1 usd to jpy

The dollar index passed 101, which we last saw for just over a week at the height of the lockdowns. But history suggests that this rally has roughly passed the halfway point. DXY is unlikely to stop near 103-104 as it has done in the last six years Except for a brief period of stock market panic in March 2020, the last time the dollar was at this level against a basket of the six most popular currencies was in April 2017. The Dollar Index peaked in the 103-104 area in both cases and has not traded consistently higher for the past 20 years. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun The past two times, the dollar’s rise has been halted by the Fed, easing its policy or tone of commentary, as we have seen stock and commodity markets crash along with the USD rally. That is not the case this time, so the DXY is unlikely to stop near 103-104 as it has done in the last six years. For USDJPY, it could spike to 140, which has not been seen since 1998 We are now seeing a rise in the dollar, mainly on the Fed’s switch to monetary tightening mode. We saw that the last three such impulses of dollar growth, which started in 2014, 1998, and 1992 caused the DXY to appreciate by about 25%. For you: Forex Rates: British Pound (GBP) Strengthening? Weak (EUR) Euro? GBP, NZD And AUD Supported By Monetary Policy? Applying this pattern to the current case, we get that the dollar has exhausted just over half of its upside potential and could strengthen as much as 110-112 on the DXY in the next few months. For EURUSD, this scenario sets up a plunge towards parity, the lows of the last 20 years. For USDJPY, it could spike to 140, which has not been seen since 1998. And for GBPUSD, a return to 1.2000, the lows of the Brexit-fear era.

Forex 2022-04-19 10:30 Summary:  The Japanese yen has seen a relentless decline over the last few weeks, underpinned by a widening yield differential between the US and the Japanese government bonds. As verbal interventions from the Bank of Japan and Ministry of Finance fail to be heard, we are looking at a subtle policy shift with the aim to manage volatility, or a real physical intervention. The JPY continues to run away to the downside, with USDJPY surging above 128.00 for the first time since 2002. The next major chart point is the early 2002 high near at 135.00. AUDJPY has also surged to fresh record highs of 94.50+ as the AUD was slightly firmer following the hawkish tilt in RBA minutes. Read next: (UKOIL) Brent Crude Oil Spikes to Highest Price For April, (NGAS) Natural Gas Hitting Pre-2008 Prices, Cotton Planting Has Begun The big why? US 10-year treasury yields have notched a new cycle peak and will soon threaten the 3.00% level if they continue to rise, widening the policy divergence with the Bank of Japan (BOJ), that continues to stick with its yield-curve-control (YCC) policy that caps 10-year Japanese government bond yields (JGB) yields at 0.25%. Both the BOJ and the Japanese Ministry of Finance (MoF) have stepped up their verbal interventions against JPY volatility as recently as overnight, but these have hardly had any effect. The BOJ conducted unprecedented four-day purchase plan into the end of its financial year on March 31 after the JGB yields had hit 0.25%, a ceiling the central bank had made clear in March last year. This further highlighted their commitment to capping yields. While the BoJ may be concerned about the volatility and the pace of JPY decline, the Bank is unlikely to be worried about its direction. In fact, BOJ rhetoric repeatedly suggests that it sees JPY weakness as good news for the economy and exports as well as a factor helping to spur imported inflation pressures. This is especially important if we note that GDP is still well below pre-COVID levels and core inflation is negative. Is inflation a concern? The rise in JGB yields has little to do with expectations that Japanese inflation is moving sustainably higher. CPI is expected to increase above the BOJ’s 2% (from 0.9% currently) target, but the central bank expects the move to be temporary. Much of the gains in inflation are on the back of base effects and higher energy prices, and underlying price pressures remain muted. Stripping out energy prices and fresh food clearly shows that core inflation is still very benign at multiyear lows at -1% y/y. Will the YCC be tweaked? We are probably starting to see the limit of the yield curve control program, as sustained BOJ purchases could be a problem for a central bank that already owns around half of government issues. Would the BOJ go Australia’s way that clumsily abandoned its peg in November? That would need more domestic demand for JGBs which is unlikely to be achieved. Historically, BoJ has been open to adjusting targeting range of bond yields. It widened the range to +/-0.25% from +/-0.20% in March 2021, which was changed in July 2018 from +/-0.10% before that. The BoJ could tweak its YCC policy to target 10-year yields form +/-25bps to +/-30bps to give itself more flexibility and manage volatility. This move, if effected, will be communicated as a measure to manage the increased volatility in bond markets, to ensure that it is not taken as a sign of any shift in policy thinking. Article on Crypto: Hot Topic - NEAR Protocol! Terra (LUNA) has been seeing a consistent downward price trend, DAI Should Stay Close To $1 What to watch next? Our sense is that until a policy shift is spotted, or real intervention is mobilized, the market is content to continue driving the JPY lower. Ironically, in the past, the MoF has mobilised intervention in the yen in the direction of avoiding further JPY strength, not weakness. These interventions may not achieve more than temporary success if the underlying policy and market dynamics don’t shift (i.e., the BOJ sticking to its current policy while inflationary pressures and yields elsewhere continue higher). But the risk of tremendous two-way, intraday volatility should be appreciated. Japan’s Finance Minister Suzuki is heading for a bilateral meeting with the US and comments would be on watch. Next BOJ meeting is scheduled for April 27-28, but focus will still be tilted more towards the Fed’s May meeting where a 50bps rate hike is expected along with the start of quantitative tightening. The only other way could be to hope that the yen would find a floor, and wait for BoJ governor Kuroda’s tenure to end in April 2023. This may then be followed up with rate hikes.

The pressure on the Japanese yen persists in the markets. The USDJPY has been hitting 20-year highs almost daily since last week, rising 11.8% to 128.40 since early March. Since the beginning of the year, the yield spread between the 10-year US and Japanese bonds has doubled to 2.7%, on the back of rising US performance, which has sharply increased the attractiveness of US long-term bonds. The currency in such an environment works as a shock absorber, returning competitiveness to the economy. USD To JPY (USD/JPY) Chart  A hand-tied Bank of Japan is unlikely to be able to offer anything serious to reverse the yen However, in the USDJPY equilibrium exchange rate equation, you also have to add the changed reality with the surge in prices of commodities and energy imports in Japan. Capital is leaving the country, taking refuge in the USA or commodity-exporting countries that can now enforce the tighter monetary policy. A hand-tied Bank of Japan is unlikely to be able to offer anything serious to reverse the yen. It’s also not in the interests of the country’s finance ministry, which could use a weaker yen to deflate its enormous government debt. This opens the yen up for further declines, potentially into the region of 140 per dollar, where the exchange rate was last seen during the Asian debt crisis, and even earlier, in the early 1990s, when the world last experienced a similarly high rate of consumer inflation.

The dollar index reached 101 points on Tuesday for the first time since March 2020, which may be influenced by rising U.S. Treasury bond yields. Investors appear to be awaiting a series of half-point interest rate hikes from the Federal Reserve as it tries to rein in rising inflation. James Bullard, the St. Louis Fed chairman known for his hawkish views, said Monday that U.S. inflation is far too high, reiterating his case for raising interest rates to 3.5 percent by the end of the year. Will the Fed accelerate interest rate hikes? Last month, the Fed raised its target interest rate by 25 basis points, and forecasts released at the time indicated that interest rates could rise to 1.9 percent by the end of the year. Bullard's preferred path would require rate hikes of half a percentage point at all six remaining Fed meetings this year. James Bullard's remarks also included a statement that interest rates could rise by 75 basis points to accelerate the entire monetary tightening cycle. Article on Crypto: Binance Academy: Immutable X Token (IMX) - What Is It? IMX Explained. How To Buy IMX?| FXMAG.COM From a monetary policy perspective, there may be a strong divergence between the actions of the Fed and the rest of the central banks, including the Bank of Japan. This in turn may translate into currency rates, including the USD/JPY pair, which is trading at 128 yen per dollar. Weakness of the yen beneficial for exporters Since the beginning of the year, the yen may have lost 10 percent against the U.S. dollar, and more than 5 percent in April alone. In this situation, as calculated by Bloomberg, the yen seems to have lost the most against the dollar since 1971. A weak yen theoretically can help the Japanese economy raise the inflation rate due to more expensive imports of products from abroad. It can support Japanese manufacturers who export their goods, potentially making them more competitive. Thus, for Japan, the current situation may be quite comfortable. Only inflation getting out of control would be an undesirable phenomenon. SNB limits the appreciation of the Franc The USD/CHF exchange rate recorded 12-month highs as the pair may be under pressure from a strong dollar despite potential interventions by the Swiss Bank. Current deposits at the SNB increased by CHF 2.2 billion in the week ending April 8 from the previous week, following an increase of CHF 5.7 billion in the previous week. Article on Crypto: Altcoins Showing Promising Growth - Take a Look at Solana (SOL), POLKADOT (DOT) and SHIBA INU (SHIB-USD)| FXMAG.COM The rise in deposits is widely seen as an indicator of the central bank's foreign exchange interventions dictating the amount of credit added to the sight accounts of commercial banks that hold freshly created francs in exchange for foreign currency. At its last meeting, the SNB stressed that it would limit the appreciation of the franc, which is near a 7-year high against the euro. This level was reached after Russia's invasion of Ukraine. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

The world's major currencies continue to surrender to the dollar one after another. Since the start of March, the yen has lost 11.5% and fallen to a 20-year low. But just as we saw the third world economy currency stabilise, the currency of the second one went on the move. Chinese currency had previously successfully resisted the strengthening of the USD since the middle of last year, but The dollar has added over 2% to the renminbi since the start of the week, the most significant move since 2015. It is also noteworthy that the Chinese currency had previously successfully resisted the strengthening of the USD since the middle of last year, but in an abrupt move, entered the area of the extremes of the last 12 months. Read next (FxPro): Still Going Up The Price Of Crude Oil (WTI/BRENT) When Energy Stocks Will Start To Soar? | FXMAG.COM We see an equally impressive attack on the Pound. The GBPUSD broke the support at 1.3000 on Friday, and it is already losing more than 1% so far today. USDCHF reached its highest point since June 2020, exceeding 0.9550. Read next (FxPro): Want To Exchange 100 GBP To USD? GBP/USD Below 1.3000! (GBP) British Pound Weakens! GBP To USD - 17-Months-Low! | FXMAG.COM The New Zealand and Australian dollars have been declining steadily since early April, despite hawkish action and comments from respective central banks. Moreover, the export-oriented economies of these countries should benefit from the emerging commodity prices. EURUSD is trading below 1.0800, near 2020 reversal levels and maintaining a very moderate trading range The USDCAD went back to month highs in less than two days, reversing Wednesday's sharp rally and earlier gains from hawkish comments by the Bank of Canada. EURUSD is trading below 1.0800, near 2020 reversal levels and maintaining a very moderate trading range. However, the swing in GBPUSD today and USDCNH throughout the week and the USDJPY drama since early March suggests that EURUSD could be the next victim of dollar bulls.

The yen has returned to attracting safe-haven flows as China's covid crisis intensifies. Fear of a Fed-fueled recession is pushing 10-year Treasury yields lower. Technicals are pointing to a clear peak and a clearer downtrend. USD/JPY bearish – there are good reasons to expect the currency pair to fall, and the trade seems more straightforward than other ones. *Note: This content first appeared as an answer to a Premium user. Sign up and get unfettered access to our analysts and exclusive content. 1) When things go wrong in Asia, buy the yen The yen benefits from safe-haven flows related to China's aggressive policies against covid. Lockdowns in Shanghai and Beijing, the world's second-largest economies largest and most important cities, are hurting the economy. Recent retail sales figures showed a plunge of 11.1% YoY in April, nearly double the early expectations and a sign of falling demand. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Not only consumption is dropping. Industrial output also badly missed estimates with a fall of 2.9% YoY, worse than the 0.5% increase projected. Japanese investors are repatriating investments in China and other places in Asia. The yen's status as a safe currency is mostly seen when there is trouble in its own continent. 2) The wrong yields are rising The second reason for the USD/JPY decline – and the potential for more – comes from the US. The Federal Reserve's aggressive policy of raising interest rates has been positive for the pair, especially as it contrasted with the Bank of Japan's dovish policy. However, there can be too much of a good thing. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM While short-term Treasury yields continue rising – reflecting expectations for higher inflation and higher borrowing costs – the part that is relevant to USD/JPY is turning south. Returns on 10-year bonds have declined from their peak above 3% as investors begin pricing in growing chances of a recession. Lloyd Blankfein of Goldman Sachs said it is "a very high risk" and that consumers and businesses should get ready. That prophecy may be self-fulfilling. 3) Technical decline Third, the technical tide has turned against the pair. It has begun trading in a downtrend channel, with lower highs and lower lows. Momentum on the 4h-chart has turned negative, the RSI has failed to climb above the 50 level, and the price is capped at the 100-SMA – after falling below the 50-SMA. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Support is at 128.70, which cushioned the pair twice in May. The monthly low of 127.50 is the next level to watch, and it also converges with the 200-SMA. Further down, 126.90 and 126.40 are noteworthy. Resistance is at 1.2950, and then at 130.90. Final thoughts The list above provides ample ammunition for bears, and bulls may need to cling to hopes for further yen-printing from the Bank of Japan – a highly unlikely scenario given the current, already extremely loose monetary policy.

Summary: Rising of European government bond yields. Despite the Euro’s likelihood to strengthen, market sentiment is still bearish for the EUR/GBP USD continues to show bullish sentiment against the JPY Raised government bond yields allow the EUR some relief The price of the EUR/USD currency pair increased by more than 0.15% on Monday. Market sentiment for the EUR/USD currency pair has turned bullish on Monday. The European Central Banks (ECB) representative, Villeroy, hinted at the possibility of an active summer for the European bond yields, this comes amidst concerns that a weak Euro threatened price stability in the currency bloc. A weak Euro can steer the ECB away from its inflation target. The possibility of raising interest rates from the ECB is likely to instill investors with confidence in the Euro going forward and in the ECBs determination to fight against rising prices and inflation. EUR/USD Price Chart Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM EUR/GBP showing bearish signals Market sentiment for this currency pair is showing bearish signals. In general the market risk sentiment has soured over the past weeks, investors are still concerned over the lockdowns in China, the war in the Ukraine and rising interest rates at the Federal Reserve Bank. With the UK economy bordering on a recession, and Villeroy’s comments, the Euro is strengthening against the Pound Sterling, after the drop in value mid last week, the recovery is welcome. EUR/GBP Price Chart CHF not keeping up with the EUR The Euro strengthens against the CHF amidst the bullish market sentiment for this currency pair. The volatility in the forex market is felt daily by investors, as investors risk sentiment sours, the value of safe-haven currencies, like the Swiss Franc, usually strengthens. However, investor confidence in the EURO has improved as expectations for the ECB to raise interest rates increase. EUR/CHF Price Chart Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM USD/JPY bullish The market sentiment for this currency pair is showing bullish signals. Despite the bullish signals, the JPY has gained on the USD on Monday. As the hawkish Fed continues, it is likely that the sentiment will remain bullish for this currency pair. If there are to be bearish signals for the pair, they are likely to be short lived if the Bank of Japan (BoJ) continue with their dovish monetary policy. USD/JPY Price Chart Sources: Finance.yahoo.com, poundsterlinglive.com, dailyfx.com

GBPUSD tests daily resistance The pound surged after the UK saw a jump in average earnings over the past three months. Solid bullish momentum above 1.2400 has prompted sellers to cover their positions, exacerbating volatility in the process. The daily resistance at 1.2640 coincides with the 30-day moving average and is an important supply zone. Its breach could pave the way for a bullish reversal in the weeks to come. In the meantime, an overbought RSI may cause a pullback as intraday buyers take profit. 1.2310 is the closest support. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM USDJPY enters narrowing consolidation The yen recouped some losses after Japan’s GDP growth beat expectations in Q1. The US dollar is taking a breather after a prolonged rally. The latest retreat has found support at 127.50 over the 30-day moving average. Medium-term sentiment would stay upbeat as long as the price remains above this demand zone. 130.80 from a previously faded rebound is a key resistance and a bullish breakout could resume the rally towards 133.00. 128.70 is the immediate support for the current consolidation. Follow us on Google News! XAUUSD tests critical floor Gold inched higher as the US dollar index pulled back from a two-decade high. The price action has stabilised near January’s lows at 1790. A bullish RSI divergence indicates a loss of bearish momentum in this critical demand area, triggering a buy-the-dip behaviour. Sellers’ profit-taking could drive the precious metal higher. A bounce above 1858 may trigger an even broader short-covering. On the downside, a fall below 1790 would send the price into bearish territory with December’s lows (1750) as the next stop. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM

US dollar retreats on higher risk appetite The US dollar weakened overnight despite US yields moving higher and hawkish Fed officials. Like equity markets, currency markets concentrated on positive US data, and a fall in oil prices which lifted risk-seeking sentiment, although I believe this is all part of a bull market correction. The dollar index slumped by 0.85% to 103.30, edging higher to 103.40 in Asia as US index futures fell. Resistance remains at 105.00, and the daily close below 104.00 suggests support at 102.50 could be tested. Failure suggests a deeper correction still. EUR/USD was one of the main beneficiaries of the swing in risk sentiment, jumping 1.15% to 1.0555 before edging lower to 1.0535 in Asia. Having based at 1.0350 on Friday, EUR/USD has rallied through 1.0500 overnight and could test 1.0650 and possibly even the 1.0800 37-year breakout line. I continue to believe that any rally above 1.0700 will be hard to sustain in the medium term. In a similar vein, GBP/USD has traced out a low at 1.2155 last week and leapt 1.40% higher to 1.2490 overnight, where it remains in Asia. The next resistance is at 1.2650; however, like Europe, the United Kingdom’s structural headwinds leave the longer-term picture still bearish. The rise in US yields overnight has left USD/JPY trading sideways at 129.20 in Asia, barely changed over the past few days. If US yields remain at these levels, a deeper correction to 127.00 becomes unlikely. In the bigger picture, USD/JPY remains at the mercy of the US/Japan rate differential. The rally in global sentiment has allowed AUD/USD and NZD/USD to book 0.85% gains once again overnight, rising to 0.7030 and 0.6360 respectively, where they remain in Asia. Any rally to 0.7200 or 0.6500 is likely to see sellers lining up though as both will continue to be buffeted by swings in investor sentiment, especially in China. Likewise, Asian currencies had a good night overnight, with CNY, CNH, KRW, and SGD the standout performers. USD/CNY at 6.8000 and USD/CNH at 6.8500 have proved formidable barriers, and if both USD/Yuans remain below these levels, more Asia FX strength is possible. Lower oil prices will also help, but if US yields continue to track higher from here, then the US dollar correction versus Asia is likely to quickly run out of steam. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Summary: Euro showing upside potential. UK economic data exceeds market expectations. SNB turns hawkish, which acts in favour of the CHF. Investors turning to JPY in times of market uncertainty. Read next: (EUR/USD, EUR/GBP) Market Participants Betting On A More Hawkish ECB, A Dovish BoJ Weighs On The Safe-Haven Currency (USD/JPY) - Good Morning Forex!  The US Dollar is likely to experience volatility during the next trading week. Market sentiment for this major currency pair is reflecting a bullish market sentiment. The next trading week is full of economic data releases which are likely to impact the US Dollar, on Thursday the Fed’s preferred inflation reading PCE will give the market an indication of the growing pressures in the U.S. The Euro is also showing upside potential as investors expect the European Central Bank (ECB) will tighten their monetary policy during the summer. EUR/USD Price Chart UK retail data exceeds market expectations. Market sentiment for this currency pair is showing mixed signals. The GBP saw a positive market turn around on Friday after a positive market turnaround. UK sales volume data raised by 1.4% in April following a fall of 1.2% during March. The data release exceeded the market expectation of -0.2%. The data shows that UK households are showing resilience in the current economic environment. EUR/GBP Price Chart CHF rallies on Friday Market sentiment is showing bearish signals for this currency pair. On Thursday the Swiss Franc began to rally after the president of the Swiss National Bank (SNB) announced that they are ready to act on the rising inflation which is currently at 2.5%. EUR/CHF Price Chart GBP/JPY currency pair Market sentiment is showing bearish signals for this currency pair. This currency pair is sensitive to risk appetite, as investors begin to turn away from risky investments, the JPY tends to strengthen due to its safe-haven asset. GBP/JPY Price Chart Read next:Major Index NASDAQ (IXIC) Sell Off After Equities Fall, Will the ECB Turn Hawkish?  Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com

After a brutal slide over the past two months, the Japanese yen is showing some bounce in its step. Japanese yen bounces back The yen registered 10 straight losing weeks but finally ended that nasty streak last week, with gains of about one per cent. Barring any surprises today, the yen will repeat with another strong week. On Thursday, USD/JPY dropped to 127.02, its lowest level since late April. Has the yen turned the corner? The US dollar pummelled the yen in the months of March and April, and earlier this month USD/JPY touched 131.34, its highest level in some 20 years. The yen’s descent was rapid and drew warnings from the BoJ and Japan’s Ministry of Finance. There was speculation that the exchange rate was nearing an unknown ‘line in the sand’, which if breached, would trigger an intervention to prop up the yen (clearly, 130 was not that line in the sand). The yen’s movement is largely dependent on the US/Japan rate differential. With the BoJ showing no hesitation to intervene in order to defend its yield curve, the yen has been at the mercy of the direction of US yields. Over the past few months, yields have been generally going up, which has pushed the yen sharply lower. The Federal Reserve remains in aggressive mode, but with concerns of stagflation and a possible recession, the Fed may have to ease up on the pace and size of its rate hikes, which would weigh on US yields, thus boosting the yen. The recent turbulence in the stock markets, which has seen equities fall sharply, has benefited the yen, which traditionally acts as a safe-haven asset. The yen may have flexed some muscle, but I would still consider yen risk tilted to the downside. The US economy remains in good shape, and the US dollar is also a safe-haven asset. If the Ukraine war continues to cause increases in energy and food prices, risk appetite would fall and investors would likely flock to the safety of the US dollar. . USD/JPY Technical USD/JPY is testing resistance at 1.2938, followed by resistance at 1.3123 There is support at 1.3000 and 1.2918 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Major correction on the cards? The rally in USDJPY from early March to early May was huge, driven by a combination of a soaring greenback and a BoJ determined to support its yield curve control policy tool. But the last couple of weeks have brought some relief in the pair, driven primarily by the dollar paring gains against the broader market. And the pair may have just broken below an interesting technical support level that could signal a more significant correction. A head and shoulders appears to have formed over the last month and the break of the neckline is potentially in progress. This also comes immediately following the break of the 200/233-period SMA band on the 4-hour chart which did provide support for most of the last week before finally giving way. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM If this breakout holds, it could potentially point to quite a significant correction based on the size of the head and shoulders formation and the projections that could indicate. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

After several days of trading sideways, the yen has posted strong gains on Tuesday. In the North American session, USD/JPY is trading at 126.58, down 1.02% on the day. The yen is currently trading at its highest level in five weeks. BoJ CPI stronger than expected The Bank of Japan’s preferred inflation gauge, BoJ CPI, surprised the markets with a gain of 1.4% in April, higher than the consensus estimate of 1.0%. The index was up from 1.1% in March and is reflective of inflation moving higher. Of course, Japan is not facing the surging inflation which has hit the US, UK and other developed economies, but it is a significant change nonetheless, after years of deflation. Japan’s CPI excluding fresh food is expected to remain above 2%, which is the BoJ’s inflation target. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM While other major central banks have tightened policy in response to spiralling inflation, the BoJ continues to insist that cost-push inflation will ease. The Bank has tenaciously defended its yield curve control, maintaining that ultra-low rates are critical in order to support the fragile economy. The BoJ has not hesitated to intervene in order to cap JGB rates but has not made any moves to prop up the yen, which hit 20-year lows earlier this month. The yen may have flexed some muscles, but I would still consider yen risk tilted to the downside. The US economy remains in good shape, and the US dollar is also a safe-haven asset. If the Ukraine war continues to cause increases in energy and food prices, risk appetite would fall and investors would likely flock to the safety of the US dollar. The yen is at the mercy of US yields, which have generally been on an upswing over the past few months, pushing the yen sharply low. USD/JPY Technical USD/JPY has broken below support at 1.2759 and 1.2672. Below, there is support at 1.2550 There is resistance at 1.2825. Above, 1.2947 is protecting the 130 level   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News

AUDUSD finally tests very strong resistance at 7135/55. Shorts need stops above 7175. A break higher this week is a buy signal targeting 7230/50. Shorts need stops above 7275. Shorts at 7135/55 target 7090 then 7060/50. Further losses test support at 7020/10. Longs need stops below 7000. USDJPY shorts at resistance is at 127.50/70 need stops above 127.80. A break higher is a buy signal targeting 128.20/30, perhaps as far as strong resistance at 128.70/90. Holding resistance is at 127.50/70 targets 127.20/00. A break below 126.80 targets 126.30/20 & eventually 125.80. EURJPY holding strong resistance at 136.50/70 (perfectly on Thursday & Friday) targets 135.60/50 for profit taking on shorts. Further losses target 135.35/25. If we continue lower look for 134.65/55 then strong support at 134.20/00 for profit taking on any shorts. We should have strong resistance again at 136.50/70. Shorts need stops above 136.95. A break higher targets 137.20/30 then 138.00/20. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM EURUSD longs at support at 1.0670/50 start to work on the bounce towards strong resistance at 1.0800/20 for profit taking. Shorts need stops above 1.0835. Support again at 1.0670/55. Longs need stops below 1.0640. Strong support at 1.0600/1.0590. GBPUSD made a high for the day 6 pips above strong resistance at 1.2640/60. Shorts need stops above 1.2680. A break higher this week is a buy signal initially targeting 1.2725/45. Shorts at 1.2640/60 target 1.2590, perhaps as far as 1.2555/45 for profit taking. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk Follow FXMAG.COM on Google News

Still improving risk sentiment sends US dollar lower The US dollar declined once again on Friday as improving risk sentiment continues to unwind the 2022 US dollar rally. That has spilt over into Asian markets today, with regional currencies booking some decent gains versus the greenback this morning. On Friday, the dollar index edged 0.12% lower to 101.64, losing another 0.13% to 101.50 in Asia. Support remains at 101.00, with resistance at 102.50. EUR/USD EUR/USD held steady on Friday, closing almost unchanged at 1.0735, with US dollar weakness being reflected in EMFX and the commonwealth currencies. It has gained 0.20% to 1.0755 in Asia, but overall, seems locked in a 1.0700 to 1.0800 range. Oil’s rally may temper single currency gains, with the multi-decade breakout line, today at 1.0830, still a formidable barrier. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM GBP/USD GBP/USD closed 0.20% higher at 1.2630 on Friday, adding another 0.14% to 1.2640 in Asia. GBP/USD looks set to trade in a noisy 1.2600 to 1.2700 range as the week gets underway. The government’s cost of living package may prompt faster BOE tightening, supporting the downside, while the economic slowdown continues to slow upside progress. USD/JPY USD/JPY is trading sideways, ranging each side of 127.00 as US yields trade in narrow ranges. That is likely to continue with US bond markets closed today. The chart suggests USD/JPY has further downside potential that could target 125.00. Only a move through trendline resistance at 127.80 changes the picture. AUD/USD & NZD/USD AUD/USD and NZD/USD continue to be driven entirely by swings in global risk sentiment. Another strong performance by Wall Street on Friday maintained that upward momentum and both AUD and NZD were prime beneficiaries. AUD/USD rallied by 0.85% to 0.7160, adding another 0.20% to 0.7175 today. It has resistance at 0.7260, and support at 0.7100. NZD/USD rose by 0.86% to 0.6536 on Friday, rising another 0.17% to 0.6547 today. Resistance nearby at 0.6570 opens a larger rally to 0.6650, with support at 0.6475. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Asian FX rode improving investor risk sentiment higher on Friday, moves reflected throughout the EM space. Gains were led by the Chinese yuan, Korean won, and New Taiwan dollar, all gaining around 0.70%, while even the beleaguered Malaysian ringgit out in a good show, USD/MYR falling to 4.3770. Both the Indonesian rupiah and the Malaysian ringgit should find further strength on higher oil prices, even though it increases their domestic subsidy bills. Oil’s strength is likely the reason the Indian rupee has remained unchanged from Friday through today. CNY, KRW and NTD are rallying strongly today, likely boosted by China’s reopening hopes. USD/CNY, USD/KRW, and USD/NTD have fallen by around 0.80% today. However, if oil prices continue to rise this week, the rally in energy-importing Asian currencies may run out of steam. Follow FXMAG.COM on Google News This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

