• The Fed left interest rates unchanged as
  expected at the last meeting with basically no change to the statement.
• Fed Chair Powell stressed
  once again that they are proceeding carefully as the full effects of policy
  tightening have yet to be felt.
• The recent US CPI missed
  expectations across the board bringing the expectations for rate cuts
  forward.
• The labour market is
  starting to show weakness as Continuing Claims are now
  rising at a fast pace and the recent NFP report
  missed across the board. Last week though, the US Jobless Claims beat
  forecasts by a big margin, although volatility in the data is normal.
• The latest US PMIs came
  basically in line with expectations with a miss in the Manufacturing index and
  a beat in the Services measure.
• The US Consumer
  Confidence yesterday beat expectations although the
  details about the labour market continue to weaken.
• The Fed members have been leaning on the
  hawkish side, but more recently the tone changed to a more neutral stance.
• The market doesn’t
  expect the Fed to hike anymore.

JPY

• The BoJ kept its monetary policy basically unchanged at the last meeting but formally
  widened the YCC to 1% on the 10-year JGBs stating that it will be a reference
  cap.
• Governor Ueda repeated once again that they won’t
  hesitate to take easing measures if needed and that they are not foreseeing
  sustainable price increases.
• The Japanese CPIlast week showed that inflation
  pressures are easing although they remain well above the BoJ’s 2% target.
• The latest Unemployment Rate remained unchanged near cycle lows.
• The Japanese Manufacturing PMI fell further into contraction but
  the Services PMI ticked higher remaining in expansion.
• The latest Japanese wage data beat expectations. As a reminder
  the BoJ is focusing on wage growth to decide whether to tweak its monetary
  policy.
• The market expects the BoJ to keep
  interest rates unchanged at the next meeting as well.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see
that USDJPY is now approaching a key trendline around
the 146.50 level. This is where we can expect the buyers to step in with a
defined risk below the trendline to position for another rally into the highs.

The rate cuts expectations and
the consequent fall in Treasury yields have been weighing a lot on the US
Dollar lately which boosted the JPY as the unwinding of some carry trades and
the convergence of yield differentials favoured the Yen. As long as the market
continues to price in rate cuts for the Fed and the US data continues to
weaken, we can expect more JPY strength to come.

USDJPY
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we got a nice
selloff yesterday following the less hawkish comments from Fed’s Waller and the
deteriorating labour market details in the US Consumer Confidence report. We
are now at key levels so the sellers might want to see a pullback before
positioning for more downside and target the break below the key trendline.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is pulling back at the moment. The sellers should lean on the downward
trendline around the 148.00 handle to position for another selloff into the
major trendline, while the buyers will want to see the price breaking higher to
increase the bullish bets and target the trendline around the 149.50 level.

Upcoming Events

Tomorrow we will get the US PCE and US Jobless Claims
data with the market likely focusing more on the latter given that we already
saw the latest inflation data with the US CPI report just two weeks ago. On
Friday, we conclude the week with the Japan Labour Market data and the US ISM
Manufacturing PMI which missed expectations by a big margin the last time.

This article was written by FL Contributors at www.forexlive.com.

• 🌎 2023 global GDP growth lowered to 2.9% (previously 3.0%)
• 🌎 2024 global GDP growth unchanged at 2.7%
• 🌎 2025 global GDP growth seen at 3.0% (first estimate)
• 🇺🇸 2023 US GDP growth improved to 2.4% (previously 2.2%)
• 🇺🇸 2024 US GDP growth improved to 1.5% (previously 1.3%)
• 🇪🇺 2023 Eurozone GDP growth unchanged at 0.6%
• 🇪🇺 2024 Eurozone GDP growth lowered to 0.9% (previously 1.1%)
• 🇬🇧 2023 UK GDP growth improved to 0.5% (previously 0.3%)
• 🇬🇧 2024 UK GDP growth lowered to 0.7% (previously 0.8%)
• 🇯🇵 2023 Japan GDP growth lowered to 1.7% (previously 1.8%)
• 🇯🇵 2024 Japan GDP growth unchanged at 1.0%
• 🇨🇳 2023 China GDP growth improved to 5.2% (previously 5.1%)
• 🇨🇳 2024 China GDP growth improved to 4.7% (previously 4.6%)

While the prospects of most major economies are seen improving, global growth forecast is still expected to slow from their previous forecast. The organisation says that advanced economies are headed for a soft landing with the US economy in particular holding up better than expected. That being said, they say that the risk of a recession is not off the table yet.

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

• Economic confidence 93.8 vs 93.7 expected
• Prior 93.3; revised to 93.5
• Industrial confidence -9.5 vs -8.9 expected
• Prior -9.3; revised to -9.2
• Services confidence 4.9 vs 4.3 expected
• Prior 4.5; revised to 4.6

Euro area economic sentiment picks up in November, with an improvement to services sector conditions offsetting the decline in manufacturing. The latter is still very much in recession territory but so far the good news is that the overall economy is holding up better than expected when compared to the outlook during the summer this year.

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

• Prior 43.33k; revised to 43.68k
• Net consumer credit £1.3 billion vs £1.5 billion expected
• Prior £1.4 billion

Gross lending fell to £16.2 billion in October, down from £18.1 billion in September as individuals repaid, on net, £0.1 billion of mortgage debt on the month – as opposed to £1.0 billion of net repayments in the month before. Meanwhile, the annual growth for consumer credit is seen increasing further to 8.1% – the highest since October 2018.

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