Headlines:

• USD/JPY returns to the highs for the day after flash in the pan drop
• USD/JPY hits the skids in fall to 155.00
• USD/JPY ramps higher as Ueda loses control
• BOJ governor Ueda says chance of a prolonged weakness in the yen is not zero
• BOJ governor Ueda says will adjust degree of monetary easing if underlying inflation rises
• BOJ governor Ueda says will continue to watch impact of FX on economy, prices
• SNB’s Jordan says central bank has been successful in fighting inflation
• France April consumer confidence 90 vs 92 expected
• Eurozone March M3 money supply +0.9% vs +0.6% y/y expected
• ICYMI: Trump advisers consider penalties for nations shifting away from the US dollar

Markets:

• AUD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.8%
• US 10-year yields down 1.4 bps to 4.692%
• Gold up 0.5% to $2,344.29
• WTI crude up 0.4% to $84.09
• Bitcoin down 0.5% to $64,185

It was all about the Japanese yen during the session as the volatility swings pick up after the BOJ policy decision earlier today.

BOJ governor Ueda had his press conference but he did little to touch on the weaker yen and that was enough for traders to ramp USD/JPY higher. The pair moved up from 155.95 to 156.60 before a sudden surge higher in the yen brought the pair down to 155.00 right at the European open.

The timing of the move is largely suspect as it would be off-form for Tokyo to have intervened. The size of the move might have alluded to that at first but then the dip was quickly bought up. USD/JPY moved back up to 155.50-70 almost immediately, before regaining its composure to move to 156.80 now at the highs for the day.

Things are definitely heating up before the weekend with watchful eyes on any potential intervention from Tokyo, especially with it being a Japanese holiday on Monday. But I wouldn’t rule out a move then either if there isn’t anything today.

In other markets, stocks are staying underpinned after earnings beat from Alphabet and Microsoft. US futures are holding on to early gains for the most part while European indices are also posting modest gains so far on the day.

Coming up next, we have the US PCE price data to go through. That will offer traders more to work with after the Q1 GDP data yesterday. I shared some food for thought on that earlier here.

Have a great rest of the Friday and a wonderful weekend, everyone.

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

SNB chairman, Thomas Jordan, says that they do take climate change very seriously but notes that:

„We should not give the impression that we can solve all the problems of the world with monetary policy.“

He also adds that the central bank takes into account all risks with its investments and that they do have exclusion criterias when making investment decisions. This of course is related to protests against the SNB, with environmental groups demanding for the Swiss central bank to offload investments in firms that are believed to be linked to global warming and climate change.

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

Yesterday, the Nasdaq Composite opened lower
following a selloff caused by surprisingly high Core PCE data in the US Q1 GDP report. The market started to fade the move
right at the open and eventually finished the day almost unchanged. Today we conclude the week with the US PCE report and judging by yesterday’s
price action, we might see another rally at least until the new month data next
week changes the sentiment.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite yesterday opened lower but eventually rallied all the way back to the
prior day’s lows. From a risk management perspective, the sellers will have a
much better risk to reward setup around the 15929 level where they will also
find the confluence of the
50% Fibonacci retracement level
and the red 21 moving average. The
buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and increase the bullish bets into a new all-time
high.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price got rejected from the 21 moving average on this timeframe. Given
yesterday’s price action, we might see another push to the upside, right into
the 15929 resistance where
the sellers will look to pile in with a defined risk above the resistance to
position into new lows.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the yesterday’s negative gap which was filled soon after as the market
rallied for the entire trading session. Moreover, we should see a positive gap
today as tech earnings after the
close were much better than expected and some key stocks
like Alphabet surged into new highs.

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

If anything else, it shows that:

1) The drop earlier wasn’t likely any intervention check or otherwise from Tokyo. I mean, the timing of the move was already suspect as mentioned at the time. And that is arguably the giveaway now after the fact. It is definitely easier to digest and make sense of the move two hours later of course. So, what could it have been?

2) The pair is definitely in a rather abnormal state at the moment. Plenty of traders are staying sidelined in fears of being hammered down by Tokyo. As such, perhaps larger flows would lead to exacerbated price movements – at least more so than usual. That could’ve been it, alongside stops being triggered in such quick fashion.

3) The dip buying shows the underlying appetite in the market right now. It’s tough to fight the momentum especially with the BOJ conviction also lacking as of late. I mean, recent inflation data hasn’t been shaping up the way that they’re hoping it to be. And that is throwing a wrench in the works on any further rate hikes this year. That is not to mention that Japanese yen pairs are also underpinned by higher bond yields in recent weeks. Adding to that is the lack of technical resistance on the way up for USD/JPY currently.

In any case, we’re back to where we were a few hours ago now. Buyers might not get too carried away for now as we await the US PCE price data coming up. But barring any surprises, we could see price action start to pick up again after that. The 157.00 mark will be an interesting level to watch, as with any big round figures from hereon.

And as mentioned earlier here, it will be interesting to see if Tokyo has the appetite to act at the last minute today. Mind you, it is a Japanese holiday on Monday. But still, I wouldn’t rule out any action in the early morning then if there isn’t anything before the weekend later.

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

The Japanese yen might have stolen the focus during the session but it’s time to forget about that for a while. The US PCE price data is coming up later and that will be an important release to watch. It is the Fed’s preferred measure of inflation after all. And following the reaction to the US Q1 advance GDP data yesterday, it is clear that market players are still playing close attention to inflation data at the moment.

For now, equities are keeping the optimism after the late rebound in Wall Street yesterday. Tech shares are of course leading the charge, after earnings beat from Alphabet and Microsoft. S&P 500 futures are up 0.7% while Nasdaq futures are up 1.0%. Dow futures are only up 0.2% currently. In Europe, major indices are also higher with the DAX up 0.7% and CAC 40 up 0.3% on the day.

Stocks have enjoyed a bit more of a steadier showing this week. However, it doesn’t take away from the rather poor performance overall in April. Sellers are not out of the picture yet and we’ll have to see if the data later offers them something to work with at the end of the week. The 100-day moving average (red line) for the S&P 500 is still not too far away for now:

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