US dollar pares gains from NFP report Friday’s higher Non-Farm Payroll data saw the US dollar reverse much of its losses from Thursday, characterising a very choppy back-and-forth week last week. The dollar index rose by 0.40% to 1.0217, leaving the index slightly higher for the week. Notably, the rally was not enough to lift the index above its 102.35 pivot point, suggesting that the downside remains the path of least resistance still. Support/resistance lies at 101.30 and 102.70. In Asia, the China reopening trade has pushed the index slightly lower to 102.11.  US dollar eases lower in Asia - MarketPulseMarketPulse EUR/USD fell only slightly by 0.27% to 1.0720 on Friday post-data, where it remains in Asia. ​ Resistance between 1.0770 and 1.0830 remains a formidable barrier, with support at 1.0650. However, the single currency continues to show resilience at these levels, and resistance could be seriously tested if China’s reopening trade continues to support risk sentiment. Volumes will be impacted by European holidays today.   Sterling tumbled by 0.70% to 1.2490 on Friday in yet another whipsaw session. It remains there in Asia today. It has support/resistance at 1.2460 and 1.2670. A UK leadership challenge this week may serve to limit gains but a clean break of 1.2670 opens a potentially larger rally to 1.2800 and 1.3000, while the failure of 1.2460 could see sterling fall to 1.2400.   USD/JPY rose 0.73% to 130.85 on Friday, accounting for most of the dollar index gains post US data as US bond yields firmed slightly. USD/JPY has edged 0.15% lower to 130.65 today despite dovish BOJ comments, but the US/Japan rate differential should continue to support the downside unless US yields suddenly fall sharply. It has support at 129.00 and resistance at 131.00, a double top, and 131.30.   AUD/USD fell post US data as risk sentiment turned south. It finished 0.80% lower at 0.7205, easing another 0.20% to 0.7195 in Asia. AUD/USD has nearby support at 0.7180, an ascending one-month trendline, with resistance between its 50/100/200-day moving averages (DMAs) between 0.7225 and 0.7255. RBA hiking concerns ahead of tomorrow’s RBA meeting look set to limit gains in the short term.   USD/Asia moved higher on Friday on firm US data, with the Korean won, New Taiwan dollar, Singapore dollar, and India rupee the main losers, being favourites by fast-money to express risk sentiment of late. Yuan trading was impacted by a China holiday. Markets are quiet in Asia today, with Asian currencies booking only small gains versus the greenback. The sharp rise in oil prices on Friday, which continues in Asian trading today, is likely limiting Asia FX gains. The double-edged sword of China’s reopening is that oil prices are likely to remain firm as well as demand returns. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The Japanese yen has started the week quietly. In the European session, USD/JPY is trading at 130.63, up 0.15% on the day. Yen steadies after slide - MarketPulseMarketPulse It was a week to forget for the yen, as USD/JPY surged 2.91%, the biggest weekly gain this year. The driver of the yen’s downswing was primarily the rise in US bond yields, which have started the week with gains and are closing in on the 3% level. US yields climbed on Friday after the May nonfarm payrolls were stronger than expected. The economy added 390 thousand jobs, above the forecast of 325 thousand and indicating that the labour market remains robust. The report has solidified expectations that the Fed will deliver 50-bps hikes at the June and July meetings. Ahead of the NFP release, Fed members were sending out hawkish messages to the markets. On Thursday, Fed Vice Chair Brainard said the Fed should not take a break from rate hikes in September, and that the Fed might continue with 50-bps hikes if inflation doesn’t peak. What makes Brainard’s comments noteworthy is that she is considered a leading dove on the Fed, which is indicative of the hawkish pivot the Fed has taken as inflation continues to accelerate. Echoing Brainard, Fed member Mester said that the Fed had to act aggressively to contain inflation and that could mean an increase in September.   BoJ’s Kuroda dismisses tightening With the Japanese yen declining in health and trading above 130 to the dollar, there has been talk that the BoJ might intervene in order to prop up the currency. BoJ Governor Kuroda poured cold water on any such expectations on Monday, stating that monetary tightening was not “suitable”. Kuroda said that the economy was still recovering from Covid and high commodity prices were adding pressure on the economy. He added that the BoJ would adhere to its ultra-loose policy until the Bank achieved its inflation target of 2%. With Kuroda doubling down on the Bank’s accommodative policy, the risk for the yen is clearly tilted to the downside, barring a decline in US Treasury yields. . USD/JPY Technical USD/JPY faces resistance at 1.3124 and 1.3226 There is support at 129.56 and 128.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dollar continues to pummel yen The Japanese yen continues to lose ground. USD/JPY touched the 133 line earlier in the day, as the yen hit a 20-year low. In the North American session, USD/JPY is trading at 132.55, up 0.50% on the day. The dollar index rose as much as 0.39% today and hit its highest level since May 23rd, before giving up these gains. The sharp descent of the yen can be attributed to two factors. First, US Treasury yields are moving higher, and on Tuesday, the 5, 10 and 30-year yields are now above the 3 per cent level. The upward move in US yields could be related to this week’s USD 96 billion in government bond sales in the 3, 10 and 30-year tenors. The dollar has momentum and if Treasury yields remain above 3% and Friday’s US CPI print is high, USD/JPY should respond with further gains. The second factor weighing on the yen is the Bank of Japan’s ultra-accommodative policy. BoJ Governor Kuroda said on Monday that monetary tightening was “not suitable and that the central bank would maintain its ultra-loose policy until the Bank achieved its inflation target of 2.0%. The BoJ has been quick to intervene to defend its yield curve, purchasing JGBs in order to cap yields on 10-year bonds at 0.25%. There has been speculation that the BoJ has a ‘line in the sand’ at which it would intervene to prop up the yen, but the yen continues to fall and touched 133 today with no signs that the BoJ is planning to step in. It should be remembered that Kuroda has stated on more than one occasion that a weak yen is mostly positive for the economy. In addition, surging oil prices are pressuring the yen, as crude oil is priced in US dollars. With US rates moving higher and the BoJ keeping a cap on JGB yields, the US/Japan rate differential continues to widen, and the risk to the yen remains tilted to the downside. . USD/JPY Technical USD/JPY is testing resistance at 1.3226. Above, there is resistance at 1.3368 There is support at 131.24 and 129.56   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen falls to 20-year low - MarketPulseMarketPulse

Relevance up to 17:00 2022-06-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: USD/JPY has been trading in strong upside cycle and I see potential for further upside continuation. Bullish continuation al patterns are preferable. Trading recommendation: Due to the strong upside cycle on both short and mid term, I see potential for bullish continuation. Watch for buying opportunities on the pullbacks with the upside objectives at the price of 132.90 and 135.00. MACD is showing positive reading, which is good sign that trend is still bullish. Stochastic oscillator is showing potential oversold condition and potential for the rally. Key support s set at the price of 132.20   Read more: https://www.instaforex.eu/forex_analysis/279155

The global economy can now be characterised as one in which many central bankers are poised to hike rates more forcefully, even as growth prospects are being revised lower. Investors are now having to ask which economies can best withstand these tighter monetary conditions and which currency to back? During this summer of discontent the answer to these questions largely remains the US economy and the dollar. Unlike the supply-driven inflation suffered in Europe, price rises in the US are far more a function of demand-side factors and suggest stagflation is less of a likelihood in the US than in Europe. And with no end in sight to tight energy markets, the US remains better positioned here too. We expect the Fed to deliver at least another 175bp of hikes this year as the Fed drives real US interest rates into restrictive territory. This is not good news for global growth – but that is the point, the Fed needs to slow demand. Flatter yield curves consistent with the latter stages of the US business cycle are normally good news for the dollar. In all this means that the dollar should stay bid this summer (1.00/1.02 is possible in EUR/USD), while USD/JPY in the 135/140 region looks ready to trigger Japanese intervention. GBP/USD can move to the low 1.20s as the BoE cycle is repriced lower and the CHF should start to outperform in Europe as the SNB guides it higher. CEE FX has become more mixed. We still favour the PLN, but HUF and now CZK look more vulnerable. This will be a fragile environment for most EMFX – especially those most exposed to China. Here USD/CNY can still push higher taking most of $/Asia with it. Developed markets EUR/USD A long, hot summer for the euro Current spot: 1.0476 Both the Fed and the ECB are in hawkish mode – both battling inflation near 8%. Both are probably happy with stronger currencies. The difference is the stagflationary shock from the war in Ukraine which makes the ECB unlikely to deliver on the 150bp of tightening priced in. There is also the issue of growth differentials and what they mean for international equity flows. These could start generating some euro under-performance. EUR/USD looks biased towards the lower end of a 1.02-1.08 range this summer. It looks far too early to pick the top in the Fed cycle. Higher US real rates also spell trouble for risk assets, including EM in general. This will also lend further support to the dollar USD/JPY Official concern and stretched valuations may help JPY Current spot: 134.43 The combination of aggressive Fed tightening (we look for at least another 175bp of Fed rate hikes this year), high energy prices and BoJ dovishness has sent USD/JPY to 135. Japanese officials are now officially unhappy with the rapid pace of JPY weakness. Sensible arguments go that the BoJ cannot intervene to sell $/JPY since: a) markets are not disorderly and b) BoJ is still printing money with QQE. Yet intervention is political & one never knows whether deals get cut behind the scenes We cannot rule out USD/JPY marching towards 140 given that this is a fundamentally driven, but intervention signals are flashing amber/red. Traded USD/JPY volatility can rise further. GBP/USD Bank of England tightening expectations are extreme Current spot: 134.43 GBP/USD looks as though it can trade back down to the 1.21/22 levels – largely on the back of dollar strength. But certainly an Unexploded Bomb (UXB) for sterling is the incredibly aggressive 175bp of tightening priced into the BoE cycle for year-end. This seems very extreme given that not all the MPC were on board with May’s 25bp hike. The 16 June BoE meeting is an event risk. UK growth will struggle in 2Q, although there is increasing speculation over tax cuts coming through this Autumn – in a bid to shore up Conservative support ahead of a possible ‘23 election. We doubt a Tory leadership change or Brexit tension has too much impact on sterling – a lot of bad news is already priced. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more This article is a part of the report by ING: Source

The Japanese yen continues to post strong swings this week and is up sharply on Friday. USD/JPY is trading at 134.67 in Europe, up 1.86% on the day. BoJ maintains yield curve control It’s been a busy week, with the markets still digesting some dramatic moves by central banks. The Fed and SNB delivered massive salvos in their fight against inflation, and the BoE continues to tighten, albeit at a more modest pace. The week wrapped up with the Bank of Japan policy decision earlier in the day. These meetings are usually on the dull side, with the central bank merely reaffirming its ultra-loose policy, with the occasional tweak. Today’s meeting was closely watched, however, as the BOJ’s yield curve stance has been under pressure and there was speculation that the BoJ might retreat and release the cap of 0.25% on 10-year JGBs. In the end, the BoJ did not blink or budge, maintaining its policy for yield curve control and QE. The BOJ reaffirmed it will continue its policy of rock-bottom rates, even though other major central banks are tightening policy, as we saw this week with the Fed, BOE and SNB. Governor Kuroda has insisted that monetary easing remain in place, given Japan’s slow recovery from the Covid-19 pandemic. With inflation barely at 2%, the central bank’s target, Kuroda can afford to continue his loose policy and tenaciously defend the BoJ’s yield curve. The BoJ didn’t adjust policy today but it was noteworthy that the policy statement added the exchange rate to its list of risks, something we haven’t seen in previous statements. The yen hit a 24-year low at 135.60 earlier this week and could fall even further. The Bank is sending a message that it is monitoring the exchange rate, but I question whether this will deter the markets from continuing to test the yen – previous jawboning from the BoJ and Ministry of Finance didn’t succeed in stemming the yen’s slide, and we could well be on our way to a 140 yen if the US/Japan rate differential continues to widen. . USD/JPY Technical USD/JPY is testing resistance at 133.14. Above, there is resistance at 1.3585 There is support at 131.72 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen falls back down after BoJ balks - MarketPulseMarketPulse

Dollar in choppy waters The US dollar held onto its intraday gains on Friday, as US bond inflows seemed to support it as investors preferred safety over risk into the weekend and today’s US holiday. With the weekend being relatively uneventful, the US dollar has eased in Asia, but overall continues a pattern of choppy range trading. The dollar index rose 0.82% to 104.65 on Friday, thanks mostly to a weak yen. In Asia, it has eased 0.26% to 104.38. The dollar index has support at 1.0350 with resistance now distant at 1.0570.   EUR/USD eased by 0.56% to 1.0495 on Friday in another 100-point session, climbing by 0.31% to 1.0525 in Asia as weekend hedges are taken off. Dutch natural gas futures prices remain elevated, so the single currency is not receiving much of a boost from last Friday’s oil retreat. It has initial resistance at 1.0600, with challenging resistance at 1.0650. Support is at 1.0450 and 1.0400 now although I note that EUR/USD has based twice at 1.0350. That leaves the door open slightly to a corrective recovery this week.   Sterling has another awful day as its economic picture darkens, falling by 1.10% to 1.2215 on Friday, edging 0.22% higher to 1.2240 in Asia. ​ GBP/USD has initial resistance at 1.2400 and 1.2500, with support at 1.2200 and then 1.1950.   USD/JPY powered higher on Friday as the Bank of Japan left monetary policy unchanged and continues to heavily intervene to cap ultra-low JGB yields. With Japan’s inflation only expected to hit 2.50% this Friday, I can’t really blame them, but with the US, Switzerland, the United Kingdom, et al hiking, the interest rate differential continues to power USD/JPY higher. USD/JPY leapt 2.10% higher to 135.00 on Friday, with last week’s 131.50 low a distant memory and a bargain for somebody. Having probed 135.45 today, USD/JPY has eased back to 134.85 this morning, as commodity prices fell. It is likely to be only a respite though unless US yields move sharply lower this week. USD/JPY has resistance at 135.60 with support distant at 132.20.   Swings in investor sentiment continue to generate all the two-way volatility in the Australian and New Zealand dollars. AUD/USD fell 1.60% on Friday to 0.6935 before rising to 0.6955 in Asia. NZD/USD fell 0.80% to 0.6315 on Friday before rising to 0.6330 in Asia. A US holiday is dampening volumes but both Australasians have traced out bottoming patterns on the charts. As long as 0.6850 and 0.6200 hold respectively, further gains to 0.7150 and 0.6450 cannot be ruled out.   On a 24-hour basis, Asian currencies are mostly unchanged today after the losses on Friday and were mostly unwound this morning. The main reason has been a rally by China’s CNY and CNH after the PBOC left both the 1 and 5-year LPRs unchanged. USD/CNY has fallen 0.60% to 6.6760, while USD/CNH has fallen by 0.50% to 6.6745, dragging USD/Asia lower. Although the KRW, INR, MYR, THB, and IDR look the most vulnerable and remain near last week’s lows, a US holiday today should mean range-trading continues into Wednesday. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar remains firm but choppy - MarketPulseMarketPulse

Relevance up to 15:00 2022-06-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Blue line -support Blue rectangle- target if support fails to hold USDJPY is trading around 134.93. Price is again near its 2022 highs. The chances of a major reversal and pull back towards 130 remain high. Today however we will focus on a short-term pull back that might be triggered soon. After a sharp rise from 131.47 towards 135.35, price is moving sideways over the last couple of days. Support is at 134.50. Failure to hold above this support will be a bearish signal. If the break down occurs, we should then expect USDJPY price to move towards the blue rectangle target area.   Read more: https://www.instaforex.eu/forex_analysis/280895

Relevance up to 15:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Red lines- bearish divergence Blue line- resistance USDJPY is making new higher highs above 136. Trend remains bullish. Price has not broken below the key short-term support we warned yesterday. Price has respected support at 134.90 and is now moving higher. However the RSI is not following price. The RSI is providing us with bearish divergence signals. The bearish divergence is a sign of weakening bullish trend. The chances of a bigger reversal and pull back have increased. Bulls need to be cautious.   Read more: https://www.instaforex.eu/forex_analysis/281107

USDJPY experienced a ”Flash correction” Thursday before bouncing back strongly and has now broken above resistance at 135.60. There is still divergence on RSI, but trend is up and remember the trend is your friend.To reverse the bullish picture USDJPY needs to break below 131.40. Source: Saxo Group USDJPY is testing its strong resistance around 136. A cluster of resistance/projection levels are placed around this level.It was the peak in January 2002, it is 1.382 Fibonacci projection of the Symmetrical Triangle break out, and if you take the peak to bottom of the Triangle and add that difference to the break-out price (illustrated by the two vertical arrows). If USDJPY can close the day above 136.20 there could very well be more upside potential. However, RSI (Relative Strength Index) has reached and exceeded the value level it did at the peak before USDJPY started forming the corrective Triangle pattern in June 2015.Going back 30 years every time, the RSI has reached values around 80 a larger correction has set in. At the time of writing, Monthly RSI is above 84.However, the two other times where RSI was close to 80 the correction did not occur before divergence had been recorded. There is currently no divergence on RSI during this uptrend i.e., we could see another leg higher after a quite possible minor downward correction.An exhaustive move higher could reach 142-147.  Keep an eye on RSI, if it breaks its steep rising trend line it could be a strong indication of a correction. Source: Saxo Group Source: Technical Update - USDJPY testing strong resistance, can it close above? | Saxo Group (home.saxo)

The Japanese yen leads in losses against the dollar amongst the G10 currencies. And so far, there are indications that the USDJPY’s rising trend will only be interrupted by technical corrections in the coming weeks or months. The main fundamental driver for the USDJPY is the substantial divergence in the US and Japanese monetary policy. The former has raised its key rate by 150 points in the last three meetings and started selling assets off the Fed balance sheet. The latter has maintained its crisis rhetoric, promising to continue with QE and increasing bond purchases to keep 10-year yields close to 0.25%. The currency market is not only wagering on the present but is actively putting expectations into prices. From this perspective, the USDJPY exchange rate results from an overlay of the key rate expectations, which are best reflected in 2-year bond yields. The spread started rising steadily in early 2021, at the same time as USDJPY began to rise. The spread between the US and Japanese 2-year yields exceeded 3% this month, reaching 3.5%, the highest since 2007, although it was only 0.25% at the beginning of last year. Approaching a spread of 3% has not stopped the Fed from tightening, nor the Japanese rhetoric, so it makes sense to tune in to a return to pre-World Financial Crisis norms, i.e., above 4.3% versus 3.2% now, leaving the potential for around a third of the movement that already passed. If these correlations between the USDJPY and USDJPY 2-year yield spreads remain in place, we could see the USDJPY continue to rise to 150 yen, last seen in 1990 and twice as high as the historic lows of 2011. Suppose the Japanese monetary authorities and the Ministry of Finance manage to steer the yen through such a devaluation, preserving confidence in the financial system. In that case, this could revive the economy by raising export competitiveness, potentially returning the Land of the Rising Sun to export-oriented status.

The Japanese yen is in positive territory today, extending its gains from yesterday. USD/JPY is trading at 135.46 in the European session, down 0.56% on the day. Yen rises as US yields dip The yen has gained a bit of strength as USD/JPY is back below 136.00, after rising close to 136.71 earlier in the week, its highest level since September 1998. The yen received a reprieve from its recent slide due to a drop yesterday in US Treasury yields, rather than any newfound strength related to the yen. This is another indication that USD/JPY movement is at the mercy of the US/Japan rate differential, with the Bank of Japan holding firm on its yield cap for JGBs. The BoJ is not showing any signs of adjusting its ultra-accommodative policy, leaving the yen to bear the brunt of this inflexible stance. As a result, the yen has been pummelled by the US dollar, with the yen plunging some 17% in 2022. The BoJ and Japan’s Ministry of Finance have jawboned about the exchange rate, noting their concern. The verbal intervention has clearly not worked, raising the question as to whether Tokyo has a ‘line in the sand’, which if crossed, would trigger intervention in the currency markets to support the ailing yen. There had been speculation that a move above 125.00 or 130.00 could result in a response, but that failed to happen. Currently, there are voices stating that the 140 level is that line in the sand. BoJ Governor Kuroda has insisted that the Bank needs to support Japan’s fragile economy with monetary easing, and has said that the exchange rate is not a policy target. Kuroda has even said that a weak yen has benefits for the economy, such as making exports more attractive. Given this stance, I question whether a 140.00 yen will trigger currency intervention. True, the yen is at 24-year highs, but let’s not forget that USD/JPY has been above 200.00 and even 300.00 in the past, and the BoJ has indicated that the exchange rate is not a priority. . USD/JPY Technical There is resistance at 1.3657 and 1.3814 USD/JPY has support at 1.3404 and 1.3247 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen eyes inflation report - MarketPulseMarketPulse

Relevance up to 09:00 2022-06-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The currency market continues to move in a tight horizontal channel, driven by many factors that balance each other. They prevent the formation of a distinct trend, but since dollar already halted its growth, euro has every chance of rising noticeably in the short term. This is also possible in other currencies pair with dollar. In principle, the reason why the market is like this right now is because dollar is overbought and Treasury bonds eased its sell-offs, leading to the stop of yield growth. Another factor is the rate hikes implemented by world central banks, as well as the impending increase of ECB's cost of borrowing, which reduces the difference in interest rates and supports the exchange rates of currencies traded against dollar. While relative calm has been established in the forex market, the crypto market continues to suffer significant problems, ruining not only holders of bitcoins and other crypto instruments, but also companies. For example, the well-known crypto hedge fund Three Arrows Capital defaulted on a loan in the amount of more than $670 million. Problems in the crypto market arose after the factors supporting it earlier changed dramatically at the beginning of this year. Most likely, if central banks continue to tighten policies and trigger a stagflation, the market will collapse further. This is why many are closely monitoring the data on inflation, as well as business activity indices in Europe and the United States. Forecasts for today:     USD/JPY The pair is trading upwards, thanks to lower market tensions and growing risk appetite. Further increase above 135.55 will bring the pair to 136.65.     XAU/USD Spot gold is consolidating in the range of 1820.30-1845.20. There is a high chance that it will remain trading within these levels until the end of this week.   Read more: https://www.instaforex.eu/forex_analysis/314713

Relevance up to 13:00 2022-06-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The USD/JPY pair is slowly but consistently developing the upward offensive, intending to gain a foothold in the area of the 136th figure. Over the course of three trading days, the price is gradually growing, overcoming intermediate resistance levels. And it looks like this trend will continue in the medium term. The US currency is the main engine of growth for USD/JPY, despite the fact that it is under general background pressure. The US dollar index is stuck in the middle of the 103rd figure after falling from 105.55. That is why the pair is growing rather slowly, with impressive intraday pullbacks.     The demand for the greenback has been falling for two main reasons. First, the market saw signs of a slowdown in inflation growth in the US. The reason for such conclusions was the June index of consumer confidence, which is calculated by the University of Michigan. It collapsed to 50 points, while in May it was at 58.4 points. After this release, the dollar came under pressure, while the S&P 500 index showed the highest increase since May 2020. The second reason for the general weakening of the greenback is the indecisive position of Federal Reserve Chair Jerome Powell regarding the prospects for tightening monetary policy. After all, the above inflation report should be viewed precisely through the prism of the position of Powell, who has not yet decided on the pace of interest rate increases. After his recent speech in Congress, the dollar lost its position, retreating from its reached highs. The de facto dollar rally ended after Powell did not defend the "ultra-hawkish" scenarios. On the one hand, the head of the Fed made it clear that the regulator will maintain a hawkish course, continuing to raise the interest rate until it breaks the inflation growth. But on the other hand, he stressed that "the pace of further rate increases will continue to depend on incoming data and changing economic conditions: the Committee will make a decision from meeting to meeting." This phrase can be interpreted unambiguously: the further pace of monetary tightening will depend on the dynamics of key inflation indicators, such as the consumer price index and PCE. The latest release of the CPI showed that inflation does not even think of slowing down: after a two-month decline, the index resumed its growth again, updating 40-year highs (after this release, the Fed raised the rate by 75 points, provoking a stronger dollar). As for the base price index for personal consumption expenditures in the US (PCE), now we can only use April data, while the report for May will be published on Thursday. Given the market reaction to the consumer confidence index from the University of Michigan, it can be assumed that PCE will provoke increased volatility for all dollar pairs, including USD/JPY. But note that while the greenback in the main pairs of the major group is losing its positions, the USD/JPY pair is slowly but still creeping up. In my opinion, this anomaly is explained by the divergence of the rates of the Fed and the Bank of Japan, which will persist regardless of the degree of Jerome Powell's hawkishness. As you know, the US Federal Reserve is now facing a choice: to raise interest rates in July by 50 or by 75 points. The Japanese regulator does not have such a dilemma: despite the growth of inflation indicators, the Bank of Japan decided to adhere to an accommodative monetary policy—"to support the economy." Moreover, representatives of the Japanese Central Bank, at every opportunity, declare that they are ready to soften the parameters of monetary policy, "if necessary." For this reason, the USD/JPY pair demonstrates an upward trend. The price goes up, albeit with deep corrective pullbacks. If we look at the MN timeframe, we can see that since March the pair has grown by more than 2,000 points. At the same time, there is no consensus in the market on where the pair will eventually end up. In June, the price renewed its 24-year high, so it is quite difficult to talk about any borders and "red lines." For example, according to currency strategists at Societe Generale, the pair will rise first to 138, then to 141. Westpac economists expect the pair to reach 137 in the near term. In turn, Rabobank experts say that there is a high probability that the pair will reach 140 in the short term. In my opinion, in the foreseeable future, it is necessary to consider more mundane targets. The first of them is 136.72 (a 24-year high, which was updated on June 22). The main target (in the medium term) is 137.70 (the upper line of the Bollinger Bands indicator on the D1 timeframe).   Read more: https://www.instaforex.eu/forex_analysis/314731

Relevance up to 15:00 2022-06-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Red lines- bearish RSI divergence Blue line- resistance trend line USDJPY trend remains bullish as price continues making higher highs and higher lows. Price is soon expected to make new higher highs towards 137.10 but bulls need to be very cautious. In previous posts we warned that the bearish divergence in the RSI is a warning that the up trend is weakening. Support at 134.60-135 has been held so far and price is moving higher. Price has the potential to reach the blue resistance trend line at 137-137.20. However it seems very possible to see also a new bearish divergence combined with the new higher high. This is not a reversal signal but only a warning that the reversal is getting close. Bulls need to protect their gains.   Read more: https://www.instaforex.eu/forex_analysis/282261

Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In the middle of this month, USD/JPY broke a multi-year high and 135.19, reached in January 2002, and today the pair continues to develop an upward momentum. In our previous reviews, we assumed that the divergence in the monetary policy rates of the Fed and the Bank of Japan is likely to increase, creating prerequisites for further growth of USD/JPY. In this case, the pair will head towards multi-year highs near 135.00, reached in January 2002. Our forecast was fully justified, and the set targets (Buy Stop 125.50. Stop Loss 124.40. Take-Profit 125.65, 126.00, 127.00, 128.00, 134.00, 135.00) were achieved. Moreover, the price rewrote the multi-year high of 135.19 and hit a new all-time high of 136.70 last week.     USD/JPY is currently trading near 136.50, with potential for further gains. There is a strong upward momentum, fueled by increasing divergence in the direction of the monetary policies of the Fed and the Bank of Japan. The breakdown of the local high at 136.70 will be a signal to increase long positions. In an alternative scenario, the signal for short-term sales will be a breakdown of the support level of 135.19 (local support level and 200 EMA on the 1-hour chart).     In this case, the downward correction may continue to the support level of 132.37 (200 EMA on the 4-hour chart) and even lower to the support level of 131.00 (local highs, 50 EMA and the lower line of the rising channel on the daily chart), where pending buy orders can be placed. A deeper decline is unlikely. Volatility in the market and in USD/JPY quotes may sharply increase again today at 12:30 and 13:00 (GMT).     In the main scenario, we expect continued growth. Support levels: 136.00, 135.19, 132.37, 131.00, 126.55, 124.20, 121.65 Resistance levels: 136.70, 137.00 Trading Tips Buy Stop 136.55. Stop Loss 135.70. Take-Profit 136.70, 137.00, 138.00, 139.00, 140.00 Sell Stop 135.70. Stop Loss 136.55. Take-Profit 135.19, 132.37, 131.00   Read more: https://www.instaforex.eu/forex_analysis/314851

Relevance up to 14:00 2022-07-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Red lines- bearish RSI divergence Green line -support trend line USDJPY is trading around 138.65. Price continues trading inside the upward sloping wedge pattern respecting the upward sloping green trend line. Support is found at 137.85 and as long as price is above this level, we expect price to continue making higher highs and higher lows. USDJPY is close to ending the up trend. So far we got warning signals of a weakening up trend. Once the green support trend line is broken, we will get a reversal signal. Support is key at 137.20-137.85. USDJPY current technical picture justifies a pull back towards 130-127.   Read more: https://www.instaforex.eu/forex_analysis/285471

Relevance up to 08:00 2022-08-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Positive sentiment ruled over markets on Monday, as a result of which stock indices in Asia and Europe rose. Dynamics in the US, meanwhile, was quite ambiguous. After the release of strong data on US employment and average wages last Friday, markets began to doubt if the Fed will soften its stance on monetary policy. This led to a sharp increase in dollar demand, as well as mixed dynamics in markets, primarily in the US. The better-than-expected figures allow the Fed to continue raising rates without the fear of a weakening labor market. This, of course, is negative for stock markets. Nevertheless, investors are now focused on the upcoming US inflation report tomorrow, which could indicate whether the Fed will raise rates further or not. If the data turns out to be in line with the forecast and shows a corrective decline in annual terms from 9.1% to 8.7%, and a slowdown from 1.3% to 0.2% on a monthly basis, it is likely that the central bank will remain on its previous position, that is, a pause in rate hikes in August then a sharp decline to 0.25% in the next months. This will be taken as good news by markets, possibly leading to a new, but limited rally. If the value of inflation falls even more, expect a more vigorous increase in positive sentiment. But if inflation continues to increase, sell-offs will escalate, while dollar will rise even more. This is because the Fed will most likely continue its aggressive rate hike. In other words, a slowdown in inflationary pressure, or even a slight decrease, will put pressure on dollar and increase risk appetite. Further pressure, meanwhile, will raise dollar and push down stocks and other assets. Forecasts for today:     AUD/USD The pair is trading above the support level of 0.6965. Further selling pressure could lead to a local fall to 0.6870. USD/JPY The pair is below 135.15. But increased buying pressure will push the quote to 136.25. Read more: https://www.instaforex.eu/forex_analysis/318414

Relevance up to 04:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Stock market - S&P 500, China A50, Nikkei 225 Stock markets are not yet paying attention to a new wave of fears about the global recession, which was caused by yesterday's data on the Chinese economy. In July, Chinese industrial production reduced the rise from 3.9% y/y to 3.8% y/y, retail sales decreased from 3.1% y/y to 2.7% y/y, the base rate of the NBC was reduced from 3 .70% to 2.75%. Despite the friendly fall in European currencies, the S&P 500 stock index rose by 0.40%, today China A50 adds 0.37% in the Asian session, the Japanese Nikkei 225 adds a symbolic 0.03%.   Possible scenario - USD/JPY As a result, amid the growth of the dollar and stock markets, we are waiting for the USD/JPY pair to move up to the nearest target of 134.26 - to the embedded line of the price channel of the monthly timeframe. Consolidating above the level may extend the growth to the target of 136.02 - to the upper line of the price channel. Federal Reserve We believe that at some point investors will begin to withdraw from risk as the Federal Reserve meeting on September 21 approaches, but for now, time makes it possible to follow these sentiments amid a rising market.   The price is above the MACD indicator line on the 4-hour chart, but Marlin is in negative territory both here and on the daily chart. Therefore, we also have in mind an alternative scenario - consolidating under the MACD line, below the level of 132.67, then leaving the area under the support of 132.18, and further development of the downward movement with the target of 129.40.   Read more: https://www.instaforex.eu/forex_analysis/318971

Summary:  Weak data out of China overnight, together with a surprise rate cut from the PBOC and collapsing energy prices later on Monday saw the Japanese yen surging higher across the board. Indeed, the two key factors behind its descent to multi-decade lows earlier this year, rising yields and surging energy prices, have eased considerably since mid-June with only modest reaction from the yen thus far. Is that about to change? FX Trading focus: JPY finding sudden support on new disinflation narrative Weaker than expected Chinese data overnight brought a surprise rate cut from the Chinese central bank and seems to have sparked a broadening sell-off in commodities, which was boosted later by a crude oil drop of some five dollars per barrel on the news that Iran will decide by midnight tonight on whether to accept a new draft on the nuclear deal forward by the Euro zone. In response, the Chinese yuan has weakened toward the highs for the cycle in USDCNH, trading 6.78+ as of this writing and  (there was a spike high to 6.381 back in May but the exchange rate has been capped by 6.80 since then), but the Japanese yen is stealing the volatility and strength crown, surging sharply across the board and following up on the move lower inspired by the soft US CPI data point. US long yields easing considerably lower after an odd spike last Thursday are a further wind at the JPY’s back here. In the bigger picture, it has been rather remarkable that the firm retreat in global long-date yields since the mid-June peak and the oil price backing down a full 25% and more from the cycle highs didn’t do more to support the yen from the yield-spread angle (Bank of Japan’s YCC policy less toxic as yields fall) and from the current account angle for Japan. Interestingly, while the JPY has surged and taken USDJPY down several notches, the US dollar is rather firm elsewhere, with the focus more on selling pro-cyclical and commodity currencies on the possible implication that China may be content to export deflation by weakening its currency now that commodity prices have come down rather than on selling the US dollar due to any marking down of Fed expectations. Still, while the USD may remain a safe haven should JPY volatility be set to run amok across markets, the focus is far more on the latter as long as USDJPY is falling Chart: EURJPY As the JPY surges here, EURJPY is falling sharply again, largely tracking the trajectory of longer European sovereign yields, which never really rose much from their recent lows from a couple of weeks back, making it tough to understand the solid rally back above 138.00 of late. After peaking above 1.90% briefly in June, the German 10-year Bund, for example, is trading about 100 basis points lower and is not far from the cycle low daily close at 77 basis points. The EURJPY chart features a rather significant pivot area at 133.50, a prior major high back in late 2021 and the recent low and 200-day moving average back at the beginning of the month. After a brief JPY volatility scare in late July and into early August that faded, are we set for a second and bigger round here that takes USDJPY down through 130.00 and EURJPY likewise? A more significant rally in long US treasuries might be required to bring about a real JPY rampage. Source: Saxo Group The focus on weak Chinese data and key commodity prices like copper suddenly losing altitude after their recent rally has the Aussie shifting to the defensive just after it was showing strength late last week in sympathy with strong risk sentiment and those higher commodity prices. Is the AUDUSD break above 0.7000-25 set for a high octane reversal here? AUDJPY is worth a look as well after it managed to surge all the way back toward the top of the range before. The idea that a weak Chine might export deflation from here might be unsettling for Aussie bulls. The US macro data focus for the week is on today’s NAHB homebuilder’s survey, which plunged to a low since 2015 in June (not including the chaotic early 2020 pandemic breakout months), the July Housing Starts and Building Permits and then the July Retail Sales and FOMC minutes on Wednesday. With a massive relief in gasoline prices from the July spike high, it will be interesting to see whether the August US data picks up again on the services side. The preliminary August University of Michigan sentiment survey release on Friday showed expectations rising sharply by over 7 points from the lowest since-1980 lows of June, while the Present Situation measure dropped a few points back toward the cycle (and record) lows from May. Table: FX Board of G10 and CNH trend evolution and strength. The JPY is the real story today, but as our trending measures employ some averaging/smoothing, the move will need to stick what it has achieved today to show more. Watch out for a big shift in the commodity currencies in coming days as well if today’s move is the start of something. Elsewhere, the JPY comeback is merely taking CHF from strength to strength, although even the might franc has dropped against the JPY today. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Big momentum shift afoot today and watching whether this holds and the JPY pairs and pairs like AUDUSD and USDCAD to see if we are witnessing a major momentum shift in themes here. Also note NOK pairs like USDNOK and EURNOK here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Aug. NAHB Housing Market Index 0130 – Australia RBA Meeting Minutes Source: FX Update: JPY jumps on deflating energy prices, fresh retreat in yields.

