe wird spekuliert.
Union, Deka und DWS stellen sich vor der Aufsichtsratswahl hinter die Konzernführung. Werden die Anleger dennoch den britischen und US-Investoren folgen?