Relevance up to 13:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: USD/JPY has been trading upside this morning and I found the breakout of the mini channel, which is good sign for further upside movement. Trading recommendation: Due to the breakout of the mini bullish flag pattern, I see further rally towards next upside reference points. Watch for potential buying opportunities on the intraday dips with the upside objectives at 135.40 and 137.40. MACD oscillator is showing bullish reading and start of the new up momentum. Key support is set at the price of 132.60 Read more: https://www.instaforex.eu/forex_analysis/288678

Summary:  Equities traded higher still yesterday as treasury yields fell further back into the recent range and on hopes that an Iran nuclear deal will cement yesterday’s steep drop in oil prices. The latest data out of the US was certainly nothing to celebrate as the July US Homebuilder survey showed a further sharp drop in new housing interest and a collapse in the first regional US manufacturing survey for August, the New York Fed’s Empire Manufacturing.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their gains yesterday getting closer to the 200-day moving average sitting around the 4,322 level. The US 10-year yield seems well anchored below 3% and financial conditions indicate that S&P 500 futures could in theory trade around 4,350. The news flow is light but earnings from Walmart later today could impact US equities should the largest US retailer lower their outlook for the US consumer. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hong Kong and mainland Chinese equities were mixed. CSI300 was flat, with electric equipment, wind power, solar and auto names gained. Hang Seng Index declined 0.5%. Energy stocks fell on lower oil price. Technology names were weak overall, Hang Seng TECH Index (HSTECH.I) declined 0.9%. Sunny Optical (02382:xhkg) reported worse than expected 1H22 results, revenues -14.4% YoY, net profits -49.5%, citing weakening component demand from the smartphone industry globally. The company’s gross margin plunged to 20.8% from 24.9%. Li Auto’s (02015:xhkg/LI:xnas) Q2 results were in line with expectations but Q3 guidance disappointed. The launch L9 seems cannibalizing Li ONE sales. USD: strength despite weak US data and falling treasury yields and strong risk sentiment Yesterday, the JPY tried to make hay on China cutting rates and as global yields eased back lower, with crude oil marked several dollars lower on hopes for an Iran nuclear deal. But the move didn’t stick well in USDJPY, which shrugged off these developments as the USD firmed further across the board, despite treasury yields easing lower, weak data and still strong risk sentiment/easy financial conditions. A strong US dollar is in and of itself is a tightening of financial conditions, however, and yesterday’s action has cemented a bullish reversal in some pairs, especially EURUSD and GBPUSD, where the next important levels pointing to a test of the cycle lows are 1.0100 and 1.2000, respectively. Elsewhere, USDJPY remains in limbo (strong surge above 135.00 needed to suggest upside threat), USDCAD has posted a bullish reversal but needs 1.3000 for confirmation, and AUDUSD is teetering, but needs a close back below 0.7000 to suggest a resurgent US dollar and perhaps widening concerns that a Chinese recession will temper interest in the Aussie. Crude oil Crude oil (CLU2 & LCOV2) trades lower following Monday’s sharp drop that was driven by a combination softer economic data from China and the US, the world’s top consumers of oil, and after Iran signaled a nuclear deal could be reached soon, raising the prospect of more Iranian crude reaching the market. The latest developments potentially reducing demand while adding supply forced recently established longs to bail and short sellers are once again in control. Brent needs to hold support at $93 in order to avoid further weakness towards $90. Focus on Iran news. Copper Copper (COPPERUSSEP22) led the metals pack lower, without breaking any key technical levels to the downside, after China’s domestic activity weakened in July. Meanwhile, supply side issues in Europe also cannot be ignored with surging power prices putting economic pressure on smelters, and many of them running at a loss. HG copper jumped 19% during the past month and yesterday’s setback did not challenge any key support level with the first being around $3.50/lb. BHP, the world’s top miner meanwhile hit record profits while saying that China is likely to offer a “tail wind” to global growth (see below). EU power prices hit record high on continued surge in gas prices ... threatening a deeper plunge into recession. The latest surge being driven by low water levels on Europe’s rivers obstructing the normal passage for diesel, coal, and other fuel products, thereby forcing utilities to use more gas European Dutch TTF benchmark gas futures (TTFMU2) has opened 5% higher at €231/MWh, around 15 times higher than the long-term average, suggesting more pain ahead for European utility companies. Next-year electricity rates in Germany (DEBYF3) closed 3.7% higher to 477.50 euros ($487) a megawatt-hour on the European Energy Exchange AG. That is almost six times as much as this time last year, with the price doubling in the past two months alone. UK power prices were also seen touching record highs. US Treasuries (IEF, TLT) see long-end yields surging. Yields dipped back lower on weak US economic data, including a very weak Empire Manufacturing Survey (more below) and another sharp plunge in the NAHB survey of US home builders, suggesting a rapid slowdown in the housing market. The survey has historically proven a leading indicator on prices as well. The 10-year benchmark dipped back further into the range after threatening to break up higher last week. The choppy range extends down to 2.50% before a drop in yields becomes a more notable development, but tomorrow’s US Retail Sales and FOMC minutes offer the next test of sentiment. What is going on? Weak Empire State manufacturing survey and NAHB Index Although a niche and volatile measure, the United States NY Empire State Manufacturing Index, compiled by the New York Federal Reserve, fell to -31.3 from 11.1 in July, its lowest level since May 2020 and its sharpest monthly drop since the early days of the pandemic. New orders and shipments plunged, and unfilled orders also declined, albeit less sharply. Other key areas of concern were the rise in inventories and a decline in average hours worked. This further weighed on the sentiment after weak China data had already cast concerns of a global growth slowdown earlier. Meanwhile, the US NAHB housing market index also saw its eighth consecutive monthly decline as it slid 6 points to 49 in August. July housing starts and building permits are scheduled to be reported later today, and these will likely continue to signal a cooling demand amid the rising mortgage rates as well as overbuilding. China's CATL plans to build its second battery factory in Europe CATL unveiled plans to build a renewable energy-powered factory for car battery cells and modules in Hungary. It will invest EUR 7.34 billion (USD 7.5bn) on the 100-GWh facility, which will be its second one in Europe. To power the facility CATL will use electricity from renewable energy source, such as solar power. At present, CATL is in the process of commissioning its German battery production plant, which is expected to roll out its first cells and modules by the end of 2022. Disney (DIS) shares rise on activist investor interest Daniel Loeb of Third Point announced a significant new stake in Disney yesterday, helping to send the shares some 2.2% higher in yesterday’s session. The activist investor recommended that the company spin off its ESPN business to reduce debt and take full ownership of the Hulu streaming service, among other moves. Elliott exits SoftBank Group The US activist fund sold its stake in SoftBank earlier this year in a sign that large investors are scaling back on their investments in technology growth companies with long time to break-even. In a recent comment, SoftBank’s founder Masayoshi Son used more cautious words regarding the investment company’s future investments in growth companies. BHP reports its highest ever profit, bolstered by coal BHP posted a record profit of $21.3bn supported by considerable gains in coal, nickel and copper prices during the fiscal year ending 30 June 2022. Profits jumped 26% compared to last year’s result. The biggest driver was a 271% jump in the thermal coal price, and a 43% spike in the nickel price. The world’s biggest miner sees commodity demand improving in 2023, while it also sees China emerging as a source of stable commodity demand in the year ahead. BHP sees supply covering demand in the near-term for copper and nickel. According to the company iron ore will likely remain in surplus through 2023. In an interview Chief Executive Officer Mike Henry said: Long-term outlook for copper, nickel and potash is really strong because of “unstoppable global trends: decarbonization, electrification, population growth, increasing standards of living,” What are we watching next? Australia Q2 Wage Index tonight to determine future RBA rate hike size? The RBA Minutes out overnight showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, tonight sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35 bps move. RBNZ set to decelerate its guidance after another 50 basis point move tonight? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 44 bps for the October meeting after tonight’s 50 bps hike and another 36 bps for the November meeting. US retailer earnings eyed After disappointing results last quarter, focus is on Walmart and Home Depot earnings later today. These will put the focus entirely on the US consumer after the jobs data this month highlighted a still-tight labor market while the inflation picture saw price pressures may have peaked. It would also be interesting to look at the inventory situation at these retailers, and any updated reports on the status of the global supply chains.   Earnings to watch Today’s US earnings focus is Walmart and Home Depot with analysts expecting Walmart to report 7% revenue growth y/y and 8% decline y/y in EPS as the US retailer is facing difficulties passing on rising input costs. Home Depot is expected to report 6% growth y/y in revenue and 10% growth y/y in EPS as the US housing market is still robust driving demand for home improvement products. Sea Ltd, the fast-growing e-commerce and gaming company, is expected to report revenue growth of 30% y/y in Q2 but worsening EBITDA margin at -16.2%. The previous winning company is facing headwinds in its gaming division and cash flow from operations have gone from positive $318mn in Q1 2021 to negative $724mn in Q1 2022. Today: China Telecom, Walmart, Agilent Technologies, Home Depot, Sea Ltd Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Germany Aug. ZEW Survey 0900 – Eurozone Jun. Trade Balance 1200 – Poland Jul. Core CPI 1215 – Canada Jul. Housing Starts 1230 – US Jul. Housing Starts and Building Permits 1230 – Canada Jul. CPI 2030 – API Weekly Report on US Oil Inventories 2350 – Japan Jul. Trade Balance 0130 – Australia Q2 Wage Index 0200 – New Zealand RBNZ Official Cash Rate announcement 0300 – New Zealand RBNZ Governor Orr Press Conference  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – August 16, 2022

Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   Since the beginning of the year, the dollar has gained more than 10% against the yen. However, now the alignment of forces is beginning to quietly but surely change in favor of the JPY. How and why can the yen take the lead? The dollar is still on the horse The main growth trigger for the USD/JPY pair this year was the monetary divergence. While the US Federal Reserve is actively fighting inflation by raising interest rates, its Japanese counterpart continues to go the dovish route.The bearish yen peaked in mid-July. Back then, on expectations of a more hawkish Fed policy, USD/JPY jumped to a new 24-year high of 139. Many experts predicted that a further increase in the difference in interest rates between the US and Japan would allow the asset to rise above the level of 140. But this did not happen. On the contrary, since reaching its July low, the Japanese yen has managed to strengthen against the dollar by 3%. It was strongly supported by the latest US inflation report. Recall that in July, inflationary pressure in the US eased significantly. This provoked speculation about a possible slowdown in the rate hike by the Fed. However, most Fed officials are still in favor of continuing the aggressive course. This keeps US Treasury yields high and fuels the dollar. Yesterday, the yield on 10-year US bonds rose to 2.82%, while the greenback index updated a 3-week high, reaching 106.94. The figures rose ahead of today's release of the minutes of the meeting of the Federal Open Market Committee. Investors expect to see hints of a 75 bps rate hike in the FOMC minutes in September. Against this backdrop, the USD/JPY pair showed a spectacular rise on Tuesday, soaring to 134. Compared to the low of 131.73 reached on August 11, the asset rose by 1.7%.     Obvious-incredible: the yen will rise Despite the current weakness of the Japanese currency against the dollar, some analysts believe that the JPY will begin to gradually gain strength in the near future. The fact that the yen now has a good growth potential is evidenced by its impressive dynamics in other currency pairs. Thus, against the euro, the exchange rate of the yen jumped by almost 6% from its June low - a mark of 144. And against the British pound, the yen has grown since the beginning of August by about 4%. "The yen's selling momentum is clearly waning from its peak," said currency strategist Yukio Ishizuki. – Of course, we are not yet seeing a massive move to buying JPY, but we see that it is becoming increasingly difficult for traders to stick to the strategy of short positions in the yen. The latest data from the Commodity Futures Trading Commission showed that leveraged investors cut their net bearish bets on the Japanese currency to the lowest level since March last year. All this indicates that the worst for the yen seems to be over. Just ahead is an ascent in relation to many currencies, including the dollar. Recall that on June 21, the trade-weighted yen index bottomed out. Since then, the JPY has been able to rise against 8 of its peers from the group of 10. "This is a sign that the recovery in the yen may be more than just a reaction to the recent narrowing of the gap between US and Japanese bond yields," writes Bloomberg. According to analysts of the release, the main catalyst for the yen's growth now is the growing fears about the slowdown in global economic growth. The risk of a global recession amid a deep energy crisis in Europe increases the appeal of safe assets, which traditionally include the Japanese currency. Bloomberg analysts believe that the level of bull confidence in the yen could be even more stable if the JPY managed to strengthen more against the Australian dollar. Since June 21, the yen has risen only 1% against the aussie. Meanwhile, a further decline in commodity prices due to fears of a slowdown in the global economy could undermine the position of the Australian currency. In this case, the yen index is likely to begin a convincing increase, as a result of which a bullet will be put in the USD/JPY rally.   Read more: https://www.instaforex.eu/forex_analysis/319152

Relevance up to 09:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   USD/JPY: The chart shows the movement of USD/JPY in the four-hour (H4) chart. Comparing the recent movement to that of July 16, July 27 and August 4's, it is clear that the pair is in protracted correction, which will end when the quotes reach the resistance level of Y135.00 per $1. A breakdown of the resistance level will cancel the trend reversal. Good luck! Read more: https://www.instaforex.eu/forex_analysis/319138

The struggling Japanese yen is in negative territory for a fourth straight day. In the European session, USD/JPY is trading at 136.71, up 0.61%. Japanese Core CPI hits 14-year high Japan’s core inflation continued to accelerate, with a gain of 2.4% YoY in July. This matched the forecast and was higher than the 2.2% reading in June. The reading is significant as it is the highest inflation level since 2008 and is the fourth straight month where inflation has exceeded the Bank of Japan’s target of 2%. For years, Japan grappled with deflation, which resulted in fiscal and monetary policy with an accommodative stance. The world has changed dramatically since the Russian invasion of Ukraine, however, which has set off a massive rise in inflation. Japan’s inflation rate is nowhere near those in the US or the UK, but nevertheless, higher inflation has forced the BoJ to explain why it is not tightening policy. Governor Kuroda has repeatedly stated that the BoJ’s number one priority is to stimulate weak growth, and he has vigorously defended a cap on JGB yields. Kuroda has argued that inflation is not being driven by strong domestic demand, but rather by higher import prices due to the surge in wheat and oil prices. Until wage growth strengthens, which would point to broad-based inflation, we can expect “business as usual’ from the BoJ. The price for the BoJ’s ultra-accommodative stance has been the sharp depreciation of the yen, which hit 140 in July, its lowest level since 1998. If inflation’s upward trend continues and CPI hits 3%, the BoJ may have to reconsider whether to make changes to policy. USD/JPY Technical There is resistance at 1.3744 and 139.30 135.46 has switched to support, followed by 1.3350   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen slide continues as inflation rises - MarketPulseMarketPulse

Summary:  The USD is breaking higher still, with important levels falling versus the Euro and yen yesterday. But the pain in sterling is most intense as presaged by the lack of a response to surging UK rates. Can the Bank of England do anything but continue to chase inflation from behind, caught between the Scylla of inflation and the Charybdis of a vicious recession? Also, USDCNH lurks at the top of the range ahead of another PBOC rate announcement on Monday. FX Trading focus: USD wrecking ball swinging again. UK faced with classic ugly choice between taking the pain via inflation or a severe recession The US dollar strength has picked up further after yesterday saw the breakdown in EURUSD below 1.0100 and a shot through 135.50 in USDJPY as longer US yields pushed to local highs. GBPUSD has been a bigger move on sterling weakness as discussed below.  A bit of resilient US data (especially the lower jobless claims than expected and a sharp revision lower of the prior week’s data taking the momentum out of the rising trend) has helped support the USD higher as longer US yields rose a bit further, taking the 10-year US treasury yield benchmark to new local highs, although we really need to see 3.00% achieved there after a few recent teases higher with no follow through higher. Looking forward to next week, the market will have to mull whether it has been too aggressive in pricing the Fed to pivot policy next year on disinflation and an easy-landing for the economy. The steady drumbeat of Fed pushback against the market’s complacency, together with a few of the recent data points (ISM Services, nonfarm payrolls, yesterday’s claims, etc.) has seen some of the conviction easing. But the key test will come next Friday, when Fed Chair Powell is set to speak on the same day we get the July PCE inflation data. Keep USDCNH on the radar through the end of today on the risk of an upside break above the range and Monday as the PBOC is set for a rate announcement (consensus expectations or another 10 bps of easing).   Chart: GBPUSD Lots at stake for sterling as discussed below, as it is a bit scary to see a currency weaken sharply despite a massive ratcheting higher in rate expectations from the central bank. The fall of 1.2000 has set in motion a focus on the 1.1760 cycle low, with an aggravated USD rise here and tightening of global financial conditions possibly quickly bringing the spike low toward 1.1500 from the early 2020 pandemic outbreak panic into focus. It is worth noting that the lowest monthly closing level for GBPUSD since the mid-1980’s is 1.2156. Without something dramatic to push back against USD strength next week from Jackson Hole, it is hard to see how this month may set the new low water mark for monthly closes. Source: Saxo Group GBPUSD slipped below 1.1900 this morning after breaking below the psychologically important 1.2000 level yesterday. As noted in the prior update, it’s remarkable to see the marked weakness in sterling despite the marking taking UK short rates sharply higher – with 2-year UK swaps over 100 basis points higher from the lows early this month. The Bank of England has expressed a determination to get ahead of the inflation spike and the market has priced in a bit more than a 50-basis-points-per-meeting pace for the three remaining BoE meetings of 2022. But is that sufficient given the UK’s structural short-comings and external deficits? Currency weakness risks adding further to spike in inflation this year. The BoE can take a couple of approaches in response: continue with the 50 bps hikes while bemoaning the backdrop and trotting out the expectation that eventually, economic weakness and easing commodity prices will feed through to drop inflation back into the range. Or, the BoE can actually get serious and super-size hikes even beyond the acceleration the market has priced, at the risk of bringing forward and increasing the severity of the coming recession. Until this week, the BoE’s anticipated tightening trajectory had prevented an aggravated weakness in sterling in broader terms, but the currency’s weakness despite a massive mark-up of BoE expectations has ratcheted the pressure on sterling and the BoE’s response to an entirely new level. Turkey shocked with a fresh rate cut yesterday of 100 basis points to take the policy rate to 13.00%. This with year-on-year inflation in Turkey at 79.6% and PPI at 144.6%, and housing measured at 160.6%. The move took USDTRY above 18.00, though it was a modest move relative to the size of the surprise. Turkish central bank chief Kavcioglu said that the bank would also look to “further strengthen macroprudential policy” by addressing the yawning difference between the policy rate and the rate commercial banks are charging for loans (more than double the official policy rate), as the push is to continue a credit-stimulated approach, inflation-be-darned.   Table: FX Board of G10 and CNH trend evolution and strength Note: a new color scheme for the FX Board! Besides changing the green for positive readings to a more pleasant blue, I have altered the settings such that trend readings don’t receive a more intense red or blue coloring until they have reached more significant levels – starting at an absolute value of 4 or higher. So far, most of the drama in sterling is the lack of a response to shifts in the UK yield curve, the broad negative momentum has only shifted a bit here, but watching for the risk of more. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs AUDNZD is crossing back higher, AUDCAD back lower, so NZDCAD….yep. Note the CNHJPY – if CNH is to make more waves, need to see more CNH weakness in an isolated sense, not just v. a strong USD. And speaking of a strong USD, the last holdouts in reversing, USDNOK and USDCHF, are on the cusp of a reversal. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – Canada Jun. Retail Sales 1300 – US Fed’s Barkin (Non-voter) to speak   Source: FX Update: USD surging again, GBP spinning into abyss

Overview:  The dollar is on fire. It is rising against all the major currencies and cutting through key technical levels like a hot knife in butter. The Canadian dollar is the strongest of the majors this week, which often outperforms on the crosses in a strong US dollar environment. It is off 1.5% this week. The New Zealand dollar, where the RBNZ hiked rates this week by 50 bp, is off the most with a 3.5% drop. Emerging market currencies are mostly lower on the day and week as well. The JP Morgan Emerging Market Currency Index is off for the fifth consecutive session, and ahead of the Latam open, it is off 2.1% this week. Asia Pacific equities were mostly lower, and Europe’s is off around 0.4%. It was flat for the week coming into today. US futures are lower, and the S&P and NASDAQ look poised to snap its four-week advance. Gold, which began the week near $1800 is testing support near $1750 now. Next support is seen around $1744.50. October WTI is consolidating in the upper end of yesterday’s range, which briefly poked above $91. Initial support is pegged near $88. US natgas is softer for the third successive session, but near $9.04 is up about 3.2% for the week. Europe’s benchmark is up 1.7% and brings this week’s gain to almost 20%. Demand concerns weigh on iron ore. It was off marginally today, its fifth loss in six sessions. It tumbled 8.8% this week after a 1.15% gain last week. Copper is up fractionally after rising 1.3% yesterday. September wheat is trying to stabilize. It fell more than 4% yesterday, its fifth loss in a row. It is off around 8.5% this week. Asia Pacific Japan's July CPI continued to rise  Th headline now stands at 2.6%, up from 2.4% in June, up from 0.8% at the start of the year and -0.3% a year ago. The core measure that excludes fresh food accelerated from 2.2% to 2.4%. It is the fourth consecutive month above the 2% target. Excluding both fresh food and energy, Japan's inflation is less than half the headline rate at 1.2%. It was at -0.7% at the end of last year and did not turn positive until April. The BOJ's next meeting is September 22, and despite the uptick in inflation, Governor Kuroda is unlikely to be impressed. Without wage growth, he argues, inflation will prove transitory. With global bond yields rising again, the 10-year, the market may be gearing up to re-challenge the BOJ's 0.25% cap. The yield is finishing the week near 0.20%, its highest since late July. Separately, we note that after divesting foreign bonds in recent months, Japanese investors have returned to the buy side. They have bought foreign bonds for the past four weeks, according to Ministry of Finance data. Last week's JPY1.15 trillion purchases (~$8.5 bln) were the most since last September.  China surprised the markets to begin the week with a 10 bp reduction in the benchmark 1-year medium-term lending facility rate  It now stands at 2.75%. It was the first cut since January, which itself was the first reduction since April 2020. Before markets open Monday, China is expected to announce a 10 bp decline in the 1- and 5-year loan prime rates. That would bring them to 3.60% and 4.35%, respectively. These rates are seen closer to market rates, but the large banks that contribute the quotes are state-owned. There is some speculation that a larger cut in the 5-year rate. The one-year rate was cut in January, but the 5-year rate was cut by 15 bp in May. The dollar is rising against the yen for the fourth consecutive session  It has now surpassed the JPY137.00 area that marks the (61.8%) retracement of the decline from the 24-year high set-in mid-July near JPY139.40. There may be some resistance in the JPY137.00-25 area, but a retest on the previous high looks likely in the period ahead. The Australian dollar is off for the fifth consecutive session and this week's loss of 3% offset last week's gain of as similar magnitude and, if sustained, would be the largest weekly decline since September 2020. The Aussie began the week near $0.7125 and recorded a low today slightly below $0.6890. The $0.6855-70 area is seen as the next that may offer technical support. The PBOC set the dollar's reference rate at CNY6.8065 (median in Bloomberg's survey was CNY6.9856). The fix was the lowest for the yuan (strongest for the dollar) since September 2020. Yesterday's high was almost CNY6.7960 and today's low was a little above CNY6.8030. To put the price action in perspective, note that the dollar is approaching the (61.8%) retracement of the yuan's rise from mid-2020 (~CNY7.1780) to this year's low set in March (~CNY6.3065). The retracement is found around CNY6.8250. Europe UK retail sales surprised to the upside but are offering sterling little support  Retail sales including gasoline rose by 0.3% in July. It is the second gain of the year and the most since last October. Excluding auto fuel, retail sales rose by 0.4%, following a 0.2% gain in June. It is the first back-to-back gain since March and April 2021. Sales online surged 4.8% as discounts and promotions drew demand, and internet retailers accounted for 26.3% of all retail sales. Separately, consumer confidence, measured by GfK, slipped lower (-44 from -41), a new record low. Sterling is lower for the third consecutive session and six of the past seven sessions. The swaps market continues to price in a 50 bp rate hike next month and about a 1-in-5 chance of a 75 bp move. Nearly every press report discussing next month's Italian elections cited the fascist roots of the Brothers of Italy, which looks likely to lead the next government  Meloni, who heads up the Brothers of Italy and has outmaneuvered many of her rivals, and may be Italy's next prime minister, plays the roots down. She compares the Brothers of Italy to the Tory Party in the UK, the Likud in Israel, and the Republican Party in the US. The party has evolved, and the center-right alliance she leads no longer wants to leave the EU, it is pro-NATO, and condemns Russia's invasion of Ukraine. The center-right alliance may come close to having a sufficient majority in both chambers to make possible constitutional reform. High on that agenda appears to transform the presidency into a directly elected office. The Italian presidency has limited power under the current configuration, but it has been an important stabilizing factor in crisis. Ironically, the president, picked by parliament, stepped in during the European debt crisis and gave Monti the opportunity to form a technocrat government after Berlusconi was forced to resign in 2011. Fast-forward a decade, a government led by the Conte and the Five Star Movement collapsed and a different Italian president gave Draghi a chance to put together a government. It almost last a year-and-half. Its collapse set the stage for next month's election. The center-left is in disarray and its inability to forge a broad coalition greases the path for Meloni and Co. Italy's 10-year premium over German is at 2.25%, a new high for the month. Last month, it peaked near 2.40%. The two-year premium is wider for the sixth consecutive session. It is near 0.93%, more than twice what it was before the Draghi government collapsed. Some critics argue against the social sciences being science because of the difficulty in conducting experiments  Still an experiment is unfolding front of us. What happens when a central bank completely loses its independence and follows dubious economic logic?  With inflation at more than two decades highs and the currency near record lows, Turkey's central bank surprised everyone by cutting its benchmark rate 100 bp to 13% yesterday. Governor Kavcioglu hinted this was a one-off as it was preempting a possible slowdown in manufacturing. Even though President Erdogan promised in June rates would fall, some observers link the rate cut to the increase in reserves (~$15 bln) recently from Russia, who is building a nuclear plant in Turkey. The decline in oil prices may also help ease pressure on Turkey's inflation and trade deficit. The lira fell to new record-lows against the dollar. The lira is off about 7.5% this quarter and about 26.4% year-to-date. Significant technical damage has been inflicted on the euro and sterling  The euro was sold through the (61.8%) retracement objective of the runup since the mid-July two-decade low near $0.9950. That retracement area (~$1.0110) now offers resistance, and the single currency has not been above $1.01 today. We had suspected the upside correction was over, but the pace of the euro's retreat surprises. There is little from a technical perspective preventing a test on the previous lows. Yesterday, sterling took out the neckline of a potential double top we have been monitoring at $1.20. It is being sold in the European morning and has clipped the $1.1870 area. The low set-in mid-July was near $1.1760, and this is the next obvious target and roughly corresponds to the measuring objective of the double top.  America With no dissents at the Fed to last month's 75 bp hike, one might be forgiven for thinking that there are no more doves  Yet, as we argued even before Minneapolis Fed President Kashkari, once regarded as a leading dove, admitted that his dot in June was the most aggressive at 3.90% for year-end, hawk and dove are more meaningful within a context. Kashkari may be more an activist that either a hawk or dove. Daly, the San Francisco Fed President does not vote this year, suggested that a Fed funds target "a little" over 3% this year would be appropriate. She said she favored a 50 bp or a 75 bp move. The current target range is 2.25%-2.50%. and the median dot in June saw a 3.25%-3.50% year-end target. St. Louis Fed President Bullard says he favors another 75 bp hike next month. No surprise there. George, the Kansas, Fed President, dissented against the 75 bp hike in June seemingly because of the messaging around it, but it's tough to call her vote for a 50 bp hike dovish. She voted for the 75 bp move in July. She recognizes the need for additional hikes, and the issue is about the pace. George did not rule out a 75 bp hike while cautioning that policy operates on a lag. Barkin, the Richmond Fed President, also does not vote this year. He is the only scheduled Fed speaker today.  The odds of a 75 bp in September is virtually unchanged from the end of last week around a 50/50 proposition.  The October Fed funds implies a 2.945% average effective Fed funds rate. The actual effective rate has been rocksteady this month at 2.33%. So, the October contract is pricing in 61 bp, which is the 50 bp (done deal) and 11 of the next 25 bp or 44% chance of a 75 hike instead of a half-point move. Next week's Jackson Hole conference will give Fed officials, and especially Chair Powell an opportunity to push back against the premature easing of financial conditions  The better-than-expected Philadelphia Fed survey helps neutralize the dismal Empire State manufacturing survey. The median from Bloomberg's survey looked for improvement to -5 from -12.3. Instead, it was reported at 6.2. Orders jumped almost 20 points to -5.1 and the improvement in delivery times points to the continued normalization of supply chains. Disappointingly, however, the measure of six-month expectations remained negative for the third consecutive month. Still, the plans for hiring and capex improved and the news on prices were encouraging. Prices paid fell to their lowest since the end of 2020 (energy?) and prices received were the lowest since February 2021. The Fed also asked about the CPI outlook. The median sees it at 6% next year down from 6.5% in May. The projected rate over the next 10-years slipped to 3%. Canada and Mexico report June retail sales today  Lift by rising prices, Canada's retail sales have posted an average monthly gain this year of 1.5%. However, after a dramatic 2.2% increase in May, Canadian retail sales are expected (median in Bloomberg' survey) to rise by a modest 0.4%. Excluding autos, retail sales may have held up better. Economists look for a 0.9% increase after a 1.9% rise in May. Through the first five months of the year, Mexico's retail sales have risen by a little more than 0.5% a month. They have risen by a 5.2% year-over-year. Economists expected retail sales to have slowed to a crawl in June and see the year-over-year pace easing to 5.0%. The greenback rose the CAD1.2935 area that had capped it in the first half of the week. It settled near CAD1.2950 yesterday and is pushing closer to CAD 1.2980 now. Above here, immediate potential extends toward CAD1.3035. The US dollar is gaining for the third consecutive session against the Canadian dollar, the longest advancing streak in a couple of months. Support is seen in the CAD1.2940-50 area. The Mexican peso is on its backfoot, and is falling for the fourth session, which ended a six-day rally. The dollar has met out first target near MXN20.20 and is approaching the 20-day moving average (~MXN20.2375). Above there, the next technical target is MXN20.32. The broader dollar gains suggest it may rise above the 200-day moving average against the Brazilian real (~BRL5.2040) and the (38.2%) of the slide since the late July high (~BRL5.5140) that is found near BRL5.2185.    Disclaimer   Source: The Dollar is on Fire

For many, this will be the last week of the summer. However, in an unusual twist of the calendar, the US August employment report will be released on September 2, the end of the following week, rather than after the US Labor Day holiday (September 5).   The main economic report of the week ahead will be the preliminary estimate of the August PMI  The policy implications are not as obvious as they may seem. For example, in July, the eurozone composite PMI slipped below the 50 boom/bust level for the first time since February 2021. It was the third consecutive decline. Bloomberg's monthly survey of economists picked up a cut in Q3 GDP forecasts to 0.1% from 0.2% and a contraction of 0.2% in Q4 (previously 0.2% growth). Over the past week, the swaps market has moved from around 80% sure of a 50 bp hike next month to a nearly 20% chance it will lift the deposit rate by 75 bp.  The UK's composite PMI fell in three of the four months through July  However, at 52.1, it remains above the boom/bust level, though it is the weakest since February 2021. The Bank of England's latest forecasts are more pessimistic than the market. It projects the economy will contract by 1.5% next year and another 0.3% in 2024. It has CPI peaking later this year at around 13% before falling to 5.5% in 2023 and 1.5% in 2024. Market expectations have turned more hawkish for the BOE too. A week ago, the swap market was pricing in a nearly 90% chance of another 50 bp hike. After the CPI jump reported in the middle of last week, the market fully priced in the 50 bp move and a nearly 30% chance of a 75 bp hike.   Japanese officials have successfully turned back market pressure that had driven the benchmark three-month implied volatility to 14% in mid-June, more than twice as high as it was at the start of the year  It slipped below 10% in recent days. The BOJ was forced to vigorously defend its 0.25% cap on the 10-year bond. It has spent the better part of the past three weeks below 0.20%. The BOJ has not had to spend a single yen on its defense since the end of June. However, with the jump in global yields (US 10-year yield rose 20 bp last week, the German Bund 33 bp, and the 10-year UK Gilt nearly 40 bp) and the weakness of the yen, the BOJ is likely to be challenged again.   The economy remains challenging  The composite PMI fell to 50.2 in July from 53.2 in June. It is the weakest reading since February. It has averaged 50.4 through July this year. The average for the first seven months last year was 49.0. The government is working on some support measures aimed at extending the efforts to cushion the blow of higher energy and food prices. Japan's Q2 GDP deflator was minus 0.4%, which was half of the median forecast in Bloomberg's survey, but it shows the tough bind of policy. Consider that the July CPI rose to 2.6%, and the core measure, which the BOJ targets, excludes fresh food, rose to 2.4% from 2.2%. The target is 2%, and it was the third month above it. Tokyo will report its August CPI figures at the end of the week.   Australia's flash PMI may be more influential as the futures market is nearly evenly split between a 25 bp hike and a 50 bp move at the September 6 central bank meeting  The minutes from the RBA's meeting earlier this month underscored its data dependency. However, this is about the pace of the move. The target rate is currently at 1.85%, and the futures market is near 3.15% for the end of the year, well beyond the 2.5% that the central bank sees as neutral. The weakness of China's economy may dent the positive terms-of-trade shock. The Melbourne Institute measure of consumer inflation expectations fell in August for the second month but at 5.9%, is still too high.  Through the statistical quirkiness of GDP-math, the US economy contracted in the first two quarters of the year  A larger trade deficit did not help, but the real problem was inventories. In fairness, more of the nominal growth resulted from higher prices than economists expected rather than underlying activity. Still, it does appear that the US economy is expanding this quarter, and the high-frequency data will help investors and economists assess the magnitude. While surveys are helpful, the upcoming real sector data include durable goods orders (and shipments, which feed into GDP models), July personal income and consumption figures, the July goods trade balance, and wholesale and retail inventories.   Consumption still drives more than 2/3 of the economy, and like retail sales, personal consumption expenditures are reported in nominal terms, which means that they are inflated by rising prices  However, the PCE deflator is expected to slow dramatically. After jumping 1% in June, the headline deflator is expected to increase by 0.1%. This will allow the year-over-year rate to slow slightly (~6.5% from 6.8%). The core deflator is forecast (median, Bloomberg's survey) to rise by 0.4%, which given the base effect, could see the smallest of declines in the year-over-year rate that stood at 4.8% in June. Given the Fed's revealed preferences when it cited the CPI rise in the decision in June to hike by 75 bp instead of 50 bp, the CPI has stolen the PCE deflator's thunder, even though the Fed targets the PCE deflator. Real consumption was flat in Q2, and Q3 is likely to have begun on firmer footing.   The softer than expected CPI, PPI, and import/export prices spurred the market into downgrading the chances of a 75 bp hike by the Fed next month  After the stronger than expected jobs growth, the Fed funds futures priced in a little better than a 75% chance of a 75 bp hike. It has been mostly hovering in the 40%-45% range most of last week but finished near 55%. It is becoming a habit for the market to read the Fed dovishly even though it is engaged in a more aggressive course than the markets anticipated. This market bias warns of the risk of a market reversal after Powell speaks on August 26.   At the end of last year, the Fed funds futures anticipated a target rate of about 0.80% at the end of this year. Now it says 3.50%. The pace of quantitative tightening is more than expected and will double starting next month. There is also the tightening provided by the dollar's appreciation. For example, at the end of 2021, the median forecast in Bloomberg's survey saw the euro finishing this year at $1.15. Now the median sees the euro at $1.04 at the end of December. And even this may prove too high.    The FOMC minutes from last month's meeting recognized two risks. The first was that the Fed would tighten too much. Monetary policy impacts with a lag, which also acknowledges that soft-landing is difficult to achieve. The market initially focused on this risk as is its wont. However, the Fed also recognized the risk of inflation becoming entrenched and characterized this risk as "significant." The Jackson Hole confab (August 25-27) will allow the Fed to help steer investors and businesses between Scylla and Charybdis.  Critics jumped all over Fed Chair Powell's claim that the Fed funds target is now in the area the officials regard as neutral. This was not a forecast by the Chair, but merely a description of the long-term target rate understood as neither stimulating nor restricting the economy. In June, all but three Fed officials saw the long-term rate between 2.25% and 2.50%. To put that in perspective, recall that in December 2019, the median view of the long-term target was 2.50%. Eleven of the 18 Fed officials put their "dot" between 2.25% and 2.50%. The FOMC minutes were clear that a restrictive stance is necessary, and the Fed clearly signaled additional rate hikes are required. The discussions at Jackson Hole may clarify what the neutral rate means.  Barring a significant downside surprise, we expect the Fed will deliver its third consecutive 75 bp increase next month. The strength and breadth of the jobs growth while price pressures remain too high and financial conditions have eased encourages the Fed to move as fast as the market allows. However, before it meets, several important high-frequency data points will be revealed, including a few employment measures, the August nonfarm payroll report, and CPI.   The market is also having second thoughts about a rate cut next year  At the end of July, the implied yield of the December 2023 Fed funds futures was 50 bp below the implied yield of the December 2022 contract. It settled last week at near an 8 bp discount. This reflects a growing belief that the Fed will hike rates in Q1 23. The March 2023 contract's implied yield has risen from less than five basis points more than the December 2022 contract to more than  20 bp above it at the end of last week.   Let's turn to the individual currency pairs, put last week's price action into the larger context, and assess the dollar's technical condition  We correctly anticipated the end of the dollar's pullback that began in mid-July, but the power for the bounce surprises. Key technical levels have been surpassed, warning that the greenback will likely retest the July highs.   Dollar Index: DXY surged by more than 2.3% last week, its biggest weekly advance since March 2020. The momentum indicators are constructive and not over-extended. However, it closed well above the upper Bollinger Band (two standard deviations above the 20-day moving average), found near 107.70. Little stands in the way of a test on the mid-July high set around 109.30. Above there, the 110-111.30 area beckons. While the 107.50 area may offer some support now, a stronger floor may be found closer to 107.00.   Euro:  The euro was turned back from the $1.0365-70 area on August 10-11 and put in a low near $1.0030 ahead of the weekend. The five-day moving average slipped below the 20-day moving average for the first time in around 3.5 weeks. The MACD is trending lower, while the Slow Stochastic did not confirm the recent high, leaving a bearish divergence in its wake. The only caution comes from the euro's push through the lower Bollinger Band (~$1.0070). Initially, parity may hold, but the risk is a retest on the mid-July $0.9950 low. A convincing break could target the $0.96-$0.97 area. As the euro has retreated, the US two-year premium over Germany has trended lower. It has fallen more than 30 bp since peaking on August 5. We find that the rate differential often peaks before the dollar.   Japanese Yen: The dollar will begin the new week with a four-day advance against the yen in tow. It has surpassed the (61.8%) retracement objective of the pullback since the mid-July high (~JPY139.40) found near JPY136.00. The momentum indicators are constructive, and the five-day moving average has crossed above the 20-day for the first time since late July. It tested the lower band of the next resistance bans seen in the JPY137.25-50 area at the end of last week. But it appears poised to re-challenge the highs. As volatility increases and yields rise, Japanese officials return to their first line of defense: verbal intervention.  British Pound: Sterling took out the neckline of a possible double top we have been monitoring that came in at $1.20. It projects toward the two-year lows set in mid-July near $1.1760, dipping below $1.18 ahead of the weekend. As one would expect, the momentum indicators are headed lower, and the five-day moving average has fallen below the 20-day moving average for the first time in four weeks. It has closed below its lower Bollinger Band (~$1.1910) in the last two sessions. A convincing break of the $1.1760 low clears the way to the March 2020 low, about 3.5-cents lower. Initial resistance is now seen around $1.1860 and, if paid, could signal scope for another 3/4 to a full-cent squeeze.  Canadian Dollar:  The Canadian dollar was no match for the greenback, which moved above CAD1.30 ahead of the weekend for the first time in a month. The momentum indicators suggest the US dollar has more scope to advance, and the next target is the CAD1.3035 area. Above there, the CAD1.3100-35 band is next. The high since November 2020 was recorded in the middle of July around CAD1.3225. After whipsawing in Q1, the five- and 20-day moving averages have caught the big moves. The shorter average crossed above the longer moving average last week for the first time since July 21. Initial support will likely be encountered near CAD1.2935.   Australian Dollar:  The Aussie was sold every day last week. It is the first time in a year, and its 3.4% drop is the largest since September 2020.   The rally from the mid-July low (~$0.6680) to the recent high (~$0.7135) looks corrective in nature. Before the weekend, it tested the rally's (61.8%) retracement objective. The momentum indicators are falling, and the Slow Stochastic did not confirm this month's high, creating a bearish divergence. A break of the $0.6850-60 area may signal follow-through selling into the $0.6790-$0.6800 band, but a retest on the July low is looking increasingly likely. Initial resistance is now seen near $0.6920.   Mexican Peso:  The peso's four-day slide ended a six-day run. The peso lost about 1.6% last week, slightly better than the 2.25% slide of the JP Morgan Emerging Market Currency Index. This month, the US dollar peaked around MXN20.8335 and proceeded to fall and forged a base near MXN19.81. It has met the (38.2%) retracement objective around MXN20.20 before the weekend. The next (50%) retracement is near MXN20.3230. The 200-day moving average is closer to MXN20.41. The dollar is probing the 20-day moving average seen a little below MXN20.24. The momentum indicators have only just turned up for the greenback. We suspect there may be potential to around MXN20.50 in the coming days.   Chinese Yuan:  The yuan was tagged with more than a 1% loss against the dollar last week, its biggest decline in three months. A combination of poor Chinese data, its small rate cut, and a resurgent US dollar spurred the exchange rate adjustment. At the end of July, China's 10-year yield was about 11 bp on top of the US. However, it switched to a discount after the US jobs data (August 5), and the discount grew every day last week, reaching 35 bp, the most since late June. After gapping higher before the weekend, the greenback reached nearly CNY6.8190, its highest level since September 2020. The next target is around CNY6.85, but given the divergence of policy, a move back toward CNY7.00, last seen in July 2020, maybe a reasonable medium-term target. The PBOC's dollar fix ahead of the weekend showed no protest of the weaker exchange rate.     Disclaimer   Source: Flash PMI, Jackson Hole, and the Price Action

Relevance up to 04:00 2022-08-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The dollar continues to advance on the Japanese yen for the eighth consecutive session. The quote of the USD/JPY pair is already struggling with the resistance of the MACD indicator line of the daily scale, above it is the target level of 137.80, formed by the embedded line of the price channel of the monthly timeframe.     The signal line of the Marlin Oscillator is slowing down the growth and this suggests an impending correction, since all this growth in the dollar is taking place amid a decline in the stock market. The S&P 500 lost 1.29% on Friday. The price may soon turn into a correction on a new wave of flight from risk.     The Marlin Oscillator has gone sideways on the four-hour chart, the price continues to grow. Long positions in this situation are associated with increased risk. Growth may continue if the price consolidates above the resistance line at 137.80, the target will be 139.02. The depth of a possible correction is not visible at the moment, but it may be the area of 134.35 - the area of the embedded line of the price channel on a daily scale, to which the MACD line on a four-hour scale is approaching.   Read more: https://www.instaforex.eu/forex_analysis/319473

The dollar has corrected around 3% from its highs seen last month. This has prompted a few questions about whether the dollar has peaked? Many trading partners would hope that to be the case, but the reality is that the Fed is likely to stay on track with its tightening. We think the dollar is more likely to retest its highs than correct much lower. Driving this view has been consistent rhetoric from the Fed that it will not be blown off target by some softer activity or price data. In fact, it now looks like US activity is accelerating again as lower gasoline prices leave more dollars in the pockets of US consumers. The 2023 US recession narrative looks a tough one to sell near term. And rising energy prices should continue to drive a wedge between the exporters of North America and the importers of Europe, meaning a much greater conviction of a recession in Europe. The ECB’s second 50bp rate hike on 8 September may well conclude its tightening cycle. Rate spreads and the energy income shock make it a very tough environment for the euro. EUR/USD should therefore drift near parity for much of 2H22. Elsewhere in Europe, the Swiss franc continues to be guided higher by the Swiss National Bank. Sterling remains vulnerable on recession fears. Beyond some substantial fiscal stimulus, sterling’s best hope is that the Bank of England delivers on most of the aggressive tightening currently priced into markets. Surging gas prices also spell trouble for the CEE4 currencies. The Polish zloty in particular looks unlikely to hold recent gains. Emerging market currencies have enjoyed a mini-renaissance over the last month. But a difficult external environment makes it hard to sustain those rallies until the dollar turns.     EUR/USD Late cycle economies will keep the dollar bid Current spot: 1.0241 • Defining business cycles has been a hazardous job over recent years, but it looks pretty clear that the US is a late-cycle economy with high inflation and low growth. This stage of the cycle is synonymous with inverted yield curves – which we have today. The dollar typically stays bid in this part of the cycle until convictions grow that the Fed will ease, and US 2-year yields start dropping. That is probably a story for 1Q23 and not today. • We look for another 125bp of Fed hikes this year and just 50bp from the ECB (in Sep.). Risks look skewed to even higher US rates. • With Europe entering recession on the back of a looming energy crisis this winter, EUR/USD can stay near the lows for 2H22. USD/JPY Staying supported Current spot: 133.44 • USD/JPY has found some good support under 132 and should stay reasonably supported for 2H22. Expect surveys of the Japanese buy-side in September to show greater allocations towards unhedged foreign bond purchases. US Treasury yields pay 250bp+ over JGBs and it is too expensive to hedge those US bond investments – now 3% p.a. through the 3m JPY forwards. • The Fed Jackson Hole of Aug 25-27th looks a dollar positive event risk. It is far too early for the Fed to signal the all-clear on inflation. The bigger risk is that 2023 Fed easing is priced out. • Like the euro, the yen is suffering from the negative terms of trade shock. These indices are at the worst levels of the year. GBP/USD Slip-sliding away Current spot: 1.2098 • GBP/USD remains vulnerable on the back of continuing dollar strength and the UK economy trapped by slowing growth and a hawkish Bank of England. The only good news we have seen for sterling recently is that the Bank of Israel plans to double the pound’s weighting in its FX reserve portfolio! • A tricky environment for risk assets in 2H22 – slowing growth, tighter monetary conditions – suggests the growth sensitive pound will struggle. • The only thing helping it should be the BoE remaining hawkish all year – lifting rates 50bp to 2.25% in September – and at least  making sterling an expensive sell. No reprieve for Cable this year. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Relevance up to 11:00 2022-08-25 UTC+2Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. USD/JPY: The chart shows the movement of USD/JPY in the four-hour (H4) chart. After trading around the resistance level of 137.60, USD/JPY quotes declined, indicating that the protracted correction is complete. The next target price level that is under consideration is £ 134.50 (per $1), with a slight upward correction to £ 135.50. Good luck! Source: Forex Analysis & Reviews: Technical analysis of USD/JPY

Asia trading to stay defensive ahead of Powell's speech at Jackson Hole on Friday.   Source: shutterstock Macro outlook Global: US stocks managed not to fall sharply yesterday. But that’s about the best that can be said of them. An initial rally in line with equity futures indications dissipated quite quickly, and it doesn’t feel like we will see any substantial moves higher this side of Powell’s Jackson Hole speech on Friday. On that front, Neel Kashkari yesterday was quoted talking about the need for the Fed to dampen inflation. No hints about a slowdown of rates or 2023 cuts. That could be a clue as to Powell's tone on Friday. The S&P500 declined only 0.22% on the day, the NASDAQ was flat from the previous day. Equity futures are again indicating a modest gain on opening today, but that may be about all we get from stocks for the time being. Bond markets were in the driving seat at the end of last week and the beginning of this week,  but yesterday, they did very little, which probably explains a lot of inaction in other markets. 2Y US Treasury yields fell just 1bp to 3.3%. The yield on 10Y Treasuries added 3.2bp rising to 3.046%. EURUSD managed to claw back some ground in lacklustre markets compared to this time yesterday, though it failed to hold above the parity level. The AUD did manage to push back above 69 cents, but it is looking pressured in early Asian trading today on a day with nothing major on the macro calendar. Cable also pushed higher, recovering to 1.1825 as did the JPY, which is now back down to 136.82. Asian FX was also a bit stronger over the last 24 hours, though there were notable omissions to that list, mainly from North Asia. TWD and KRW remain under pressure, along with the THB to a lesser extent. G-7 Macro: Eurozone Composite PMIs fell broadly as expected in August, with the headline index down to 49.2 from 49.9 in July, indicating economic contraction. Here’s a link to a note from our Eurozone team if you want more detail. And as we mentioned yesterday, July US new home sales fell to 511,000 on an annualized basis, even weaker than had been expected. This is the weakest sales growth in six years and will put further downward pressure on home prices, though probably not yet rents for some more quarters. Pending home sales today will add to the US housing story, together with July durable goods orders.   China: Sichuan's lack of hydroelectricity power has been partly solved by switching to coal-fired power. Though not a perfect solution in terms of Co2 emissions, at least the damage due to the lack of electricity to the economy is minimised. But at the same time, more cities are suffering from a lack of water for drinking and agriculture. The critical part is drinking water, and the government is delivering drinking water to affected locations. The damage so far of loss of agricultural produce in Jiangxi is CNY1.96 bn, which is still small compared to GDP of more than CNY114 tr in 2021. China is going to use cloud seeding to increase rainfall but that needs clouds in the sky to be thicker. As such, we do not expect there will be any immediate solution to this year’s drought. On real estate, more local governments have reduced non-first home mortgage down-payment ratios and mortgage rates. This should release more potential demand for residential properties, but we believe that home buying activity will only pick up when the public sees uncompleted projects finished, which could take more than a quarter. Korea: The business sentiment index showed that the manufacturing outlook for August rebounded to 82 (vs 80 in July), while the non-manufacturing outlook remained unchanged at 81 for the second month.  Although business concerns over future macro conditions have intensified, the recent stabilization of commodity prices appears to have had a positive effect on improving business sentiment among manufacturers. Indonesia: Bank Indonesia (BI) hiked rates unexpectedly yesterday ahead of a planned price increase for subsidized fuel.  We had expected BI to hike after the fuel price increase, but they opted to hike "preemptively" as both headline and core inflation are now expected to exceed the target this year.  BI also announced a new bond purchase scheme where the central bank would actively sell shorter-dated bonds while buying up the long end, resulting in a flatter yield curve.  The Operation Twist-like strategy would be deployed by BI to support IDR (attractive yields on the short end) while containing borrowing costs. What to look out for: Jackson Hole symposium Thailand trade (24 August) US durable goods orders and pending home sales (24 August) South Korea PPI inflation (25 August) Hong Kong trade balance (25 August) Bank of Korea policy (25 August) US initial jobless claims and GDP (25 August) Powell speaks at Jackson Hole symposium (26 August) Japan Tokyo CPI inflation (26 August) US Univ of Michigan sentiment (26 August) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

  So the day has come. Today the Federal Reserve symposium starts in Jackson Hole. The closer the event is, the more cautious the markets are. The USD/JPY pair is falling in the morning, but at the same time retains a huge growth potential. Why is everyone waiting for the dollar rally? On Thursday, the main economic get-together of August begins in the US state of Wyoming - the annual symposium of the Fed. Markets expect that in Jackson Hole, the US central bank will finally reveal its plans for further monetary policy. The culmination of the forum should be Friday's speech by the head of the Federal Reserve. Most analysts believe that Fed Chairman Jerome Powell will confirm the need to continue an aggressive course. This opinion is supported by a lot of hawkish comments from Fed members, which were made ahead of the symposium in Jackson Hole. Officials are still determined to fight high inflation. Of course, there is no denying the fact that recent signs of easing inflationary pressures have caused a sigh of relief from Fed policymakers. However, the path to achieving price stability is far from over, and the central bank is likely to continue to raise interest rates at the same rate. Amid such rhetoric, concerns that the US central bank may be inclined to a slower pace of rate hikes have significantly decreased in recent days. Currently, futures markets estimate the probability of a 75 bps rate hike next month at 60.5%. If tomorrow the Fed chairman gives even the slightest hint that this is real, we will see another enchanting rally of the dollar. However, while uncertainty remains about the Fed's future route, the greenback remains under pressure. This explains its current weakness. The DXY index fell by 0.15% on Thursday morning and retreated from its almost 20-year high of 109.27 to 108.47. And most of all, the "greenback plunged against the Japanese yen. The USD/JPY pair fell by 0.25% to the level of 136.775.     Why does the yen have no chance against the dollar? The Japanese currency benefits from a less sharp increase in Fed rates, since it has already suffered a lot this year from the aggressive course of the US central bank. Recall that the monetary policy of the Bank of Japan remains ultra-soft, despite the global trend of tightening and increasing inflationary pressure in the country. Unlike its colleagues, who are struggling with rising prices by raising interest rates, the BOJ stubbornly keeps the indicator at an ultra-low level. And apparently, the central bank will continue to bend its line. The BOJ's main task is not to suppress inflation, but to restore the economy, which has suffered greatly after the coronavirus pandemic. It is for this reason that the Japanese authorities continue to inject liquidity into the financial system by actively buying government bonds. Despite the measures taken, Japan's economy still cannot fully recover from the recession caused by COVID-19. This was stated today by BOJ board member Toyoaki Nakamura. The official warned that the prospects for the Japanese economy are clouded by another surge in the incidence of coronavirus, continuing supply constraints and a constant rise in commodity prices. He stressed that the BOJ should not abandon large-scale incentives to support the economy and switch to the side of the hawks just because everyone is doing so now. In his opinion, the tightening of monetary policy may become a serious deterrent for business, as a result of which economic growth will again be under threat. Bank Of Japan To Keep Being Dovish? Meanwhile, most analysts believe that the BOJ will stick to its dovish strategy for a long time. A survey conducted by Bloomberg showed that 16 out of 19 experts exclude the possibility of a change in the monetary rate of the BOJ before the expiration of Haruhiko Kuroda's term of office in April 2023. According to experts, the head of the Japanese central bank will stand his ground even if inflation in the country reaches the highest level of 3% in more than 30 years. In order for Kuroda to agree to the normalization of monetary policy, inflation should remain above 3% for at least six months, Bloomberg writes. And this, if you believe the forecasts, will not happen. Japanese Inflation Said To Reach 2.5% In 2022 According to Japanese economists, inflation will reach 2.5% at the end of this year, and by the end of 2022 it may drop to 1%. All this indicates that the BOJ will remain a black sheep among its colleagues. This scenario is extremely unfavorable for the yen. Due to monetary divergence, the Japanese currency has fallen in price against the dollar by almost 15% this year. Therefore, the position of the JPY is unlikely to improve much, even if tomorrow the head of the Fed does not meet the expectations of the markets and signals a slowdown in the pace of tightening. The yen can only benefit from this in the short term. The dollar will still have the main trump cards in its hands – several more stages of raising rates. Long-term review Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/319863

The Japanese yen is in negative territory today. USD/JPY is trading at 136.90 in the European session, up 0.34%. It has been a relatively quiet week for the yen, which is trading exactly where it started the week, around the 137 line. The month of August has not been kind to the yen, with USD/JPY soaring 2.75%. The US dollar is again in favor as the markets have tapered down their excitement that the Fed plans a dovish pivot. Does the Fed plan to let up or remain aggressive in its fight against inflation? We will certainly be smarter after Jerome Powell’s speech at Jackson Hole later today. A hawkish message from Powell should boost the US dollar unless investors zero in on any dovish remarks or projections, which could reignite speculation that the Fed will ease up on rate hikes. Tokyo Core CPI rises The Tokyo Core CPI index rose 2.6% in August, above the forecast of 2.5% and higher than the 2.3% gain in July. This marked the highest gain since October 2014. Policy makers in other major economies can only dream about inflation below 3%, but for Japan, rising inflation is a new phenomenon after decades of deflation. Inflation has exceeded the Bank of Japan’s target of 2% for four successive months and inflation is finally on the Bank’s agenda. Still, it is very unlikely that the BoJ will do anything more than tweak monetary policy, as its number one goal is to stimulate Japan’s fragile economy. The rise in inflation and the BoJ’s rigorous control of its yield curve has caused a steep deprecation of the yen, and an exchange rate of 140 may not be far off. There has been speculation in recent months that the Ministry of Finance could intervene to support the yen, but this has not happened until now and there is no indication that the 140 level is a magical ‘line in the sand’ that would trigger intervention.  For now, the main driver of USD/JPY remains the US/Japan rate differential, leaving the yen at the mercy of the movement of US Treasury yields. USD/JPY Technical USD/JPY is testing resistance at 137.03. Above, there is resistance at 137.03 1.3615 and 1.3504 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY hits 137, Powell speech eyed - MarketPulseMarketPulse

USDJPY seeks support The Japanese yen finds support as August’s CPI hits an eight-year high. The trajectory remains up from the daily chart’s perspective and the latest pullback could be an opportunity to accumulate. A rally back above 137.40 at the start of the liquidation in late July is an encouraging sign that buyers are still in the game. However, the price action may stay choppy after a bearish RSI divergence and a fall below 136.70 triggered some profit-taking. 135.70 is the closest support and a bounce above 137.50 may send the dollar to 139.40. EURGBP consolidates The pound steadies over a higher chance of a 75bp rate rise by the BOE next month. The pair came under pressure in the supply area around 0.8510 and a follow-up break below 0.8430 put the bulls on the defensive. The euro is hovering above the daily support at 0.8390 which is a key level to keep last week’s rebound intact. 0.8460 is the first hurdle ahead and a close above 0.8510 may trigger an extended rally towards 0.8600. Failing that, the pair could be vulnerable to a sell-off to this month’s low at 0.8340. SPX 500 attempts to bounce The S&P 500 bounces as the shorts take profit ahead of Powell’s speech. The recent sell-off has stopped short at 4110, which is a daily support at the base of a bullish breakout. The level also coincides with the 30-day moving average, making it a congestion area. A bullish RSI divergence attracted bargain hunters with an initial pop above 4160. The bulls will need to lift the support-turned-resistance at 4210 before the recovery could gain momentum. A bearish breakout could trigger a fall to the psychological level of 4000.

Federal Chairman Jerome Powell, speaking at a symposium in Jackson Hole, did everything to make the market finally realize that the central bank will stop at nothing in its plan to curb inflation in America. In the last article, we suggested that if the head of the Fed did not throw a surprise at the markets, then it would be possible to observe another local rally in the stock and other asset markets with a simultaneous increase in demand for government bonds and a weakening of the US dollar. And that would very likely have been the case if Powell hadn't made a targeted statement pointing out that while controlling inflation through higher interest rates, slower growth and softer labor market conditions would hurt households and businesses , "failure to restore price stability will mean much more pain" in the long run. It seems that weak hopes have finally collapsed, and this largely confirms the recovery in the growth of treasury yields amid falling demand for them. The yield of the 10-year T-Bond benchmark is already confidently staying above the 3% level and, after a slight downward correction, resumed growth. It is likely that a further sell-off in the government debt market will push it up to an immediate high of 3.5%. How will the US dollar behave in the context of continued aggressive rate hikes and growth in Treasury yields? We believe that it will have to further strengthen against major currencies, despite the fact that rates will also rise in other economically developed countries of Europe, Canada, Australia, and so on. Here it will be supported by the growth of Treasury yields and the flight of capital from Europe, as well as from countries with emerging economies, with the exception of Russia and China. In this case, we can expect the growth of the dollar index ICE to the mark first at 110, and then to 111 points. In fact, it will be possible to say that the dollar exchange rate against major currencies will linger for a long time at the level of the beginning of this century. As for the possible dynamics of the markets this week, the release of data on inflation in the eurozone, which is expected to rise again, and, of course, the latest figures on unemployment in America, will play a leading role here. Considering the Fed's general position regarding rates, we believe that if the data on the number of new jobs comes out no worse than expected, the US central bank will once again be confident that it is on the right course, fighting inflation and using the still strong labor market for this, trying to bring down the economy before serious problems arise, like a high temperature with aspirin, by aggressively raising interest rates. It is likely that after local consolidation, the smooth strengthening of the dollar will continue, and the markets will remain between the hammer of Fed rates and the anvil of inflation. Forecast of the day:     AUDUSD pair The pair is trading below 0.6865. Consolidation below this mark may be the basis for the pair's fall to 0.6800. USD/JPY pair The pair is at the level of 138.90. If it does not settle above it, it may correct down to 138.45, and then again rush to 139.40. Relevance up to 09:00 2022-08-31 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320143

The Japanese yen has started the week with sharp losses, with USD/JPY rising as high as 139.00 earlier today. In the European session, USD/JPY is trading at 138.52, up 0.75%. The month of August can’t end soon enough for the yen, as USD/JPY has climbed 4.0%. The yen fell 0.78% on Friday, as Fed Chair Powell delivered a clear, no-nonsense message to the markets from scenic Jackson Hole. Dollar soars after hawkish speech from Powell Powell’s speech essentially reiterated what the Fed has been saying for weeks, but the markets reacted sharply, with equities tumbling and the US dollar recording strong gains. Investors finally acknowledged that the Fed means business and will not U-turn on policy, even if inflation drops in one or two reports. Powell appeared determined to avoid any repeats of the market euphoria after inflation declined unexpectedly in July, which raised speculation that the Fed was set to make a dovish pivot. Powell reiterated that the Fed would continue to use all its tools to fight inflation, acknowledging that high interest rates would remain for some time, and the Fed would be careful not to ease policy prematurely. The highly-anticipated speech was unusually brief, which may have been an attempt to prevent investors from looking for some dovish remarks in the speech and ignoring the gist of the speech. Powell used strong language to get his message across – saying that Fed tightening would cause “some pain” to the economy, and avoiding soothing terminology, such as “soft landing”. The Fed plans to continue to raise rates until it’s convinced that inflation has peaked and is on the decline and judging by the market’s reaction, investors heard Powell’s message loud and clear. US Treasury yields have moved higher, with the 2-year yield rising to 3.445% today, up from 3.032% on Friday, prior to Powell’s speech. This upward movement is weighing on the yen, which is sensitive to the US/Japan rate differential. If the upward trend continues, we could see an assault on the symbolic 140 level. . USD/JPY Technical USD/JPY has broken above resistance at 1.3759 and 1.3822. Above, there is resistance at 1.3891. 1.3701 and 1.3632 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: Yen slumps as Powell pledges tighter policy

USDJPY hits major resistance The Japanese yen steadied after July’s unemployment met expectations. A close above 138.80 has put the greenback right under last July’s peak at 139.40, hitting a 24-year high. A bullish breakout would attract more buying interests and resume the uptrend in the medium-term. In the meantime, an overbought RSI may cause a limited pullback as intraday traders take profit in the supply zone. Fresh selling as a last attempt by the short side might drive the pair lower. 136.30 is a key support to keep the momentum going. Read next: Apple Stock Price Plunged On Friday! When Is The iPhone 14 Coming Out? iPhone 14 Is Expected To Be Announced Next Week! | FXMAG.COM AUDUSD sees limited rebound The Australian dollar bounced higher after upbeat retail sales in July. Its previous failed attempt to clear the psychological level of 0.7000 led to a new round of sell-off below 0.6850. This is a sign that the bears may have regained control of the price action. A bearish MA cross on the daily chart may further weigh on sentiment. After the RSI sank into oversold territory, some bargain hunting tried to push back. However, stiff selling pressure could be expected near 0.7000. 0.6800 would be the next stop when volatility returns. Read next: Bitcoin price could slide to $17,500 as regulators consider tightening rules around leverage| FXMAG.COM UK 100 breaks lower Equities remain under pressure as investors brace for more aggressive hikes from central banks. The FTSE 100 lost its momentum as it came closer to the triple top (7650) from the daily chart. An initial fall below 7460 triggered some profit-taking. Then a break below 7400 invalidated the latest rebound and forced buyers to bail out. 7310 is the closest support and the RSI’s oversold condition may cause a limited bounce. The index could be vulnerable to another round of liquidation unless the bulls manage to reclaim 7500.

Summary:  Markets traded mostly sideways yesterday as the US dollar’s advance was stymied and US yields pushed back slightly lower. China continues to allow its currency to trade toward the lows for the cycle versus the US dollar as the 7.00 area nears in USDCNH. The euro bobbed back up toward parity versus the US dollar yesterday as natural gas prices fell even as Russia shuts the key Nord Stream pipeline down for a purported few days of maintenance.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities stabilised yesterday following that knee-jerk reaction on Friday to the Jackson Hole presentations with S&P 500 futures touching and bouncing off the 50-day moving average closing above the critical 4,000 level. S&P 500 futures are trading around the 4,044 level this morning sandwiched between the 100-day moving average above this level and the 50-day moving average below suggesting a bigger move is shaping up in either direction. The next big shift in sentiment will be when we get the US August CPI print on 13 September as that is the key data point to shape expectations from current levels. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities pulled back moderately, Hang Seng Index -0.9%. Tech names were weak. Hang Seng Tech Index plunged as much as 3% before bouncing off the lows to finish the morning session down 1.7%.  According to the Ministry of Industry and Information Technology, smartphone sales in China fell 2.9% YoY in the period between Jan and July. Despite reporting solid 1H results, China automaker, BYD (01211:xhg) slid 0.6%. In A-shares, mining stocks, gas, electric equipment, and auto parts underperformed, CSI 300 -0.5%. Pinduoduo (PDD:xnas), a leading Chinese eCommerce platform listed on Nasdaq reported strong 2Q results, showing stronger than peer gross merchandise value growth and better-than-expected margin improvement. US dollar and especially USDCNH The US dollar tried higher, but failed to follow through as risk sentiment stabilized and US Treasury yields eased back lower. The USDCNH rate, however, continues to push toward the high of the cycle, trading near 6.92 this morning. EURUSD trades near parity this morning after natural gas prices fell sharply in Europe yesterday and despite ECB Chief Economist Lane arguing for steady rate increases (pushing back against the pricing of a possible 75 basis point move at next week’s ECB meeting). Incoming data this week will be critical for USD direction. JPY weakness to bring back pressure on Bank of Japan USDJPY is back to testing its record July highs despite little change in money market pricing of the Fed rate path following Powell’s hawkish speech at Jackson Hole. The peak Fed funds rate is still priced in at 3.8%, while some of the Fed speakers have started to suggest 4%+ levels that may be needed to combat inflation. This brings the September dot plot in focus, but we get the jobs and CPI data before that as well. Any further upward re-pricing of the Fed path, if resulting in gains in US 10-year yields, could very well take USDJPY to new highs with Japanese yields still remaining capped due to the Bank of Japan’s yield curve control policy. If, however, US data underwhelms, the room on the downside for USDJPY is tremendous. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw their best day in six weeks amid threats of a decline in supply from OPEC and production outages in Libya. Brent futures rose above $105/barrel although some softening was seen in Asia overnight, while WTI rose to $97/barrel. This follows news from last week that Kazakhstan’s exports of crude may be impacted for months because of damage to its port facility. Meanwhile, negotiations between Iran and the US over the revival of the 2015 nuclear deal could drag on for weeks, easing fears of an imminent surge in supply. Pro Farmer tour see lowest US corn production since 2019 The just completed Pro Farmer tour across the US grain belt helped drive corn futures in Chicago to a two-month high on Monday after the tour saw the US corn crop at 13.76 bn bushels, below USDA forecasts for 14.36 billion bushels. Pro Farmer predicted a soybean crop of 4.54 billion, in line with the USDA’s latest forecast. Wheat, supported by corn’s rally, touched its highest since July 12 despite news that Ukraine agricultural exports could rise to 6.5 million ton in October, double the volume in August.  The soybean vs corn ratio needs to stay low (favouring corn) ahead of the South American planting season in order to persuade farmers there to plant more of the fertilizer intensive crop. US Treasuries (TLT, IEF) US treasury yields eased lower yesterday. An interesting paper presented at the Jackson Hole conference at the weekend suggests that the Fed will have a hard time delivering on quantitative tightening without causing harm to financial market functioning, which could mean less supply of treasuries from the Fed if its shies away from reducing its balance sheet at the previously touted pace of $95 billion/month. Otherwise, incoming US data is the focus through the August CPI release on September 13. What is going on? Shell CEO warns of prolonged European gas crisis Shell CEO Ben van Beurden gave comments from Norway’s ONS conference, suggesting that Europe could face gas shortages for a number of winters. This disproves reports suggesting that Europe has already built reserves for the winter demand and reaffirms our belief that a move to broad-based energy supply will continue to be top of mind in the long run. In the near term, demand destruction appears to be the only possible solution, and Van Beurden stressed the need for efficiency savings as well as rationing. ECB Lane dials back on jumbo rate hike expectations ECB chief economist Lane was on the wires on Monday and hinted at a steady pace of rate hikes in a “step-by-step” manner rather than jumbo rate hikes. This appears to be a pushback against calls for a 75bps rate hike at the September meeting, as he made the case to allow the financial system to absorb the rate changes. Moreover, on inflation, Lane said long-term inflation expectations remain close to the two per cent target, while near-term inflation expectations are quite elevated. BYD reported 1H earnings at the high end of the preannounced range Chinese automaker BYD (01211) reported 1H revenue up 66% y/y to RMB 151bn. In terms of segments, auto revenue surged 130% y/y while mobile handset revenues contracted 4.8% y/y. Net profits jumped 206% to RMB 3.6bn, at the top end of the preannounced range of RMB 2.8-3.6bn. Volume growth (353K new energy passenger vehicles in 2Q, +265% y/y) beating market expectations despite two rounds of price increases in 2022 and supply chain disruptions. The company’s EV market share rose to 29% (vs 17% in 2021). Pinduoduo delivered Q2 results showing stronger than peer sales growth Pinduoduo (PDD:xnas), a leading eCommerce platform with strong penetration into agricultural products and online shoppers from rural areas, reported 1H total revenue up 36% y/y, far exceeding the 3% y/y consensus estimate. The company attributed the revenue growth to a recovery in consumption since mid-May, successful promotion campaigns, and 48-hour daily necessity supply packs for people facing lockdown. The company’s strong market position in rural areas and agriculture-related products also help it stand out from its rivals. In Q2, the company achieved a 20 %-point improvement in margin, reaching 33.5%, but the management cautioned investors that the margin compression was attributed to temporary cost savings early in the quarter and spending had increased since mid-May. Non-GAAP EPS came in at RMB 7.54, +161% y/y. Shares in Uranium companies and other nuclear-related companies are back in the spotlight Japan has signaled its openness to more nuclear power, at the same time, Tesla founder Elon Musk has applauded uranium as an energy alternative, during an energy conference in Norway. Uranium stocks moved higher as a result on Monday in the US, which boosted the Global X Uranium ETF up 7%, to its highest level since June 8. Shares in the Asia-Pacific region followed. Australian stocks saw the most significant moves given the country has the largest uranium reserves globally. Australia’s Paladin rose 11%, Deep Yellow 15% and Boss Energy 10%, while Rio Tinto (which owns a deposit) rose over 1%. Japan’s Mitsubishi Heavy Industries and Tokyo Electric Power gained 3%. Companies to watch in Europe, include Yellow Cake and Kazatomprom. What are we watching next? August U.S. job report is out on Friday There should not be a major surprise. The economist consensus expects a 300,000 payrolls increase in August and a stable unemployment rate at 3.5 % - this is a five-decade low. If this is confirmed, it all points to a healthy labor market (despite the moderate pace of job increases). Today, the U.S. government will also release July data on vacancies and quits. Expect job openings to remain elevated, thus pointing to resilient demand for labor. These figures are unlikely to play a major role at the September FOMC meeting since it is well-known that labor market data are lagged indicators. Inflation remains the main point of concern, as mentioned by Fed Chair Jerome Powell last week at Jackson Hole Symposium. August EZ CPI will be painfully high The consensus expects a new increase of 9 % year-over-year when the data will be released on Wednesday. This should convince European Central Bank (ECB) policy makers to raise borrowing costs by a sizable increase on September 8. At Jackson Hole, ECB’s executive board member Isabel Schnabel indicated the central bank has no other choice but to act with ‘determination’. This is a matter of credibility. According to Bloomberg, traders now price a 50 % chance of a 75-basis points rate hike in September. Earnings to watch Today’s earnings focus is China are lithium miners Tianqi Lithium and Ganfeng Lithium as the growth in electric vehicles sales is putting enourmous pressure on availability of lithium and prices of lithium carbonate. Baidu is another Chinese earnings release to watch today as the company’s footprint in online advertising will give insights into economic activity. Later in the US, earnings to watch are Crowdstrike in the cyber security industry and HP in computing hardware. Today: Woodside Energy, ICBC, China Yangtze Power, Muyuan Foods, SF Holdings, Shaanxi Coal, Midea Group, Tianqi Lithium, Ganfeng Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0700 – Spain Flash Aug. CPI 0830 – UK Jul. Net Consumer Credit 0830 – UK Jul. Mortgage Approvals 0900 – Euro Zone Aug. Confidence Surveys 1115 – ECB's Vasle to speak 1200 – Hungary Rate Decision 1200 – US Fed’s Barkin (Non-voter) to speak 1200 – Germany Aug. Flash CPI 1300 – US Jun. S&P CoreLogic Home Price Index 1400 – US Aug. Consumer Confidence 1400 – US Jul. JOLTS Job Openings 1500 – US Fed’s Williams (voter) to speak 1600 – ECB Speakers Holzmann and others 2030 – API's Weekly Crude and Fuel Stock Report 0130 – China Aug. Manufacturing/Non-manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 30, 2022

Relevance up to 08:00 2022-08-31 UTC+2 The USD/JPY was trading at 138.42 at the time of writing. After its amazing rally, the price tries to consolidate and attract more buyers before jumping higher. Technically, the bias remains bullish despite temporary drops and or sideways movements. Fundamentally, the Unemployment Rate came in at 2.6% matching expectations. Later, the US data could be decisive. JOLTS Job Openings indicator is expected at 10.37M while the CB Consumer Confidence could be reported at 97.6 points. USD/JPY Minor Range! As you can see on the H1 chart, the price found resistance at the R2 (138.90) and now it moves sideways. In the short term, it's trapped between the R2 and the R1 (138.20) levels. As long as it stays above the R1, USD/JPY could resume its growth. Technically, the current sideways movement could represent an upside continuation pattern. Better-than-expected US data could push the pair higher. USD/JPY Forecast! A valid breakout above the R2 (138.90) and a new higher high could activate further growth at least until the 139.38 key level. This scenario could bring new long opportunities. Also, false breakdowns below the R1 (138.20) could help the buyers to go long. Still, a broader growth could be confirmed only by a valid breakout above the 139.38 historical level. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: USD/JPY consolidates ahead of breakout

The Japanese yen is in positive territory today after starting the week with sharp losses. USD/JPY is trading at 138.22, down 0.34%. Japan releases a host of events on Wednesday, including retail sales and consumer confidence. Retail sales for July is expected to come in at -0.5% MoM, following a 1.4% decline in June. Consumer confidence remains weak, with a July estimate of 31.0, following the June read of 30.2. The Japanese consumer is in a sour mood and nervous about the economy, so it’s no surprise that she is holding tight to the purse strings as inflation continues to rise. Yen remains under pressure The yen remains under pressure and took it on the chin after Fed Chair Powell’s speech at Jackson Hole on Friday. Powell’s brief speech went straight to the point, pledging to continue raising rates until inflation was brought under control. Powell pointedly said that one or two weak inflation reports would not cause the Fed to U-turn on its tightening, a veiled reference to the market euphoria which followed the July inflation report, which was lower than the June release. With the equity markets taking a tumble after Powell’s speech, it appears that investors have finally gotten the Fed’s hawkish message. Powell’s speech removed any doubts about the Fed’s plans to continue raising rates, but the size of the increases will depend not just on inflation, but also on other economic data. Overshadowed by Jackson Hole, US Personal Income and Spending data was weaker than expected. As well, the Core PCE index, the Fed’s preferred inflation indicator, fell to 6.3%, down from 6.8% and below the forecast of 7.4%. If Friday’s non-farm payrolls report is weaker than expected, it would be a clear indication that the sharp increase in rates is having its desired effect and the economy is slowing. In such a scenario, Fed policy makers may be more inclined to raise rates at the September meeting by only 50 basis points, rather than 75bp. . USD/JPY Technical USD/JPY is testing support at 1.3822. The next support line is at 137.01 1.3891 and 1.4012 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: Yen stabilizes after hitting 139

Overview:  The rise in global interest rates continues. The US 10-year yield is a few basis points to near 3.15% and European benchmarks are mostly 5-6 bp higher. Of note, the sharp sell-off in UK Gilts is being extended. Yesterday’s 10 bp rise has been followed by another 14 bp surge today. Italian bonds are also getting hit. The 10-year yield is up a little more than 10 bp. The US dollar is mostly firmer against the major currencies, though the yen and Australian dollar are little changed. Among the emerging market currencies, a small number of Asian currencies, including the Chinese yuan and South Korean won are firmer, but most are under pressure. Equity markets in the Asia Pacific region were mixed, but the downside bias is evident in Europe, where the Stoxx 600 is lower for the fourth consecutive session and seven of the last nine. It is at new lows since mid-July. US futures are narrowly mixed and have a three-day loss in tow. Gold is also making new lows for the August and traded at $1711 having been above $1800 in the middle of the month. Iraq says its exports will not disrupted by the violent demonstrations helped the October WTI contract reverse lower yesterday (possible key downside reversal) and today it is testing the 200-day moving average near $89. US natgas is steady after falling 3.3% yesterday. Europe’s Dutch benchmark is up nearly 5% to snap a three-day slide of over 20%. Iron ore jumped nearly 3.8% to resurface above $100 and halt the two-day slide of almost 8%. December copper is slipping lower for the fourth session and is trading near four-week lows below $354. December wheat is slipping further after falling 2.7% yesterday.  Asia Pacific China's composite August PMI eased to 51.7 from 52.4. The contraction in the manufacturing sector continued with the PMI below 50 for the second consecutive month (49.4 vs. 49.0). The drought, power outages, Covid disruptions, and the ongoing drag from the end of the property bubble are hobbling the economy. The drop in supplier delivery times (49.5 from 50.1) are illustrative. Output and new orders continued to fall. The non-manufacturing PMI slowed to 52.6 from 53.8. Construction, reflecting, the emphasis of government efforts on manufacturing remained a bright spot at 56.5, albeit down from 59.2 in July. Japan's industrial production and retail sales were better than expected. Industrial production has surged 9.2% in June (month-over-month) in a response to the re-opening of Shanghai from Covid lockdowns and many expected a small pullback in in July. Instead, the preliminary estimate has it growing by another 1% in July. Autos, boilers, and turbines output grew, according to the report. Retail sales rose by 0.8% in July, more than twice the median in Bloomberg survey after the June series was revised to show a 1.3% decline rather than 1.4%. Autos, food, and beverages led the better-than-expected report. Today's data suggests a firm start to Q3. Economists expect the world's third-largest economy to expand by around 2.0% in Q3. The US claims, and echoed by many media outlets, that it is not seeking to change the status quo about Taiwan, but that Beijing is. Beijing claims that it is the US that is the antagonist. Both assessments seem correct. Leave aside Pelosi's visit and the other official visits, often using US military aircraft. Forget about reports of US military advisers in Taiwan for nearly two years. Consider a bill before Congress that proposes to declare Taiwan an important non-NATO ally. Consider Senator Blackburn's suggestion earlier this week that it is "may be" time to revisit the US one-China policy President Biden has intimated as much on several occasions only to have his comments "walked back." Beijing is no innocent bystander. It continues to harass Taiwan and challenge others in the South China Sea, including the Philippines and Japan. Yesterday, Taiwan fired warning shots for the first time at a PRC drone near an offshore island. Beijing struck a secret deal with the Solomon Islands a few months ago and one of the consequences has become clearer in recent days. Last week, a US coast guard ship was denied refueling permission by the Solomon Islands, which has declared a moratorium on all US Navy visits pending an update of its protocol of procedures. The US embassy was closed in the Solomon Islands nearly two decades ago, but plans on re-opening it, according to press reports earlier this year. The yen did not react much to the better-than-expected local data, and the firm US yields kept the US dollar firm. The greenback is little changed, but so far, holding below yesterday's high slightly above JPY139.05. It is also holding above yesterday's low just above JPY138.00, where the five-day moving average is found. The Australian dollar finished North American session on its lows yesterday, near $0.6855. There has been no follow-through selling yet today and the Aussie poked above $0.6900 before finding new offers, which is also where the five-day moving average is found. Position-adjusting around the expiration of options for A$400 mln today at $0.6875 and tomorrow for A$720 mln at $0.6867 may be contributing to the choppy tone. For the sixth consecutive session, the PBOC set the dollar's reference rate below market expectations (Bloomberg survey) as CNY6.8906 vs. CNY6.9083. The dollar gapped higher on Monday against the yuan. It entered the gap today, which extends to last Friday's high around CNY6.8730 and recorded a low near CNY6.8870. Its sideways movement follows a two-and-a-half week gain of about 2.3%. Europe France reported slightly softer inflation but also considerably weak consumer spending. The EU harmonized CPI rose 0.4% in August for a 6.5% year-over-year rise (6.8% in July). France caps on energy prices run until the end of the year, but the government is considering new measures and the EU is considering collective action. Service price inflation was sustained, and food and manufactured goods prices accelerated. Consumer spending fell 0.8% in July compared with a 0.2% decline median projection in Bloomberg's survey. June's 0.2% increase was shaved to 0.1%. The third quarter is off to a weak start. After contracting by 0.2% in in Q1, the French economy expanded by 0.5% in Q2. The 0.3% forecast for Q3 might be a bit optimistic. Italy's harmonized CPI jumped to 9.0% from 8.4%. Many economists had hoped for a dip to 8.2%. The month-over-month gain of 0.8% followed a 1.1% decline in July. Recall that yesterday's German inflation edged up to 8.8% from 8.5% and Spain's eased to 10.3% from 10.7%. The aggregate eurozone inflation figures were worse than expected. The headline rose to 9.1% from 8.9%. However, more troubling was the jump in the core rate to 4.3% from 4.0%. The median forecast in Bloomberg's survey looked for a 4.1% year-over-year core rate. The euro was sold to session lows (~$0.;9975) a few minutes before the report. The swaps market is pricing in a slightly greater chance of a 75 bp hike next week by the ECB, just shy of a 66% chance. It was about 50% at the end of last week. There is a dramatic interest rate adjustment taking place in Europe, which over time, will likely impact the foreign exchange market. Yesterday, we noted that the Germany two-year interest rate more than doubled in the past two weeks (from about 0.50% on August 16 to almost 1.20% on Monday and about 1.18% today). This has overwhelmed the increase in US yields and sliced the US premium to about 230 bp, the lowest since early July. The UK 2-year Gilt is not slouch. It has played a bit of catch-up yesterday and traded above 3% for the first time since 2008. It spent most of July and the first half of August below 2%. At the start of the year, the UK and US two-year yields were near parity. The more aggressive trajectory of Fed policy had given the US a 135 bp premium as recently as mid-August. The premium has collapsed to around 45 bp, the least since mid-March. After holding above $0.9900 on Monday's test, the euro reached $1.0055 yesterday before sold in North America back down to $0.9980. Today's low has been about $0.9975, and the intraday momentum indicators suggest it could stabilize for a little. The nearby cap may be around $1.0020. With the August CPI estimate behind it, the next two key events are this Friday's US jobs report and next week's ECB meeting. Sterling was sold to new two-year lows yesterday near $1.1620 and remains pinned in the trough today. It has recorded lower highs this week, and today, for the first, time has not traded above $1.1700. However, like the euro, the intraday momentum indicators for sterling suggest some consolidation is likely in the North American morning. America Two recent business surveys have caught our attention. First, a survey of CFOs by Deloitte found that 73% regarded persistent inflation as bigger threat than a recession, with the other 27% more concerns about a recession. What is a bit surprising by this is that judging from the recent earnings many businesses have been able to lift prices to more than covering rising costs, including wages. Adjusted pre-tax profits rose 6.1% in Q2 over Q1, which had seen a 2.2% decline quarter-over-quarter. By another metric that measures pre-tax profits as a percentage of gross value added, corporate profit margins rose 15.5% in Q2, the widest in more than 70 years. Separately, and somewhat less surprising, a survey by the US-China Business Council of its 117 members found over half attributed plans to cancel or delay investment plans in China due to its Covid-related restrictions. Most said the negative effects were reversible, but 44% said it would take "years" to restore confidence. ADP launches a new methodology for its estimate of private sector employment today. In its press release, it claims the report will be more robust, using granulated data based on payrolls covering 25 mln US workers. In addition, estimate of the current month's nonfarm private sector employment change, it will also provide weekly data from the previous month by industry and business size. A new pay measure is also being introduced. ADP did not provide an estimate for July, pending this methodological change. The median forecast in Bloomberg's survey of 15 economists is for a 300k increase, though the average is a bit lower at 280k. Yesterday's report on job openings (July JOLTS) was around 850k more than expected and the June series was revised higher. The Fed funds futures are pricing in about a 75% chance that the third 75 bp hike will be delivered next month. It was about a two-thirds chance before Fed Chair Powell spoke at Jackson Hole. The dramatically smaller than expected Canadian Q2 current account surplus reported yesterday (C$2.7 bln rather than the C$6.8 bln expected warns of downside risks with today's Q2 GDP report. The current account surplus in the first quarter was revised sharply as well (C$2.7 bln from C$5.0 bln). Bloomberg' survey of a dozen economist generated a median forecast of 4.4% annualized pace after 3.1% expansion in Q1. The monthly GDP figures are more troubling. The cumulative monthly increases n Q1 were 1.4%. June figures will be reported today. The median forecast calls for a 0.1% increase, which would bring the Q2 cumulative increase to 0.4%. We note that Canada's 10-year breakeven has risen from about 1.93% at the start of last week to 2.20% today. On the other hand, the five-year breakeven has eased about six basis points at the same time and is below 2.10% today. The Bank of Canada meets next week, and although the market flirted with another 100 bp increase, it appears to recognize a 75 bp move is more likely. Separately, a small and minor cabinet reshuffle is expected later today, with no policy implications.   The US dollar is trading at new highs for the month today against the Canadian dollar. Yesterday, it traded above CAD1.31 for only the third time this year but closed slightly below it. It is extending the leg up that began last week near CAD1.29 and has approached CAD1.3115. The spike high recorded in the middle of last month was near CAD1.3225. The intraday momentum indicators are stretched but the key remains the broader risk appetite (S&P 500 proxy). Initial support now may be in CAD1.3060-80 area. The greenback is trading firmly against the Mexican peso and is near a seven-day high above MXN20.22. The high set on August 19 around MXN20.2670 is the key to the immediate outlook. A move above it, could spur a move toward MXN20.35-37. But, if it holds, it may signal a consolidative phase. That said, note that the five-day moving average is poised to cross above the 20-day moving average for the first time since late July.    Disclaimer   Source: EMU August CPI at 9.1%, while the Core Rate Jumps to 4.3%

After starting the week with sharp losses, the Japanese yen has settled down. In the European session, USD/JPY is showing limited movement, trading at 138.66. Japanese data improves Japan posted solid numbers today, as retail sales and industrial production both improved in July. Retail sales climbed 2.4% YoY in July, (vs 1.5% in June), above the forecast of 1.9%. Significantly, household spending stayed strong, despite high inflation due to rising energy and food prices. Industrial production surprised with a gain of 1.0% MoM (vs. -0.5% forecast), after a huge 9.2% gain in June. Two straight months of gains point to strong pent-up demand and an easing in supply line disruptions. As well, the consumer confidence index rose to 32.5 in August (vs. 31.0) up from 30.2 in July. Consumer confidence remains weak, but the index improving for the first time in three months is welcome news. The host of positive numbers is an indication that the Japanese economy, although fragile, continues to recover, in large part due to pent-up demand following the easing of Covid restrictions. Still, the economy has a long way to go before the Bank of Japan will join its counterparts and tighten policy. The BoJ is primarily focused on stimulating the economy, and inflation remains much, much lower than what we’re seeing elsewhere. With the BoJ vigilantly maintaining its yield control, the Japanese yen remains at the mercy of the US/Japan rate differential, and higher US yields of late have pushed USD/JPY close to the 139 level. We could see the yen fall to 140 in the short-term, with no indication that Japan’s Ministry of Finance has any appetite to intervene and support the yen. Later today, the US releases the ADP Employment report. The market consensus for August stands at 288 thousand, which would be a strong improvement from the July gain of 128 thousand. This event could cause some brief volatility in the dollar, but it is not a reliable indicator for Friday’s non-farm employment report. In fact, NFP is expected to fall to 300 thousand, down from July’s massive gain of 528 thousand. . USD/JPY Technical USD/JPY is testing support at 1.3822. The next support line is at 137.01 1.3891 and 1.4012 are resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Today's monthly activity data is positive with both industrial production and retail sales improving, suggesting that the moderate economic recovery will continue this quarter – posing an upside risk to the current quarter's GDP Industrial production rose unexpectedly in July by 1.0% month-on-month 1.0% Industrial Production %MoM, sa Higher than expected Industrial production and retail sales improved in July Industrial production rose unexpectedly by 1.0% month-on-month, seasonally-adjusted (vs -0.5% market consensus), following a 9.2% surge in June.  Output forecasts for August and September also improved suggesting that solid production is likely to continue this quarter. By industry, automobile production and shipments improved. Keeping up with the production setbacks will normalise in a few months, but the solid gain for two consecutive months shows that the global supply bottleneck is fading and pent-up demand remains strong. Meanwhile, weak production of electronic components and devices suggests that global semiconductors are entering a downcycle for the second half of this year. Meanwhile, retail sales edged up 0.8% in July (vs -1.4% in June), which was also better than the market consensus of 0.3%. Household consumption remained strong despite the resurgence of Covid cases and high inflation. General merchandise and apparel fell, but more importantly, motor vehicles continued to rise firmly by 4.4% (vs 5.2% in June) for the second month in a row.  Separately, the consumer confidence index rose to 32.5 in August (vs 30.2 in July). Consumers showed a positive outlook as overall livelihood, income growth, employment, and willingness to buy durable goods advanced for the first time in three months.   Today’s reports signal that the Japanese economy continues to recover, mostly due to catch-up production gaps and the reopening effect. Industrial production rose in July for the second month in a row Source: CEIC Outlook for 3Q GDP and Bank of Japan policy The recent data releases from Japan are positive. Labour market conditions appear to have tightened while the growth outlook for the current quarter is also promising as monthly activity data and survey data have improved more than expected. Currently, we expect third-quarter GDP to grow 0.3% quarter-on-quarter sa (vs 0.5% in 2Q22), but an upside revision is on the way after confirming PMI and core machinery orders in two weeks. As for inflation, if the Japanese yen continues to weaken, hitting the 140 handle, then inflation could climb up to 3.0% year-on-year by year-end. We believe the recent positive outcomes are not good enough for the Bank of Japan to change its policy stance yet as it believes the recovery is still very fragile. On the other hand, Governor Haruhiko Kuroda pledged over the weekend to maintain the easing policy to support growth. Thus, we expect the Bank of Japan to stay pat at its September meeting.  Read this article on THINK TagsRetail sales Industrial Production Consumer confidence Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The USD/JPY pair once again showed its commitment to following the US dollar more than the stock market. Even the EUR/JPY has moved away from correlations with the stock market, leaving this function to the cross rate with the British pound - GBP/JPY. In today's Asian session, USD/JPY moved above the linear resistance of the embedded price channel line (139.08) and overcame the July 14 peak at 139.39. Now the price has opened a target at 141.00, formed by the upper line of the price channel. The Marlin Oscillator is growing, when the price reaches the target of 141.00, Marlin will begin to experience pressure in the overbought zone. A correction is now possible from this level. The price is growing above the balance and MACD indicator lines on the four-hour chart, the Marlin Oscillator turned up without reaching the border with the bears' territory. We expect continued short-term growth.     Relevance up to 04:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320500

  Previous trading plans in USD/JPY pointed to possible increase in prices. Accordingly, the pair updated the monthly high yesterday, climbing above 139.3. Plan: Development: Congratulations to those who followed the strategy! The quote moved by as much as 6,000 pips! Long positions can now be closed to gain profit. The trading idea was based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day!   Relevance up to 09:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320530

The sell-off in bonds has continued to offer support to the dollar, with DXY touching 110.00 yesterday. Today, we think that a decent US jobs report (we expect 250k) might be enough to cement 75bp September hike expectations and keep the bullish sentiment on the dollar alive. USD/JPY acceleration above 140 may revamp risk of FX interventions Will today's US jobs data be enough to trigger another bullish dollar reaction? USD: Decent payrolls may be enough to keep supporting the dollar The ongoing major bond sell-off continues to have a net-positive effect on the dollar, and DXY briefly traded at 110.00 yesterday after another drop in all G10 currencies against the greenback. All considerations on whether the dollar rally is truly overstretched and bound for correction will likely have to wait for today’s jobs numbers out of the US. This is because the current market pricing for the Fed rate path still leaves some room for hawkish re-pricing. A 75bp rate hike in September is not fully in the price (currently 68bp), and despite the recent flattening in the rate expectations curve, further evidence of tightness in the jobs market can encourage speculation about a 4.0%+ peak rate and/or prompt the residual rate cuts (worth around 35bp) for 2023 to be priced out. The question now is whether jobs data will be enough to trigger another bullish dollar reaction. Our US economist expects a 250k headline read today: a widely expected slowdown from July’s 528k surprise, but with the unemployment rate staying at 3.5%, no slowdown in wage growth and the lack of qualified staff still being the main hindrance to job growth, the overall message for investors may still be broadly encouraging. We suspect that the actual consensus is lower than the 300k indicated by major data providers, as the ADP numbers released earlier this week likely triggered revisions lower in market expectations. Our suspicion here is that the market may not really need a big surprise to fully price in a 75bp hike in September, and a respectable jobs report may be enough to trigger another leg higher in the dollar today. A break above 110.00 in DXY may unlock further upside for the dollar. Francesco Pesole EUR: Ready to re-test 0.9900 The main data release to watch today in the eurozone is PPI figures for July, which should mark a clear acceleration although will likely have limited market implications. EUR/USD has recovered a bit of ground in overnight trading, likely on the back of the news that Russia should resume gas flows through the Nord Stream pipeline at 20% of capacity on Saturday. It is, however, a quite limited positive reaction by the euro, which likely denotes how markets remain very cautious to price out the risks of a complete cutoff in gas supplies in the coming months.   As per the USD section below, we see the potential for another round of dollar appreciation today after the NFP, which may force a re-test of 0.9900 in EUR/USD before markets close for the weekend. Francesco Pesole JPY: Getting too weak for comfort? USD/JPY pushed above 140 yesterday without much fanfare. Shorter-dated implied option volatilities were still around the 12% area (versus 15%+ a few months ago) suggesting investors have downscaled fears over possible Japanese FX intervention to sell USD/JPY. While we all acknowledge that Japanese authorities would be trying to turn back the tide here (USD/JPY is above 140 for good macro reasons) we should not discount intervention completely. The last time USD/JPY was above 140 in the late 1990s, the Japanese were intervening. Any sharp near-term move to the 142/143 would probably spark a much sharper verbal protest from Japanese authorities and put intervention back on the agenda. Chris Turner CEE: US dollar strikes back Friday's calendar in the region is empty and CEE FX should absorb yesterday's drop in EUR/USD. Additionally, today's US payrolls could come into play and potentially trigger this week's gains correction. As we mentioned yesterday, we see the gains of recent days as overdone, leaving the region vulnerable to global news flow. We see the Hungarian forint as the most vulnerable at the moment, benefiting from Tuesday's National Bank of Hungary decision and headlines from the negotiations between the government and the European Commission. However, the gains are mainly driven by positive sentiment and are not underpinned by rising interest rate differentials. At the same time, the forint remains heavily dependent on gas price movements, further complicating the current situation. The same story applies to a lesser extent to the Polish zloty, but it may benefit from Wednesday's market rate hike following surprisingly high inflation. We also see weaker values for the Czech koruna, which is below the Czech National Bank intervention level of 24.60-24.70 EUR/CZK this week. The daily central bank balance sheet data suggests that the CNB basically did not need to intervene the previous week, and the last few days do not suggest central bank activity either. However, if EUR/USD continues to move lower, the CNB can be expected to return to the market. Frantisek Taborsky Read this article on THINK TagsYen Jobs FX Daily FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Asian markets in limbo ahead of US jobs report while Asian FX feels the heat from USD strength.  Source: shutterstock Macro outlook Global markets: The slow bleed in US equities continues to show signs of clotting, though there was still a small fall from the NASDAQ yesterday even though the S&P500 managed to eke out a slight (0.3%) gain on the day. Futures markets are not signalling any intent ahead of the September payrolls release later today. Shorter dated US treasuries trod water yesterday. The yield on the 2Y note rose only 0.6bp – essentially flat – though 10Y yields kept pushing higher and added 6.1bp to take them to 3.253%. We still think there is a little more upside to come from these over the coming weeks, but let’s see how payrolls pans out first before we start thinking about direction too seriously. The EUR didn’t manage to buck the rest of the G-10 for long, and it has dropped back below parity against the USD to stand at 0.9948 now. That move has given other G-10 currencies another push lower, with the AUD now at 0.6789 after a weak day yesterday. Cable has dropped through another big figure, and is currently trading at 1.1545, virtually back to Covid-lows. And just as we intimated in yesterday’s note, the JPY did indeed breach 140, and is at 140.07 now. What’s going to stop the USD run? Right now, it’s very hard to come up with a convincing-sounding answer to that. Asian FX had a lousy day yesterday. The KRW was the worst-performing currency, pushing back up through 1350. The THB, PHP and SGD all lost around 0.4-0.5% vs the USD on the day. The latest comments from the Fed’s Bostic, that the Fed still has “work to do” to control inflation, add nothing to the fed/inflation/rates picture. Other regional news that may weigh on markets today includes China’s latest battle to keep Covid under control, involving more lockdowns in Shenzen, Chengdu and Dalian, more US restrictions on technology exports to China, and continued tension across the Straits of Taiwan. G-7 Macro: As mentioned, it is US payrolls Friday today. The median forecast on Bloomberg is for employment growth of just under 300,000 with an unchanged (3.5%) unemployment rate and average hourly earnings growth of 5.3%YoY.  Not much else matters today. Korea: Headline inflation slowed to 5.7% YoY in August (vs 6.3% in July) after six months of accelerating. The figure was also lower than the market consensus of 6.1%. The seasonally adjusted monthly growth rate declined by -0.23% for the first time since October 2020, mainly due to fuel-tax cuts and a drop in gasoline prices. We think inflation has now passed its peak.  But fresh food prices are still expected to rise further in September and manufactured food prices are also scheduled to rise after the Choseok holiday. Also, utility fees - city gas and power – will rise again in October, and some local governments are planning to increase service fees too. Consequently, inflation will likely remain above 5% until the end of the year.  The Bank of Korea (BoK) will take some comfort from today’s data but will continue to stay on a hiking path at least until the end of the year. However, the weaker-than-expected inflation print supports our view that the BoK will end its hiking cycle at 3.0% in November. What to look out for: US non-farm payrolls South Korea CPI inflation (2 September) US non-farm payrolls, durable goods orders and factory orders (2 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The yen has weakened to the lowest level since 1998, with the USDJPY popping above the 140 handle. Through the week, the pair rose 1,9%. In a period of economic uncertainty, usually traders would expect the yen to get stronger on safe-haven flows. Is the yen no longer a safe haven? There's more to the picture. And that could help us understand if there is a correction coming or the trend will continue. The driving forces In the short term, the dollar has gotten stronger ahead of NFP data. This is because traders are banking on the employment data to be strong, well above the "normal" 200K rate seen before the pandemic. With fast growth in jobs, the Fed would have free reign to keep hiking, pushing yields even higher. So, from that we can see a potential source of a correction in the near term: if NFP figures disappoint. After the blow-out figure from last month, investors might be a little overly optimistic about a beat in jobs creation, which means even if the figures come in as expected, it could disappoint the more speculative traders. The bigger picture The short term dynamics are an example of the effects of the long-term situation. The major deviation between the two premier safe haven currencies is, broadly speaking, a difference in monetary policy. The US is facing high inflation, prompting the Fed to raise rates. Japan has relatively low inflation (even though it has poked above target recently), and rates have remained negative. With the Fed pursuing an aggressive hiking policy, the yield spread has widened, making it attractive for carry trading against the yen. The potential for a reversal is that Japan starts experiencing inflation and forces the BOJ to start easing. The weaker yen translates into higher import prices, which in turn implies inflationary pressures. However, the global slowdown could also be translating into lower retail sales in Japan, which in turn minimizes the inflationary pressure. As a result, the BOJ can remain apart from the other central banks desperately fighting inflation, and instead work on promoting economic growth. It's all about the expectations A lingering question might be: Sure, the Fed is raising rates, but inflation is much higher than interest. Doesn't that mean a real negative rate? Yes, it does. However, the inflation that we're seeing now is in the past. It's comparing prices now to prices a year ago. What matters for investors is how much inflation is expected over the next period. Fed tightening implies that inflation should get under control, meaning that holders of US bonds will get the benefit of higher interest rates and lower inflation. Meaning that forward yield expectations are still positive - or, at least, better than what traders might expect to get from yen bonds. While the BOJ is on an accommodative track, inflation would have to increase substantially before rates rise. Meaning there is more inflationary risk in a Japan that isn't actively fighting inflation, than in a US that is actively trying to get prices down. It isn't that the yen isn't a safe haven, it's that the US has moved more into offering a better rate of return on fixed income.

Technical analysis: USD/JPY has been trading upside as I expected. The price reached my first upside objective at 140.45 and there is possibility to test second upside objective. Trading recommendation: Due to the strong upside momentum and upside trend, I see potential for further growth. Watch for potential buying opportunities on the intraday dips with the upside objective at the price of 146.00. MACD oscillator is showing strong upside reading with no signs for the reversal. Key support is set at the price of 138.20     Relevance up to 10:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291179

It has been a week to forget for the Japanese yen, as USD/JPY has climbed 2.23% and has pushed across the symbolic 140 line. In the North American session, USD/JPY is trading at 140.57, up 0.26% on the day. US Nonfarm Payrolls within expectations There was plenty of anticipation ahead of today’s nonfarm payrolls, with a consensus of 300 thousand. A wide miss of this mark could have triggered some sharp movement from the US dollar, as the Fed is relying on a strong labour market in order to continue delivering large rate increases. In the end, nonfarm payrolls was pretty much as expected, with a gain of 315 thousand. The dollar’s reaction has been muted, with USD/JPY posting small gains in the North American session. Dollar/yen punches above 140 The US dollar has flexed its muscles this week and has pushed the ailing yen above the 140 line. With the yen at its lowest level since 1998, speculation has risen that Japanese officials might intervene in order to boost the yen. In truth, the same concerns were aired when dollar/yen broke above 125 and then 130. There is no magic about the 140 level, keeping in mind that the last time Japan intervened to boost the yen was in 1998, during a financial crisis in Asia, when USD/JPY hit 146. In the past, Japan’s Ministry of Finance has warned that it is watching the yen’s depreciation with concern, but the lip service has not translated into any action. The Bank of Japan has zealously defended its yield curve control policy (YCC), which has kept a tight lid on the rates of Japanese government bonds, and the widening US/Japan rate differential has led to a sharp depreciation of the yen. Rather than outright currency intervention, the BoJ could shift its YCC in order to prop up the yen. However, the BoJ hasn’t shown any interest in such a move, as its primary focus has been keeping rates ultra-low in order to boost the fragile economy. Bottom line? The yen has more room to fall, and a forceful response from Tokyo doesn’t appear likely anytime soon. . USD/JPY Technical USD/JPY has support at 140.12 and 138.91 The next resistance line is at 141.84, followed by a monthly resistance line at 144.73 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen edges lower as NFP close to forecast - MarketPulseMarketPulse

At the close on the New York Stock Exchange, the Dow Jones fell 1.07% to a one-month low, the S&P 500 fell 1.07%, and the NASDAQ Composite fell 1.31%. Chevron Corp was the top performer among the components of the Dow Jones index today, up 2.31 points or 1.49% to close at 157.85. Salesforce.com Inc rose 0.16 points or 0.10% to close at 153.69. Walgreens Boots Alliance Inc rose 0.01 points or 0.03% to close at 35.27. The losers were 3M Company shares, which lost 3.98 points or 3.17% to end the session at 121.65. Honeywell International Inc. shares rose 2.01% or 3.84 points to close at 186.89, while Procter & Gamble Company shed 1.78% or 2.48 points to close at 137.16. Leading gainers among the S&P 500 index components in today's trading were CF Industries Holdings Inc, which rose 4.34% to hit 106.86, Hess Corporation, which gained 3.83% to close at 120.91, and also shares of The Mosaic Company, which rose 3.79% to end the session at 54.84. The biggest losers were DISH Network Corporation, which shed 4.49% to close at 17.01. Shares of Generac Holdings Inc shed 4.13% to end the session at 223.39. Quotes of Zebra Technologies Corporation decreased in price by 3.92% to 297.60. Leading gainers among the components of the NASDAQ Composite in today's trading were Venus Concept Inc, which rose 54.87% to hit 0.54, Sunrise New Energy Co Ltd, which gained 31.46% to close at 2.80. , as well as shares of Advanced Human Imaging Ltd ADR, which rose 29.90% to close the session at 1.26. The drop leaders were PolyPid, which fell 73.47% to close at 1.43. Shares of Shuttle Pharmaceuticals Inc lost 71.56% to end the session at 14.90. Quotes of ShiftPixy Inc decreased in price by 33.92% to 13.60. On the New York Stock Exchange, the number of securities that fell in price (1,797) exceeded the number of those that closed in positive territory (1,297), while quotes of 136 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,338 companies fell in price, 1,371 rose, and 257 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.35% to 25.47. Gold futures for December delivery added 0.70%, or 12.05, to $1.00 a troy ounce. In other commodities, WTI October futures rose 0.59%, or 0.51, to $87.12 a barrel. Brent oil futures for November delivery rose 1.02%, or 0.94, to $93.30 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.17% to 1.00, while USD/JPY fell 0.02% to hit 140.18. Futures on the USD index fell 0.12% to 109.55.       Relevance up to 04:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291315

  The dollar continues to grow against the Japanese yen, but the reversal signs of the indicators are already stronger. On the daily chart, this is a reversal of the Marlin Oscillator. The price has not yet reached the target level of 141.00 along the line of the price channel of the higher timeframe. The pair still has the strength to work out this level, after which the price may move into a medium-term correction. The target of the correction may be the area of the embedded line of the price channel at 137.90. Consolidating under the MACD line will complicate the type of the expected correction, perhaps it will be a long flat. The price is growing above the balance and MACD indicator lines on the four-hour scale, the Marlin Oscillator is developing sideways. A small upside potential remains, after it dries up, the price is likely to decline. First target at 139.10.     Relevance up to 04:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320750

With USD/JPY now above 140, we have been asked several times whether the yen has lost its safe haven status. We think two factors are important drivers here: the nature of this year's shock which has seen Japan's trade surplus wiped out, and the extreme juxtaposition of Fed and Bank of Japan policy. Don't bet on a USD/JPY turn this year Yen loses its safe haven shine With USD/JPY trading above 140 and financial assets under pressure, one could think that the yen is losing its status as a safe haven currency. The data support that idea. In 2020, when the world was rocked by the pandemic, USD/JPY had a 0.35 positive correlation with the MSCI World equity benchmark. That meant that when equities fell, the JPY typically outperformed against the dollar – i.e. JPY as a perceived safe haven. This year the USD/JPY correlation with equities is now zero – suggesting the JPY has lost some safe haven properties. Why? I’d say it’s down to two main factors – a) the nature of the crisis and b) the juxtaposition of the US and Japanese macro-financial policies.  On the former, the war in Ukraine has seen energy prices surge. Given that Japan imports all its fossil fuel energy, Japan’s terms of trade have collapsed – that is the price Japan receives for its exports versus what it pays for its imports. That is a large negative income shock. That has been most visible in Japan’s trade account. Last summer Japan was earning JPY6trn a year on trade. Over the last 12 months, that trade surplus has swung to a JPY6trn deficit on higher energy bills. A safe haven currency typically needs to be backed by a strong trade surplus – such that there is a natural demand for a currency in a crisis. The JPY has lost that backing from trade. On the US-Japan story, the US Federal Reserve and the Bank of Japan (BoJ) are just about as far apart as you can get.  The hawkish Fed has raised rates aggressively this year and promises to do more. The BoJ is one of the very few dovish central banks in the work (joined recently by the People's Bank of China). It is still engaging in quantitative easing. In practice, this now means that holding a 3m USD deposit pays 3% per annum. Hold a 3m JPY deposit and you will still be charged 0.10% for the pleasure. This 3%+ spread in rates really raises the bar for the JPY to outperform as a safe haven currency. JPY would rally if equities fell hard enough... Two final points – I suspect that if US equities fell hard enough that the Fed tightening cycle was substantially re-priced lower (and we haven’t seen too much of that this year), the JPY would outperform again and USD/JPY would drop. I also suspect USD/JPY is moving into a zone where Japanese policymakers will show more overt concern – they intervened to sell USD/JPY back at these levels in the late 1990s. But equally, we are a long way from a 1980s Plaza-type accord to weaken the dollar in general. That would require the Fed needing to cut rates (highly unlikely this year) or the BoJ to hike rates (again unlikely). So given the way things are going this year, a move to 150 certainly can’t be ruled out.  USD/JPY and BoJ intervention levels. BoJ sold USD/JPY above 140 in the late 90s Source: Japanese Ministry of Finance, ING Read this article on THINK TagsYen Federal Reseve Dollar Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

  The Japanese yen began to fear the global crisis no less than European currencies. Yesterday, data on household spending for July showed a decrease of 1.4% against the forecast of -0.6%. On an annualized basis, growth decreased from 3.5% y/y to 3.4% y/y. Against the background of the strengthening of the dollar index by 0.39%, the yen weakened by 1.57%. On the upside, the price forcefully broke above the resistance at 141.08, opening a high target at 147.10, close to the price's all-time high in August 1998 (147.71). The Marlin Oscillator is high, but not overbought yet. On a four-hour scale, the price is rising significantly, the Marlin Oscillator is a bit restrained. It has all the conditions and grounds for entering the overbought zone. Nevertheless, a correction, a price respite on the way to the target of 147.10 is very likely, and the reversal area for a correction is not very high from the current price, around the level of 144.25 - between Fibonacci levels 261.8 and 271.0% of the growth branch on 2-8 August.   Relevance up to 04:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320997

Summary:  Markets are jumpy, with US equities trading back and forth over the key supports at the former lows of the cycle in the major indices. The action settled near those important support levels and then futures traded softer overnight in an Asian session that saw the downward spiral in the Japanese yen accelerating despite stern words from Japan’s Ministry of Finance. It seems only a change of course from the Bank of Japan has the chance of slowing the yen’s slide.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities continued to slide lower yesterday as the US 10-year yield advanced to close at 3.35% getting closer to the recent high of 3.5%. The culprit was the much stronger than expected ISM Services yesterday pushed the Fed Funds forward curve lower indicating higher policy rates for longer. S&P 500 futures fell 0.9% and is trading lower again this morning in early European trading hours sitting around the 3,897 level. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong stocks notably underperformed their mainland counterparts for the second straight session. Hang Seng Index lost 1.7% and Hang Seng Tech Index dropped 2.4% while CSI300 was flat. Heavyweight financial names HSBC (00005:xhkg) and AIA Group (01299:xhkg) tumbled nearly 3%. China internet names traded in the Hong Kong bourse also contributed to leading the indices lower, Alibaba (09988:xhkg) and Tencent (00700:xhkg) dropped about 2%, and Bilibili (09626:xhkg) fell by almost 6%. The Covid19-related lockdowns, a weakening yuan, the disappointing August trade data from China, and the rise in US interest rates hurt the market sentiment. Strong USD on the rampage once again While the focus is chiefly on the cratering Japanese yen (see more below), the US dollar is broadly stronger again and thriving on higher US treasury yields after a strong US August ISM Services data point yesterday, as well as on weaker risk sentiment. EURUSD found more separation from parity and traded to new lows briefly yesterday ahead of the ECB meeting tomorrow, while AUDUSD, for example, trades this morning below its lowest daily close for the cycle, if not below the intraday low of 0.6682 from July. The USDCNH bears watching as well, as 7.00 has now rolled into view. JPY downward spiral intensifies as global yields jump The USDJPY spike accelerated again yesterday in the wake of strong US data, as Market the world wonders how long Japan can allow the pressure from rising yield differentials globally to pile into the country’s currency, given the Bank of Japan’s insistence on capping yields out to 10 years under its yield-curve-control policy.  The situation has created a pressure cooker of a situation on the yen and tremendous volatility, which could get worse still if US 10-year treasury yields continue back higher toward the 3.50% peak from June. The next important economic data point for the US is Monday’s August CPI – and the next chart focus in USDJPY is 147.66 the 24-year high of 1998. Stern verbal warnings from Ministry of Finance officials overnight hardly even registered on the market. The BoJ must change policy for JPY to find its lows. Crude oil (CLV2 & LCOX2) Crude oil hits lowest since January as demand concerns have once again overtaken worries about supply with China lockdowns and restrictions on movements now impacting 46 cities. In addition, a surging dollar, weaker equity markets and central banks in hiking mode continue to negatively impact the general level of risk appetite. In Europe the energy crisis has raised concerns about a ‘Lehman’ moment with utilities buckling under the weight of growing margin calls. Instead of supporting prices, the token 100k b/d OPEC+ production cut announced on Monday has had the opposite effect with the market concluding the group worries about demand going forward. WTI futures slumped below $86/barrel while Brent dropped below $92. Focus on EIA’s Short-Term Energy Outlook for September and API’s weekly inventory data. US Treasuries (TLT, IEF) US Treasury yields rose sharply in the wake of the strong US ISM Services survey for August, which suggests that the US’ dominant services sector remains in strong expansion, while price pressures for the month eased. The 10-year yield benchmark traded near 3.33% this morning, above all but the highest two daily closes back in a mid-June spike to 3.50%. Above current levels, US treasury yields are likely to dominate focus across markets, likely driving US dollar and risk sentiment direction. What is going on? Signs of a flagging world economy send commodities lower One week into September, the Bloomberg Commodity Index trades down more than 4% with losses seen across all sectors led by energy and industrial metals. The prospect of aggressive Federal Reserved Monetary tightening has lifted the dollar to a record against a broad basket of currencies while the yield on ten-year US government bonds has climbed to 3.34%, just below the 3.5% June peak. In addition to rising interest rates, soon also from the European Central Bank, the market is also dealing with an energy crisis in Europe and lockdowns in China hurting growth and demand in both areas. With the stock market suffering declines and geopolitical tensions being elevated, some safe-haven demand has helped cushion precious metals, the best performing sector so far this month. Xi Jinping invokes “whole nation system” With the recent US restrictions on Nvidia selling its most advanced AI chips to Chinese customers Xi Jinping invoked the so-called whole nation system to coordinate and allocate resources for China to become fully independent from the technologies that the US is trying to curb going to China. This speech bolsters our view that the world is moving towards a bipolar world with more fragmented supply chains and economies. US ISM services in further expansion While the S&P Global Services PMI survey continued to signal weakness with a 43.7 revised print for August, the BLM’s historically more close watched ISM Services survey on the other hand expanded further to 56.9 from 56.7 in July, slightly above expectations. Business activity accelerated to 60.9 from 59.9, while the prices paid component remained elevated at 71.5, in contrast to the decline we saw to 52.5 for the manufacturing sector. New orders rose to 61.8 from 59.9 and employment rose into expansionary territory at 50.2 from 49.1. Norway says it is open to discussion of energy price caps in Europe Norway is the largest supplier of natural gas to Europe and the country’s prime minister Jonas Støre said the country is open to discussing shorter- and longer-term gas delivery arrangements that cap prices, saying that the discussions would have to occur with the country’s oil and gas producers, chiefly Equinor, but that it is important to not jeopardize production levels. France’s nuclear energy production is in free fall More than half of the fifty-six nuclear reactors are down due to corrosion issues on reactors which could take years to solve. Nuclear production is now at its lowest point, around 23,000 MWh per day on average versus 40,000 MWh in the same period last year. So far, this has not created a power emergency as electricity demand is usually not elevated during the summer (around 45 GWh per day). But it might become an issue when higher winter consumption will push electricity demand around 80-90 GWh on average. This could cause an electricity shortage at the worst time ever (see Chart of the Week : The energy crisis is hitting France, 29 August 2022). China’s exports in August slowed more than expected In U.S. dollar terms, China’s exports in August come in weaker at +7.1% y/y (Bloomberg consensus: +13% y/y; July: +18.0% y/y). The resurgence of pandemic control restrictions, production disruptions due to power rationing, weaker demand from U.S. consumers, and a high base last year contributed to the deceleration. 46 cities in China are implementing various degrees of lockdowns or restrictions on mobility, affecting nearly 300 million people and close to 25% of the country’s GDP. Imports also were slower than expected, coming in at +0.3% y/y (Bloomberg consensus +1.1% y/y; July: +2.3%). Australia assures it will remain a reliable LNG supplier Australia’s Minister for resources has again been called on to ‘pull the trigger’ and limit gas exports given the projections show Australia will have an energy shortage next year. The Minster said although it has the matter under control, it cannot guarantee it won’t be limiting exports. Japan imported AUD 17bn of the fossil fuel from Australia last year. As such Japan says it’s watching the situation closely. What are we watching next? Bank of Canada to hike rates today After a July rate hike of 100bps, Bank of Canada meets again today. The consensus is calling for a 75bps rate hike to bring rates to a restrictive territory, given that inflation continues to run well above target and economic demand is holding up well. The pace of tightening is however likely to slow down in October, and so the messaging will be key to watch at today’s meeting. Canada’s Ivey PMI for August is also out today after dipping sharply in July to just below 50. ECB meeting on Thursday A 75-bp hike that takes the policy rate to 0.75% is the favoured scenario, although not fully priced. To surprise the market and bolster its claim that it is serious about getting ahead of inflation, the ECB will have to move 100 basis points. Guidance will also be important, as the ECB is expected to take the rate to at least 1.5% through the December meeting (two more meetings after the meeting tomorrow). Several key points will be discussed at the EU emergency energy meeting on 9 September According to Reuters, the EU energy ministers will try to find an agreement on a gas price caps (yesterday, European gas jumped 31 % as Russia kept Nord Stream link shut) and on providing companies facing high margin calls emergency liquidity support (several utilities are already on the edge of bankruptcy in Germany and in Austria, for instance). The ministers will also focus on reforming more deeply the European electricity market. Two main options are on the table: the ‘Iberian exception’ and the Greek non-paper (see EU Emergency Energy Meeting : A Never Ending Story, 31 August 2022). Earnings to watch Today’s key earnings release is NIO which one of the most prolific EV-makers in China. Revenue growth is expected to slow down to 16% y/y in Q2 as Covid restrictions slowed down consumer markets in Q2. Expectations are looking for revenue growth to accelerate to 66% y/y and a narrower EBITDA loss of CNY 1.7bn. Today: People’s Insurance Co Group, Exor, Copart, NIO Thursday: Sun Hung Kai Properties, Sekisui House, Zscaler, DocuSign Friday: Dollar Stores, Kroger Economic calendar highlights for today (times GMT) 0900 – UK Bank of England Governor Bailey and others testify before Parliament Poland Rate Announcement 1230 – US Jul. Trade Balance 1230 – Canada Jul. International Merchandise Trade 1300 – US Fed’s Barkin to speak 1400 – Bank of Canada Rate Decision 1400 – Canada Aug. Ivey PMI 1400 – US Fed’s Mester (Voter) to speak 1600 – EIA's Short-Term Energy Outlook 1640 – US Fed Vice Chair Brainard to speak 1800 – US Fed Beige Book 1800 – US Fed’s Barr (Voter) to speak on Financial System Fairness & Safety 2030 – API's (delayed) Weekly Report on US Oil Inventories 2301 – UK Aug. RICS House Price Balance 0130 – Australia Jul. Trade Balance 0305 – Australia RBA Governor Lowe to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher       Source: Financial Markets Today: Quick Take – September 7, 2022 | Saxo Group (home.saxo)

The Japanese currency continues to depreciate against the US dollar. The closer the September meeting of the Federal Reserve, the worse the position of the yen becomes. Yesterday JPY set 2 anti-records at once. Historic fall The USD/JPY pair significantly accelerated its rise to the top on Tuesday. The quote soared by 0.6% and exceeded another 24-year high at around 143.28. What's more, yesterday's fall in the yen brought it closer to its worst annual performance ever. Since the beginning of the year, the yen has fallen against the dollar by almost 20%. This is more than in 1979, when the largest annual decline was recorded. Recall that this year the reason for the sharp weakening of the yen was the discrepancy in the monetary policy of Japan and the United States. At present, the Japanese central bank looks marginalized among its peers. While other central banks are raising interest rates to bring raging inflation under control, it has stubbornly kept the rate at extremely low levels. The Bank of Japan's dovish tactics are helping widen the gap between interest rates in Japan and the US, which is taking the most aggressive measures to combat inflation. In order to curb the rise in prices, this year the US central bank has already raised interest rates four times, twice by 75 bps. Now the market is evaluating the likelihood that in September the Fed will go for the third consecutive highest increase in the indicator, at 73%. Traders' confidence in the hawkish determination of US politicians is supported by optimistic US economic data. The index of business activity in the services sector for August was published on Tuesday. Last month, the indicator unexpectedly rose from the previous value of 56.7 to 56.9. This is much better than forecasts, as economists had expected to see the indicator drop to 55.1. Yesterday's statistics once again confirmed that the US economy, despite the rapid increase in rates, is still firmly on its feet. Therefore, at its next meeting, the Fed is likely to brush off the talk of a recession and follow the hawkish route at the same pace. This scenario puts an end to the yen. As the gap between Japanese and US interest rates widens, the JPY will continue to set anti-records. Where is the bottom? This morning the USD/JPY pair is still in a strong upward trend and is showing another achievement. The asset has broken through the level of 144. Analysts explain the current surge in quotes by a sharp increase in the yield of 10-year US Treasury bonds and a dovish statement by the BOJ. At the auctions in Tokyo, the yield of US Treasuries, inspired by positive US economic data, rose to its highest value since mid-June at 3.365%. Meanwhile, the yield on similar Japanese bonds approached 0.245%. This is very close to the upper end of the acceptable BOJ 0.25% trading range. Recall that earlier the Japanese central bank has repeatedly stated that it will not allow yields to rise above this value. Now, when the indicator is about to touch the key ceiling, the BOJ made another statement. On Wednesday, the BOJ announced that it is increasing planned purchases of Japanese government bonds as part of its regular open market operations from 500 billion yen to 550 billion yen. This decision greatly crippled the already weak Japanese currency and overshadowed its future prospects. The continuation of the USD/JPY pair rally is also evidenced by the technical picture. For now, the bulls are ignoring the overbought conditions of the RSI and are on their way to the rising resistance line since the end of April, which is in the 144.60 area. If bears continue to push to the upside of this level, the June and August 1998 peaks will be in focus. We are talking about the marks of 146.80 and 147.70 respectively.     Relevance up to 09:00 2022-09-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321027

Summary:  The combination of a nearly 6% drop in crude oil price, a retracement of the dollar to close to parity with the Euro and a 8bp fall in the 10-yar treasury yields have jointly put together an environment for the stock market to rally and snap a 7-day losing streak since the Jackson Hole. The Bank of Canada raise its policy rate by 75bps, as expected. August trade data from China was much weaker than expectation with both exports and import falling. Excluding inflation, real export growth was estimated to be negative and crude oil import growth in volume terms was negative in August. The news contributed to the fall in crude oil price yesterday. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  The U.S. equity markets bounced off from the trough of the post-Jackson Hole decline and snapped a 7-day losing streak to finish Wednesday decisively higher, S&P500 +1.8%, Nasdaq 100 +2.1%.  The move higher was largely driven by a confluence of macro factors: lower bond yields, and announcing new products at the company’s annual event.  lower US dollar, and lower crude oil price plus short covering and call option delta hedging. With a 5.7% decline in crude price, the energy space was the only sector in the S&P 500 that fell. Twitter (TWTR:xnys) surged 6.6% following a Delaware court rejected Elon Musk’s request to delay a trial into the reclination of his offer to acquire Twitter. Snap (SNAP:xnys) jumped 6.4% after the Verge magazine cited an internal memo from CEO Spiegel stating the company’s goals to grow its user base by 30% and bring up revenue by 20% by the end of 2022. Apple (AAPL:xnas) gained 1.4% after a new line of products at its annual event. Apple did not raise prices for its new iPhone 14 series.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Nick Timiraos at the Wall Street Journal (who is believed to be the Fed’s mouthpiece to guide market expectations) suggested that Fed Chair Powell’s “public pledge to reduce inflation even if it increases unemployment appears to have put the central bank on a path to raise interests by 0.75 percentage point rather than 0.50 point this month”. Fed Vice Chair Brainard pledged to fight against inflation “for as long as it takes” but also mentioned risks that might potentially be caused by over-tightening. The money market curve is pricing in a 78% chance a 75bp hike at the September FOMC. Treasury yields however fell across the curve as crude oil price went sharpy lower, 2-year yields -7bps, 10-year yield -8bps. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong stocks notably underperformed their mainland counterparts second day in a row.  Hang Seng Index lost 0.8% and Hang Seng Tech Index dropped 1.3% while CSI300 was little changed. Heavyweight financial names HSBC (00005:xhkg) and AIA Group (01299:xhkg) tumbled about 2%.  The short video and live streaming names dragged on the China Internet space, Kuaishou (01024:xhkg) -3.7%, Bilibili (09626:xhkg) -4.2%.  U.S. House Representative Dusty Johnson (Republican, South Dakota) introduced the Block the Tok Act, a bill that would if enacted, prohibit Tik Tok from accessing U.S. citizen’s user data from within China and block Tik Tok’s apps on U.S. government devices.  Tencent (00700:xhkg) is increasing its stake in French video game developer Ubisoft (UBIP:xpar) but the latter’s founder retaining majority control.  Following President Xi Jinping stressing China’s determination to “mobilize resources nationwide to achieve breakthroughs in core technologies in key fields” in a high-level reform planning meeting on Tuesday, semiconductor leader SMIC (00981:xhkg) gained 1.2%. China developer Soho China (00410:xhkg) jumped 11% after Chairman Pan Shiyi and CEO Pan Zhangxin Marita resigned.  The Covid-19-related lockdowns, a weakening yuan, the disappointing August trade data from China, and the rise in U.S. interest rates continued to pressure the sentiment of the stock market.     USDJPY holding up despite softer yields USDJPY eased after hitting highs of 145, but still remained above 144 in early Asian hours on Thursday despite softer US yields overnight. The threat of intervention remains as Japan’s final Q2 GDP released this morning suggests markets may continue to test the Bank of Japan’s resolve to keep an accommodative policy. Q2 GDP was revised higher to 3.5% q/q annualized from 2.2% earlier. 10Y JGB yields are also at 2-month highs and in close sights of the 0.25% cap. Verbal intervention has had little effect, and real intervention will need a coordinated effort and will only increase the volatility as long as the US yields are on the rise. The only real scope of a yen recovery will be seen if US economic data starts to deteriorate or Bank of Japan tweaks policy. Crude oil prices (CLU2 & LCOV2) Oil prices steadied in the Asian morning after steep declines in the last few days amid demand concerns especially with China pushing further with its zero Covid policy. Chengdu extended a lockdown in most of its downturn areas, raising concerns the restrictions will hurt oil consumption. A stronger dollar, despite softer yields, also weighed on investor appetite. Supply issues made little impact, even as EIA lowered its annual oil production targets, with domestic production now expected to reach 12.6mb/d, and raised its demand outlook, with annual petroleum usage rising 2mb/d through next year. The likelihood of an Iran nuclear deal in the near term is also fading. What to consider? Fed speakers, and another possible WSJ leak? Federal Reserve Vice Chair Brainard noted rates will need to rise further and policy will need to be restrictive for some time. She needs to see several months of low inflation readings to be confident inflation is moving down to 2% but how long it takes to get back to target will depend on a combination of continued easing in supply constraints, slower demand growth, and lower markups, against the backdrop of anchored expectations. Mester (2022 voter) reaffirmed that she is not yet convinced about inflation peaking yet, and she also spoke on the August jobs report, where she said they are beginning to see some moderations but labour market conditions remain strong. Besides, WSJ's Nic Timiraos wrote: "The Federal Reserve appears to be on a path to raise interest rates by another 0.75 percentage point this month in the wake of Chairman Jerome Powell’s public pledge to reduce inflation even if it increases unemployment." While the Fed is not yet in a blackout period, with Chair Powell set to be on the wires later today, there is little chance this could be a leak like last time. Still, money market pricing of a 75bps rate hike at the September meeting has picked up from 68% on Tuesday to 81% now. China’s exports in August slowed In U.S. dollar terms, China’s exports in August come in much weaker at +7.1% YoY (Bloomberg consensus: +13% YoY; July: +18.0% YoY).  Once adjusting the data with export price inflation, the real growth of exports may have turned negative in August YoY.  Export growth decelerated across destinations, except Russia (having risen to 26.4% YoY in August from 21.4% in July).   The growth of export to the U.S. was particularly weak, having turned to minus 4.2% YoY in August from a growth of 10.9% in July.  Imports growth was also slower than expected, coming in at +0.3% YoY (Bloomberg consensus +1.1% YoY; July: +2.3%). The weakness in import growth tends to indicate weak domestic demand.  The growth of imports from the U.S. slowed to -7.5% YoY in August from -4.3% YoY in July. Import volume growth for crude oil was negative at -9.4% YoY in August, little changed from -9.5% in July but import volume of coal bounced to a growth of 5.0% YoY in August from -22.1% in July. Import volume of iron ore declined to -1.3% YoY in August from a growth 3.1% in July.  The import volume of copper, however, increased to +26.4% YoY in August from 9.3% in July.     Australia’s economy grew stronger than expected YoY vindicating more rapid hikes are coming Australia’s A$2.2 trillion economy grew at 0.9% q/q in the second quarter (beating Bloomberg estimates), while growing 3.6% y/y also beating the 3.4% expected. Australia’s economic firepower came from record high commodity exports, with exports now accounting for 1% of GPD YoY. The data also showed the economy strengthened by a boost in retail sales with department store sales at record pace. Services and economic earnings were also able to offset the pull back in savings rates, which fell for the third straight quarter to 8.7%, as households are having to dive into their bank accounts to pay record high energy prices. AUDUSD vulnerable of another pull back The USD against the Aussie popped to its highest level since June 2020, after a Wall Street Journal article suggested Fed Chair Powell is committed to reducing inflation with a 0.75% hike likely in September. What also supports this is that stronger than expected US economic data continues to come through (with the most recent data showing the US services sector is healthy), validating the Fed has room to rise rates. Basically, the market is thinking the Fed has room to be more aggressive, while the RBA’s hikes are more subdued. Bottom line, you can’t fight the Fed. The technical indicators suggest the AUDUSD could also retest its lows, while the USDAUD could touch its April 2020 high. Australia assures its Asian customers it will remain a reliable LNG supplier; but it won’t guarantee anything Australia’s Minister for resources has again been called on to ‘pull the trigger’ and limit gas exports given the projections show Australia will have an energy shortage next year. The Minster said although it has the matter under control, it cannot guarantee it won’t be limiting exports. Japan imported A$17 billion of the fossil fuel from Australia last year. As such Japan says it’s watching the situation closely. Bank of Canada raised rates As expected, Bank of Canada hiked rates by 75bps bringing the rate to 3.25% into restrictive territory, given the central bank’s estimate of neutral rate is 2-3%. The tone remained hawkish, but lacked clear guidance as it reiterated that further hikes will be necessary to bring inflation to target, implying the BoC is not done yet and will move even further into restrictive territory. While growth is slowing and housing prices are down 18% since February, but short-term inflation expectations remain high, signalling a risk that elevated inflation becomes entrenched. NIO earnings Chinese EV maker NIO (NIO:xnys/09866:xhkg) reported better-than-expected revenue of RMB 9.57 billion due to pent-up demand. The company delivered 25,059 vehicles in Q2, a 14.4% growth from last year. Gross margins, however, decreased to 16.7% from 18.1% in Q1 this year and 20.3% in Q2 last year. Management’s guidance for Q3 delivery was 31,000 to 33,000 vehicles, below analyst expectations.  ECB rate hike in focus; what could it mean for EURUSD? The European Central Bank meeting will be in focus after plenty of chatter around front-loading rate hikes in the last few days. Most members have come out in support of a 75 basis point rate hike for the September, and the market pricing suggests 125 basis points between September and October meetings (so one 75bps and one 50bps). Only Philip Lane seemed to strike a different tone, saying that he would prefer step-by-step hikes to make sure the financial markets have time to absorb the tightening in a measured manner. August inflation for the Euro area, reported last week, also suggested further price pressures with a 9.1% YoY print from 8.9% YoY previously. Market pricing suggests a 67bps rate hike today, and a cumulative hike of 129bps by October or 157bps by year-end. With a 75bps rate hike not fully priced in for September, such a move along with commitment to do more front-loading could be positive for EURUSD in a knee-jerk. Still, with energy crisis in focus and EU emergency meeting scheduled for tomorrow, it may remain hard for EURUSD to stay above parity. Only a 100bps rate hike will really count as a hawkish surprise. If ECB decides to go for 50bps, we could see EURUSD test the cycle lows. New dockers strike in the United Kingdom (UK) The UK has been facing recurring transport disruptions over the past few years. This is related to Brexit, Covid and now higher cost of living. A dockers strike at Felixstowe port (the country’s first container port) ended a few days ago. But a new one is looming at the port of Liverpool. The dockers trade union is calling for a strike from 19 September to 3 October (at least) after negotiations to raise salary failed. This matters a lot. The port of Liverpool is a key hub for transatlantic sea transport. If inflation continues to rise (which is likely), expect much more strikes to come and not only in the transport industry. Social tensions will probably increase sharply in the coming months.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – September 8, 2022 | Saxo Group (home.saxo)

The Japanese yen remains under pressure. In the North American session, USD/JPY is trading at 143.96, up 0.14%. The yen came within a whisker of the 145 line on Wednesday, touching 144.99. Japan sounds alarm as yen slips The yen continues its nasty slide. USD/JPY has jumped about 8% since August 1st, and continues to record new 24-year highs. It’s not just that the yen is trading close to 145, but the speed at which the Japanese currency is depreciating. USD/JPY broke above the 140 line on September 1st and the dollar onslaught has continued without letup. The yen’s most recent fall has, predictably, resulted in Japanese officials sounding the alarm. Masato Kanda, Japan’s top currency official, said today that the government and the BoJ were “extremely worried” about the recent yen moves, and are watching the currency markets with a strong sense of urgency. Kanda added that “the government is ready to take action in the currency market”, but his remarks have done nothing to stop the yen’s downswing. Investors have heard this rhetoric time and time again, without any action from Tokyo. The last time Japan intervened in the currency markets to prop up the yen was in 2011, and the BoJ is committed to an ultra-loose policy to support growth, and Governor Kuroda has ruled out tightening policy until inflation remains sustainably above 2%, along with higher wage growth. Inflation is running close to 3%, but this is mainly due to higher import costs, which the BoJ considers a temporary cause of rising inflation. With the government unlikely to intervene and the BoJ suppressing any rate increases, the yen is at the mercy of the US/Japan rate differential, which has been moving higher. With the Fed expected to remain aggressive, the yen is likely to continue heading lower. USD/JPY Technical There is support at 142.75 and 141.48 USD/JPY is testing resistance at 143.81. Above, there is resistance at 144.70, which was tested on Wednesday This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The USD/JPY pair stopped rising at the intermediate resistance on the way to the target of 147.10. The resistance area is set by the range of Fibonacci levels of 261.8 and 271.0% (shown on H4). The weakening of the yen was stopped by verbal interventions by Finance Minister Shunichi Suzuki and increased purchases of government bonds by the Bank of Japan. The Marlin Oscillator on the daily chart is reversing from the overbought zone, which in turn confirms the price reversal. We are waiting for the pair at the nearest support of 141.13. Going under it will open the second target at 139.13. We do not expect a price increase to 147.10. The price has consolidated below the Fibonacci level of 261.8% on the H4 chart, the Marlin Oscillator is about to go into the zone of negative values, after which it will increase pressure on the price. The support of the Fibonacci level of 238.2% is important, slightly below which (142.55) is the MACD line. Overcoming the MACD line will intensify the fall in prices.     Relevance up to 04:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321226

Summary:  Today we look at a sharp sell-off in the US dollar inspired in the wake of the ECB meeting yesterday and especially after Bank of Japan Governor Kuroda comments on JPY volatility overnight. The USD decline has helped to boost sentiment further as the US S&P 500 retakes 4,000, but equity traders should keep a wary eye on treasury yields, which bounced back sharply yesterday on a strong US jobless claims number and the latest firm rhetoric from Chair Powell. The week ahead in earnings and macro and more on today's pod, which features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source:Podcast: USD stumble adds to sentiment boost | Saxo Group (home.saxo)

Summary:  A sharp US dollar sell-off has developed, one that materialized suddenly overnight and was extended by comments from Bank of Japan Governor Kuroda that inspired a steep plunge in USDJPY after its recent aggravated extension higher. The ECB meeting yesterday brought more hawkish than expected guidance, theoretically helping the EURUSD back-up well above parity, though the timing of the bulk of the rally in Asian hours offers cause for head-scratching. FX Trading focus: What is the quality of this USD sell-off…and JPY rally? The USD move overnight looked suspicious as it came just after midnight GMT – perhaps led by a run on stop orders above yesterday’s post-ECB meeting high around 1.0030? Hmm – the move was broad-based, so not entirely convinced. China set its yuan reference rate sharply higher than expected about an hour later, and then the BoJ Kuroda comments discussed below came on board. The move in EURUSD happening in Asian hours rather in the context of the ECB meeting having already sharply boosted EU yields earlier in the day yesterday has me scratching my head and wondering at the quality of this USD move lower – and wanting to reserve judgment on what is going on here at least until the end of today’s/this week’s action and possibly until we see how the market treats the EU’s power price cap plan after the summit on the matter in Brussels today and then next Tuesday’s US August CPI release. It is no major surprise that some stern words from Bank of Japan Governor Kuroda were able to inspire a sharp consolidation lower in USDJPY after its wild extension higher recently that seemed a bit excessive relative to the support from coincident fundamental indicators like global long sovereign yields/spreads. After meeting Prime Minister Kishida overnight, Kuroda said that “sudden moves in foreign exchange rates increase uncertainty for firms and are undesirable.” And “ a two to three yen move against the dollar in a single day is very sudden.” A couple of figures on a comment are easy, more would require a more notable retreat in global yields and commodity prices and perhaps real intervention. By the way, an FT article with the provocative title “Can Japan feed itself” makes clear that food prices have been capped by the Japanese supermarket industry for some time now at the retail level and are set for a significant reset on October 1. This will mean a leap in the official CPI numbers from the month of October. At the same time, PM Kishida is readying a new raft of packages aimed at supporting lower income households cost-of-living challenges. There is a chicken and egg problem here with price controls and preventing cost-of-living increases on the one hand and the Bank of Japan theoretically waiting for the Godot of wages beginning to rise to signal that inflation is becoming more embedded. With cost-of-living support, the wage earner is less likely to demand a raise…. Something is going to have to give, but it’s hard to believe that a stern few phrases from Kuroda will do the trick, although this could be the beginning of a far more choppy JPY trajectory from here, as from these levels or lower in the JPY, the Ministry of Finance may be willing to throw billions of intervention into the mix in an attempt to halt further JPY declines. Chart: USDJPYBoJ comments overnight have triggered a significant slide in USDJPY, if one not yet as large as the two-day rallythat sent the pair soaring all the way to the cusp of 145.00 two days ago. A retreat and close anywhere close to 140.00 today would create an interesting shooting star formation for the weekly candlestick, although really the pair needs to wipe out a great proportion of the move from the pivot low in early August at 130.40 to suggest a more profound reversal is afoot here. Meanwhile, a close today in the 142-143 range suggests that little harm has been done, even tactically, to the USDJPY up-trend. The ECB meeting brought far firmer guidance from the central bank than expected, as German 2-year yields traded some 30 basis points higher today relative to the close the day before the meeting – to a new cycle high north of 1.40% before that move faded sharply today back toward 1.30%. The 75-basis point hike was the largest in the ECB’s history and is expected to be repeated at the late October meeting after the guidance that another move of that size can’t be ruled out in yesterday’s presser. But Europe needs sustained relief on the energy/power price front for a more sustainable rally. Curiously, the market waking up to EURUSD trading well north of parity this morning had nothing to do timing-wise with the ECB as it unfolded overnight. Yesterday, the market seemed unsure with what to do with the euro in the immediate aftermath of the decision and guidance. For EURUSD, a close above 1.0100, which was teased today, is needed to set the focus toward the next area into 1.0350, while a close back below parity today would suggest that the overnight pump was merely linked to poor liquidity, order flow and the Bank of Japan verbal intervention mentioned above. An election is set this weekend for Sweden, with the currency market not particularly holding its breath in anticipation. EURSEK has corrected sharply lower in fitting with the strong risk sentiment of the moment, but has a lot of work to do to set the focus back lower, at least a move below 10.50. As I am writing this, the Bank of England has announced that it is moving back its next meeting from next week to the following week, likely due to Queen Elizabeth’s death and the mourning period, but this will give the Bank the luxury of having a look at the FOMC meeting the day before and whether it needs to stiffen its message or even hike more than it anticipated if sterling is struggling to new lows going into the meeting. Table: FX Board of G10 and CNH trend evolution and strength.The USD momentum has shifted sharply lower over the last couple of days, but reserving judgment at least until the daily/weekly close today. Elsewhere, look at CHF continuing to power on despite the ECB hawkish guidance yesterday. Table: FX Board Trend Scoreboard for individual pairs.It’s looking like cross-over day again for EURCHF after the ECB failed to sustain the recent rally despite the mark-up of EU yields. USDCHF has also rolled over and is threatening a turn lower, although looking at the chart, there is a lot of choppy range to work with yet. Upcoming Economic Calendar Highlights 1230 – Canada Aug. Net Change in Employment / Unemployment Rate 1600 – US Fed’s Waller (Voter) to speak 1600 – US Fed’s George (Voter) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-weakens-broadly-but-are-the-drivers-sustainable-09092022

The Japanese currency against the US dollar is the weakest of the main world currencies in 2022, having lost more than 20% in the last 12 months. As a result of such a strong drop, the USD/JPY pair's quotations have reached their highest level since 1998. This year, the yen intervention took place, which the market may again fear. The severity of the yen's drop may have been due to divergence in the Bank of Japan's monetary policy toward the world's other main central banks. The Fed raises interest rates, the ECB does, and the Bank of England or the Bank of Australia also raise interest rates. Meanwhile, the Bank of Japan continues to loosen monetary policy and keep market interest rates close to zero, also applying yield curve control. Nevertheless, the recent slump in the Japanese currency may have started to cause concern among Japanese policymakers and decision-makers. Source: Conotoxia MT5, USD/JPY, MN Japanese authorities are concerned about JPY weakness Japan's Vice Minister of Finance for International Affairs Masato Kanda said on Thursday that the government is "extremely concerned" about the yen after it weakened to levels seen 24 years ago. Kanda pointed out the recent "speculative, one-sided sharp movements of the yen", reasoning that the currency's decline cannot be explained simply by looking at the fundamentals and describing it as "excessive volatility". He assured that the government was coordinating actions with other countries, including the United States, adding that the government was ready to act on the currency market and was not ruling out any course of action, as reported by BBN/DJ. In addition, there has already been a meeting between Bank of Japan Governor Haruhiko Kuroda and Prime Minister Fumio Kishida, which may also have raised concerns among foreign investors. Technical situation - USD/JPY From a charting point of view, the USD/JPY pair's price has reached a potential resistance defined by the line drawn after the previous peaks in recent days. This line and the line drawn after the lows could form a possible expanding wedge formation. In the shorter term, this potential support could be located at the trendline and at the equilibrium of corrective movements, which at the moment falls in the vicinity of 141.10 JPY. Source: Conotoxia MT5, USD/JPY, D1 What is being said about the yen? In a statement to Bloomberg, the head of the currency strategy at Nomura Securities Co. in Tokyo said that there had been a three-way discussion between the BOJ, the Ministry of Finance and the Financial Services Agency and that this has a significant psychological impact on the market participants. Yujiro Goto also added that it also has something to do with the fact that if there was any plan to intervene, the government would coordinate with the BOJ. Goto pointed out that the risk of intervention and a change in BOJ policy or guidance this month has increased compared to a few weeks ago. In the summary of the Nomura Securities Co. representative statement, it was noted that some orders that accompanied bets on the USD/JPY above 145 could also be triggered.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Fears of intervention targeting the Japanese yen (conotoxia.com)

USD/JPY:   The chart shows the movement of USD/JPY in the hourly (H1) chart. Indicators show an upward movement towards £144.10 per $1. This support level may become decisive for the development of the pair. In case of its testing and breakdown, quotes will rush towards £145.00. Otherwise, the daily trend will reverse towards £143.00 for $1. Good luck!         Relevance up to 08:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321380

Summary:  Ukrainian success in taking back significant territory from Russia over the weekend has driven a cautious further recovery in the euro and sterling at the open of trade this week. Elsewhere, yields have jumped higher, helping drive new yen weakness and taming risk sentiment as the US 10-year treasury benchmark trades near the cycle highs since June. Focus this week is on tomorrow's US August CPI release, the most important data point ahead of next week’s FOMC meeting.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities Friday on a strong note up 1.5% and S&P 500 futures have extended their gains overnight touching the 4,100 level because before receding to around the 4,085 level in early European trading hours. The US 10-year yield continues to move higher trading at 3.34% and if it sets a new high for the recent cycle it will probably cause headwinds for US equities so watch the US bond market. Next big macro event is tomorrow’s US August CPI report which is expected to print –0.1% m/m suggesting inflation is beginning to cool. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong, Shanghai, and Shenzhen are closed today for the mid-autumn festival holiday. Last Friday, Hang Seng Index soared 2.7%, snapping a six-day losing streak following China’s August inflation data surprising to the downside and raising hope for more monetary easing to come from the Chinese policymakers. Chinese property names rallied on market chatters about unconfirmed stimulus measures from policymakers to boost the ailing property sector. Ahead of the mid-autumn festival, catering stocks gained. CSI 300 climbed 1.4%, led by property, dental services, infrastructure, and digital currency.  Northbound inflows into A-shares reached USD2.1billion equivalent last Friday, the largest inflow in a single day since the beginning of the year. Ukrainian success on the battlefield drives EUR and GBP strength The surprise offensive and the re-capture of a key transport hub in the northeastern sector of the front after recent focus on operations in the south caught the market by surprise and has seen the euro and sterling rebounding versus the US dollar in early trading this week, with EURUSD trading to new local highs well clear of 1.0100 briefly overnight before edging back lower. Likewise, GBPUSD pulled north of 1.1650 before treading water back toward 1.1600. It will take some time and further developments to assess whether Ukraine can capitalize on its gains and this in turn triggers a new stance from Russia on its energy policy. JPY crosses back higher as yields rise The USDJPY correction on Friday inspired by somewhat stern language from Bank of Japan Governor Kuroda has mostly faded, as USDJPY bobs back above 143.00 overnight on US treasury yields challenging cycle highs. EURJPY pulled back close to the cycle high well above 144.00 overnight on hopes that the war in Ukraine is turning in the Ukrainians favour. New highs in USDJPY may bring more two-way volatility again if Japanese officialdom backs up its concern on the situation with market intervention (buying JPY). Crude oil (CLV2 & LCOX2) Crude oil starts the week in defensive mode with the focus staying with demand concerns amid continued lockdowns in China hurting demand from the world's top importer and a rapid succession of interest rates from major central banks negatively impacting the global economic outlook. Into the mix a US-backed plan to cap prices on Russian oil sales from December 5, a stranded Iran nuclear deal, strong demand for fuel products such as diesel at the expense of punitively high gas prices and a softer dollar. In addition, the collapse of Russian defenses in Ukraine and the response from Moscow will be watched closely. Monthly oil market reports from OPEC tomorrow and IEA on Wednesday should provide some further guidance on the supply/demand outlook. Brent’s current range: $92.75 and $87.25 US Treasuries (TLT, IEF) The 10-year US Treasury benchmark edged higher toward the local range high north of 3.3% overnight, with only the June peak at 3.50% remaining as the focus to the upside (this was the highest yield for the cycle since early 2011 and the run higher in yields in June coincided with the major low of the equity bear market this year. Tomorrow’s US August CPI number is the next key test for sentiment and yield direction, while the US Treasury will also auction both 3-year and 10-year treasury notes today and will auction 30-year t-bonds tomorrow. What is going on? France’s manufacturing production contracted in July According to the latest estimate released by the French Institute of National Statistics (INSEE), the manufacturing production decreased by a stunning 1.6 % month-over-month in July. It remains in expansion on a yearly basis (+0.2 %). Without much surprise, the drop is mostly explained by higher prices, especially higher energy prices. The INSEE does not forecast a recession in France this year. Nonetheless, growth is likely to decelerate very sharply in the coming quarters. The institute forecasts that growth will be around 0.2 % in Q3 and will be stagnant in Q4 2022. India’s rice export ban risk aggravating global food crisis After a ban on wheat exports earlier this year, India has now announced restrictions on rice exports, aggravating concerns of a global food crisis. Bloomberg reported India imposed a 20% duty on white and brown rice exports and banned shipments of broke rice. The new curbs apply to about 60% of India's rice exports and go into effect Friday. India’s rice output has been depressed due to the severe heatwaves, but also possibly to cap domestic price pressures. If these measures are duplicated by other key rice exporting countries like Thailand and Vietnam, there could potentially be a severe grain shortage globally, especially weighing on poor rice importing nations. We continue to see a threat of climate change to global agricultural output, which along with a prolonged energy crisis, suggested price pressure will stay in the medium-to-long term despite some cooling off from the recent highs. European carbon price drops as EU considers sale of permits from reserves The December ECX emissions contract (EMISSIONSDEC22) has fallen by around one-third since hitting a record high last month above €99 per tons. Given the current energy crisis, EU energy ministers are moving towards a deal to sell surplus permits from its Market Stability Reserve (MSR) in order to support a reduction in the cost of producing power and heating within the region. Power producers need to buy carbon permits to offset the polluting impact of using coal and gas over renewables. Occidental Petroleum shares rise on Berkshire accumulation In a filing on Friday, Berkshire Hathaway announced that it has lifted its stake to 26.8% in Occidental Petroleum. The move comes after the investment firm got regulatory approval for increasing the stake to over 50%. Berkshire’s move in Occidental Petroleum shares is seen as a move of confidence in the oil and gas industry as a much-needed industry for bridging the gap during the green transformation. Semiconductors are in focus as the US is expected to announce more curbs on exports The US Commerce Department is expected to publish new regulations curbing exports of semiconductors to China with companies such as KLA, Lam Research, and Applied Materials likely being impacted by the upcoming regulation. The move by the US further confirms the deglobalisation under the rule of self-reliance applied by increasingly more countries. China’s medium to long-term corporate loans picked up in growth  Over the past months, Chinese policymakers instructed policy banks and gave window guidance to commercial banks to extend credits to support infrastructure construction and key industries of the economy. Some results showed up in the August loan data which recorded a growth of 16% m/m annualized in the outstanding medium to long-term loans to the corporate sector. The amount of new medium to long-term loans to corporate was RMB 735bn in August versus RMB 346bn in July and RMB 522bn in August 2021. Loans to households remained sluggish. PBoC issues a list of 19 systemically important banks The People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a list of 19 systematically important banks.  These 19 banks will face between 0.25% and 1% higher minimum capital requirements and additional leverage requirements. They are also asked to prepare contingency plans for major risk events. These 19 banks are Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China, China Minsheng Bank, China Everbright Bank, Ping An Bank, Hua Xia Bank, Ningbo Bank, China Guangfa Bank, Jiangsu Bank, Bank of Shanghai, Bank of Beijing; China CITIC Bank, China Postal Savings Bank, Shanghai Pudong Development Bank, Bank of Communications, China Merchants Bank, and Industrial Bank. The CPC is set to amend the party constitution at its upcoming national congress The Political Bureau of CPC Central Committee said in a readout last Friday that the Communist Party of China (CPC) is set to “work out an amendment to the Party Constitution that facilitates the innovative development of Party theories and practices and meets the need of advancing the great new project of Party building in the new era” at the CCP’s national congress to convene starting on October 16.  It further elaborates that “the latest adaption of Marxism to China's context and new circumstances will be fully epitomized and so will the new ideas, new thinking and new strategies of governance developed by the CPC Central Committee since the Party's 19th National Congress in 2017. What are we watching next? The Bank of England (BoE) will need to go big on 22 September The meeting initially scheduled for this week is postponed following the Queen Elizabeth II. Last week, both the Bank of Canada and the European Central Bank hiked their benchmark interest rate by 75 basis points. All eyes are turning to the BoE now. Pressure is mounting for the BoE to go big this week – meaning a 75-basis points hike. In August, the central bank hiked rates by 50 basis points to 1.75 %. Despite prime minister Liz Truss’s new anti-inflation plan (which will likely lower the peak in inflation), we think the BoE will need to show its commitment to fight inflation. The Bank forecasts that UK CPI will increase to 13.3 % year-over-year in Q4 2022. But the peak in inflation is only expected in 2023. This means that the cost of living will continue increasing in the short term, anyhow. Fed speakers stay hawkish before the blackout period begins and ahead of US CPI release tomorrow Fed rate hike expectations have picked up strongly since Jackson Hole, and we have heard an extremely unanimous voice from the Fed speakers since then. Some of them have clearly made the case for a 75bps rate hike in September, with Bullard on Friday even saying that Tuesday’s CPI report is unlikely to alter the incoming 75bps rate hike in September. Governor Waller leaned hawkish as well, but did not specify the size for September’s decision, but a “significant” hike still points to that. Esther George stayed away from guiding for individual meetings but made the case for sustained rate hikes. Ethereum merge The second-largest cryptocurrency, Ethereum, is scheduled to undergo a major upgrade this week (estimated on Thursday) which, if successful, will fundamentally change the way the cryptocurrency is working. It will go from the computationally intensive proof-of-work consensus to the more energy-friendly proof-of-stake, as well as introducing a mechanism to limit the inflation in Ethereum. The crypto community is looking very much forward to this upgrade, although some are concerned about the security in the new framework. Earnings to watch Today’s key earnings release is Oracle which a better-than-expected earnings result on 13 June surprising the market on EPS by 12% as the legacy database and software maker is gaining momentum in its cloud offering. Analysts expect FY23 Q3 (ending 31 August) revenue growth to accelerate to 18% y/y, which includes its recent acquisition of Cerner in the health care sector, which is impressive for the previously low growth company despite some of the growth being driven by acquisitions. If the outlook remains strong a longer-term repricing of the company’s valuation could be in the making. Today: Oracle Tuesday: DiDi Global Wednesday: Inditex Thursday: Polestar Automotive, Adobe Economic calendar highlights for today (times GMT) 0730 – ECB's Guindos to speak 0800 – Switzerland Weekly SNB Sight Deposits 1200 – ECB’s Schnabel to speak 1530 – US 3-year Treasury auction 1700 – US 10-year Treasury auction 2100 – New Zealand Aug. REINZ House Sales 0030 – Australia Sep. Westpac Consumer Confidence 0130 – Australia Aug. NAB Business Conditions/Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean engraver Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-12-2022-12092022

World markets closed higher last week, indicating that sellers are inactive ahead of incoming US news and Fed meeting next week. The main reason was the ECB meeting, at which the key interest rate was raised by 0.75% to 1.25%. Another factor could be the statements of both Christine Lagarde and Jerome Powell, which once again hinted that central banks would act aggressively when raising rates. However, some believe that the Fed will not be able to withstand pressure, so they will take a pause in rate increases. They said the central bank will act only when consumer inflation in the US slows down. Forecasts already say CPI is likely to decline from 8.5% to 8.1% y/y, then from 0% to -0.1% m/m. If the data comes out lower than expected, the Fed will raise rates by only 0.25% in October. In this case, a slowdown in the sale of government bonds and a continuation of the weakening of dollar can be expected. Also, the rally in stocks that began last week may continue, which will spur the growth of risky assets, including euro. Forecasts for today: EUR/USD The pair is trading below 1.0110. Overcoming this mark may push the quote towards 1.0200. USD/JPY The pair is rising, thanks to positive market sentiment. This may lead to a further increasefrom 143.65 to 145.00.   Relevance up to 08:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321372

Technical analysis: USD/JPY has been trading upside this morning and I see potential for the continuation of the strong upside trend in the background. Trading recommendation: Due to the strong upside cycle in the background and potential pullback play, I see further upside continuation. Watch for the buying opportunities on the intraday dips with the upside objective at the price of 145 and 146.50. Key support is set at the price of 141.50     Relevance up to 10:00 2022-09-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292360

Former US Treasury Secretary Lawrence Summers said dollar has more room to grow given a number of fundamentals behind it. He expressed skepticism over the effectiveness of any intervention to turn the tide for yen. In a statement, Summers stressed that the US has a huge advantage in not being dependent on "outrageously expensive foreign energy." He noted that Washington has taken a stronger macroeconomic response to the pandemic, and that the Federal Reserve is now tightening monetary policy faster than its counterparts. So far, the Bloomberg Dollar Spot Index is up about 11% year-to-date, hitting a record high this week. Dollar reached its highest level against euro since 2002 on Tuesday - 0.9864, while it reached the highest level since 1998 against yen on Wednesday - 144.99. Yen has depreciated faster than euro, causing a more-than-19% fall against dollar this year. This prompted increased warnings from Japanese officials, with Bank of Japan Governor Haruhiko Kuroda meeting with Prime Minister Fumio Kishida to discuss latest concerns on Friday. Japanese officials are not ruling out options as market participants discuss the chances of intervention to buy yen and sell dollars. Japan hasn't done this since 1998, when it teamed up with the US - while Summers was deputy treasury secretary - to help stem the yen's fall. For its part, the US Treasury Department insisted on its unwillingness to support any potential intervention in the forex market to stop the depreciation of yen. Summers stressed that the more fundamental issue for yen is the interest rate adjustments in Japan, both short-term and long-term. The Bank of Japan maintained a negative short-term interest rate, as well as a 0.25% yield cap on 10-year bonds.  Go to dashboard       Relevance up to 14:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321348

Summary:  Today we discuss market risk sentiment brightening in Europe in the wake of Ukrainian momentum on the battlefield since late last week, with EURUSD breaking well above important local resistance. The JPY is nearly as weak as the US dollar as yields have poked higher again. We also discuss developments in crude oil, wheat and rice after an Indian export ban, stocks to watch this week, including Oracle on the earnings report today and key semiconductor stocks as the US is likely to widen its curb on exports to China. Today's pod features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source:https://www.home.saxo/content/articles/podcast/podcast-sep-12-2022-12092022

European stocks are off to a positive start on Monday, following a relatively muted day in Asia amid bank holiday closures in China, Hong Kong and South Korea. UK growth continues to struggle The UK economy grew slightly less than expected in July, with growth supported by consumer-facing services on the back of the Women’s EUROs and the Commonwealth Games. With the additional bank holiday this month, the economy could be facing a small technical recession, albeit one that won’t be nearly as bad as was expected prior to the cap on energy bills. There’s a lot more data to come this week which should show consumer spending slipping as inflation remains above 10% and the labour market still strong. Yen slips once more The Japanese yen is slipping again at the start of the week despite continuous warnings from officials about the movements in the currency. While they continue to stress the urgency with which they view the unjustified moves, they’ve so far shown themselves to be all talk and no action so the warnings are increasingly falling on deaf ears. US inflation data eyed on Tuesday There’ll be a heavy focus on the US this week as traders await CPI data on Tuesday. The release comes following another flurry of hawkish Fed speak. It seems policymakers were keen to reinforce their hawkish position ahead of the blackout period – which we’re now in – potentially with an eye on that data point. They’ll have no opportunity to react to the release ahead of the meeting and there was perhaps a feeling that a softer reading could see market expectations slip which they clearly want to avoid. It will be interesting to see how traders now respond as we’ve seen how keen they are to hop aboard the “dovish pivot” train before. Bitcoin enjoying a strong rebound The recovery in bitcoin since the end of last week has been very strong, with the rally topping 4% again today. Whether it’s the expectation of a dovish shift, a weaker dollar or just an improvement in broader risk appetite, something is giving cryptos a big boost and that’s helped bitcoin hit its highest level since it went into freefall on 19 August. Things may be looking up in the short term, although once more, that may well depend on the inflation data. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Risk rebound continues - MarketPulseMarketPulse

By now, the second day of the yen's consolidation in the closing area on September 9th is expiring. The price is probably preparing to overcome the resistance at 144.25 in order to reach the high target at 147.05. During this consolidation, the Marlin Oscillator left the overbought zone and may continue to grow. To deepen the correction, the price needs to overcome the support at 141.10 - then the 139.20 target will be available. But even in this case, the decline will be considered as corrective. Overcoming 139.20, and with it the MACD line, will send the price into a medium-term downward movement. On a four-hour scale, the price is consolidating under the MACD line, at the Fibonacci level of 238.2%. If the price rises above this line (142.97), the price will once again attack the target level of 144.25, located between the reaction levels of 261.8-271.0%.   Relevance up to 04:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321485

USDJPY consolidates gains The Japanese yen bounced after the government hinted at intervention to support its currency. The dollar gained momentum after it cleared the previous top at 139.30. However, it soon came under pressure at the psychological level of 145.00 and may take a breather. After the RSI soared into overbought territory, a drop below 143.00 led to a round of profit-taking with 141.50 as an intermediate support. Further down, 139.10 is a major level from a bullish breakout and sits on the 20-day moving average, making it an area of interest. EURGBP attempts to break out The euro strengthens as the ECB would reportedly accelerate its rate hikes to bring down inflation. The pair is at a crossroads under June’s high at 0.8720. A combination of profit-taking and fresh selling could weigh on the price action after a fall below 0.8660. The area between 0.8620 and 0.8570 next to the 20-day moving average is a major level to test the bulls’ resolve. A series of higher lows indicates a build-up in buying pressure and a breakout could let off steam and trigger a full-fledged rally towards 0.8900. US 30 grinds towards key resistance The Dow Jones 30 rallies ahead of a new set of US inflation data. The current recovery has gained traction once above 32000, sending the index towards the key supply zone around 33300 at the origin of a sharp sell-off back in late August. Strong selling pressure could be expected from trend followers as the market mood remains fragile. The RSI’s repeated overbought condition may limit the upside range in the resistance area. 32150 is the closest support and a bullish breakout would lift offers to the previous peak at 34300.

Technical analysis: USD/JPY has been trading sideways today at the price of 142.40 but I see potential for further upside continuatin of the trend. Trading recommendation: USD/JPY Is still in the strong upside cycle and it is true momentum leader. I still see potential for bigger upside continuation towards upper references. Watch for the buying opportunities on the intraday dips with the upside objectives at 145.00 and 147.00. Stochatic oscillator is showing fresh upside cross from the oversold zone, which can be good sign for the further upside continuation. Key support is set at the price of 141.50     Relevance up to 09:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292508

The Japanese yen has been trying to strengthen against the greenback for the second day in a row, but the latter is holding firm. Whose one will take in the end? According to experts, the JPY will win the current battle, but the USD will win the war. Yen getting ready for a jump Yesterday, the US dollar continued its corrective pullback from the 20-year high reached last week. This served as a strong headwind for the USD/JPY pair. At the beginning of Monday, the asset showed a steady growth, but could not stay above the level of 143 and ended the day lower. Pressure on the greenback came from expectations of the release of statistics on inflation in the US last month. The report will be published today. Economists predict another weakening of inflationary pressure in annual terms. According to them, the consumer price index will drop to 8.1% in August, after falling to 8.5% in July. Traders fear that a sustained weakening of inflation will change the Federal Reserve's rhetoric on interest rates. Recall that the US central bank is preparing to announce a rate hike at its September meeting, which will be held on September 20-21. Markets are currently evaluating an 85% likelihood of a 75 bps increase. However, a strong fall in inflation could significantly dampen hawkish expectations. Against this background, the dollar is in danger of plunging, especially when paired with the yen. Now the USD/JPY bears are just waiting for the moment when there is even the slightest hint of a slowdown in the growth of the gap in US and Japanese interest rates. Nevertheless, analysts warn that the rise in the yen will be short-lived. After the release of statistics on inflation in the US, the yen can only get a short-term growth momentum. In the future, the JPY will continue to fall against the US dollar. And there are two good reasons for this. Reason #1: One-sided intervention will not work After the yen plunged sharply against the dollar last week and nearly touched a critical 145, the Japanese government sharply tightened its intervention warning. Several high-ranking officials immediately stated emphatically that the action plan to support the yen is already on the table. Market confidence that the Japanese authorities may soon move from words to deeds, has grown after Friday's meeting between Bank of Japan Governor Haruhiko Kuroda and Prime Minister Fumio Kishida. Both expressed great concern about the rapid fall of the national currency. Officials' comments helped the yen to stabilize slightly, but it is still well above the levels at which Japan has previously interfered in the market. Analysts believe that now the red line for the Japanese authorities is the level of 145. As soon as the yen tests this mark, the intervention will not be long in coming. Some experts have no doubt that Japan will take this step, since the country now has much larger foreign exchange reserves than in 1998, when it last intervened to support its currency. At the end of August, Japan's foreign exchange reserves amounted to $1.17 trillion. In the spring of 1998, Japanese authorities spent about $21 billion propping up the yen on their own, equivalent to about 10% of the country's foreign exchange reserves at the time. However, there is also an opposite opinion. Thus, Bloomberg analysts believe that the Japanese government will not risk launching a unilateral intervention, given its previous bad experience. In 1998, only US support was able to turn the tide of the currency attack on the yen. Moreover, the actual participation of America was not even required. The Japanese currency began to rise on the news that the then US Treasury Secretary Robert Rubin was going to meet with Japanese Treasury Secretary Kiichi Miyazawa. As for today, America's help looks unlikely. Last week, the US Treasury confirmed its unwillingness to support any potential intervention in the foreign exchange markets. This position is not favorable for the yen. Reason #2: The Bank of Japan will continue to be dovish It is possible to argue about whether or not the Japanese government will decide on foreign exchange intervention for a long time. The only thing that most experts now agree on is its ineffectiveness at this stage, when the divergence in the monetary policy of the Fed and the BOJ continues to grow. According to the chief economist at S&P Global Market Intelligence Harumi Taguchi, the key reason for the yen's weakness is the continued increase in rates in America, while the BOJ keeps the indicator at an extremely low level. "If the position of the Japanese central bank on interest rates does not change, I see absolutely no point in intervention, even if it is supported by the United States," the analyst said. Of course, Kuroda cannot but be concerned about the yen's current position. Recently, he often talks about the need to take measures to support the currency, but every time he makes an amendment: the central bank does not intend to change its dovish guidelines. The market is also well aware that the BOJ now has no reason to cancel monetary stimulus and raise interest rates. The country's economy has not yet recovered from the COVID-19 pandemic, and inflation is not as high and sustainable as in other countries. That is why many experts are inclined to believe that at its next meeting, which will be held on the same dates as the Fed meeting, the Bank of Japan will once again confirm its commitment to ultra-soft monetary policy. Based on this, we can safely say that the downward trend in the yen will continue.   Relevance up to 10:00 2022-09-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321548

Technical analysis: USD/JPY has been trading uspide as I expected. The price reached first objective at the price of 144.95 but I see potential for further upside movement towards next reference points. Trading recommendation: USD/JPY is trading downside this morning but I see potential for the upside continuation later during the day. Watch for the buying opportunities on the dips with the upside objective at the price of 146.90. MACD oscillator is showing upside reading, which is good sign that upside momentum is strong. Key support is set at the price of 141.55   Relevance up to 08:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292697

USD/JPY flirts with daily low, around 143.00 mark amid chances of BoJ intervention   USD/JPY meets with a fresh supply and retreats sharply from the 145.00 neighbourhood. Jawboning by Japanese authorities points to an imminent intervention and boosts the JPY. The emergence of some selling around the USD also contributes to the intraday downfall. The USD/JPY pair faces rejection near the 145.00 psychological mark and retreats from the vicinity of a 24-year high retested earlier this Wednesday. The downward trajectory extends through the first half of the European session, though the pair manages to rebound a few pips from the daily low and is currently placed just above the 143.00 mark. A combination of factors fails to assist the USD/JPY pair to capitalize on the previous day's post-US CPI strong rally of over 300 pips. The Japanese yen strengthens across the board amid jawboning by Japanese officials and chances that the Bank of Japan (BoJ) may step in to arrest a freefall in the domestic currency. This, along with the emergence of some US dollar selling, exerts downward pressure on the major. That said, a recovery in the global risk sentiment - as depicted by a generally positive tone around the equity markets - could cap gains for the safe-haven JPY. Apart from this, a big divergence in the monetary policy stance adopted by the Japanese central bank and the Federal Reserve supports prospects for the emergence of some dip-buying around the USD/JPY pair. The BoJ remains committed to continuing with its monetary easing. In contrast, the US central bank is expected to keep raising interest rates at a faster pace to tame inflation. The bets were reaffirmed by the stronger US CPI report on Tuesday. The markets quickly started pricing in the possibility of a full 1% rate hike at the next FOMC meeting on September 20-21. This is evident from a fresh leg up in the US Treasury bond yields, which favours the USD bulls and should lend support to the USD/JPY pair. Nevertheless, the fundamental backdrop remains tilted firmly in favour of bullish traders. Hence, any subsequent decline could still be seen as a buying opportunity and remain limited. Market participants now look forward to the US Producer Price Index (PPI), due for release later during the early North American session. Apart from this, the US bond yields and the broader risk sentiment should provide some impetus to the USD/JPY pair.

EUR/JPY Price Analysis: Further downside not ruled out   EUR/JPY adds to Tuesday’s pullback below the 143.00 yardstick. The 138.80 region should offer decent support near term. EUR/JPY extends the corrective downside for the second session in a row and breaches the 143.00 mark on Wednesday. The ongoing knee-jerk is not surprising considering the bearish divergence in the daily RSI. That said, the continuation of the decline could extend to the 138.80 zone, where the 55- and 100-day SMAs coincide. In the meantime, while above the 200-day SMA at 135.08, the prospects for the pair should remain constructive. EUR/JPY daily chart

Yesterday's presentation of inflation data in the United States shook financial markets. Investors, looking by the reaction in many markets, seemed to expect inflation to fall faster than the estimation presented. The markets were shaken. US inflation - a powerful blow to financial markets The August consumer price index report showed that inflation rose 0.1 percent on a monthly basis, despite forecasts for a 0.1 percent decline, while the annual rate of consumer inflation fell less than expected in August to 8.3 percent (consensus 8.1 percent). The higher-than-expected U.S. inflation reading and slower pace of decline may have given rise to speculation that the Fed may deliver a larger interest rate hike than 75 bps. The game may now be on for a 100 bp hike next week. Read next: Great Britain’s CPI Lower Than The Expected, Eyes On US PPI| FXMAG.COM At the end of Tuesday's session, the Dow Jones index was down 3.94 percent, the S&P 500 down 4.32 percent, and the Nasdaq Composite down 5.16 percent. All three major indexes broke a four-day streak of gains and posted their biggest one-day decline in more than two years. All sectors in the S&P index ended the session in negative territory, with communications services, technology and consumer products falling more than 5 percent.  Bitcoin had already fallen at one point, in a move initiated after the US data, to levels below $20000. This could mean a drop of more than 10 percent. The EUR/USD pair price, in turn, retreated below parity, recording a cumulative drop of more than 2 percent after the data. Such large changes in many markets could be fears of faster and larger interest rate hikes in the US. Source: Conotoxia MT5, US100 m30 How is the Fed's action priced in? According to the interest rate market, the chances of a 100bp hike on September 21 have risen to 34 percent. Previously, the market had not considered such a large US interest rate hike at all, and was considering a rate hike between 50 and 75 bp. The current pricing could lead to an increase in the range for the federal funds rate to between 3.25 and 3.5 percent, which in turn could mean that the market is pricing the end of the hike cycle no longer in the 3.9 percent region, but in the 4.2 percent region, which could also contribute to the strengthening of the USD. In the bond market, on the other hand, the yield on 2-year U.S. Treasury securities rose to its highest level since 2007, exceeding 3.7 percent. In the past, the level of 2-year bonds may have coincided with the target level of the federal funds rate for the hike cycle. Source: Conotoxia MT5, USDIndex D1 Yen struggles against dollar strength It seems that this morning only the Japanese yen is trying to fight the strength of the USD. This  might have to do with further news of possible intervention. Japan's Finance Minister Shunichi Suzuki said on Wednesday that currency intervention is among the options to combat the decline of the country's currency, the BBN news service reported.  "We are talking about taking all available options, so it is right to think that way," he said. - Suzuki told reporters after being asked if currency intervention in the form of yen buying was on the table. "Recent moves have been quick and one-sided, and we are very concerned. If such moves continue, we must respond, and we are not ruling out any options." - He added. A break of the 145 level by USD/JPY would   lead to intervention by Japanese authorities, David Forrester, senior FX strategist at Credit Agricole CIB, told Bloomberg. The problem facing the Ministry of Finance in the event of any FX intervention is that the upward movement of USD/JPY reflects the divergence between the Fed and BOJ, so the impact of any intervention would only be temporary, the Credit Agricole representative added. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

The USD/JPY pair is consolidating in a wide range below the price channel resistance line, below 145.00. If the price still has enough strength to overcome the price channel line of the higher (monthly) timeframe, then the pair will become enthusiastic for growth, and here the 147.05 target is the next embedded line of the global price channel. But the market has no prerequisites for such enthusiasm. The price has already formed a weak divergence with the Marlin Oscillator, and if this is not a trend reversal, then it is a prerequisite for a deeper correction. Its first target at 141.14 is the underlying line of the price channel. Breaking the support opens the second target at 139.20, near which is the MACD indicator line. The price settled below the MACD line on the four-hour scale, the Marlin Oscillator is in the negative area, the scenario for the currency pair's decline has an advantage. First target at 141.14.       Relevance up to 04:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321748

At the close in the New York Stock Exchange, the Dow Jones rose 0.10%, the S&P 500 rose 0.34%, and the NASDAQ Composite rose 0.74%. Chevron Corp was the top gainer among the components of the Dow Jones index today, up 3.86 points or 2.42% to close at 163.27. Quotes Johnson & Johnson rose by 3.33 points (2.06%), ending trading at 164.66. Merck & Company Inc rose 1.36 points or 1.59% to close at 86.95. The losers were shares of Honeywell International Inc, which lost 5.01 points or 2.71% to end the session at 179.97. 3M Company was up 2.44% or 2.94 points to close at 117.53, while Dow Inc was down 1.67% or 0.80 points to close at 47.07. . Leading gainers among the S&P 500 components in today's trading were Coterra Energy Inc, which rose 7.22% to hit 32.23, APA Corporation, which gained 6.72% to close at 41.74, and shares of Moderna Inc, which rose 6.17% to end the session at 139.40. The biggest losers were Nucor Corp, which shed 11.31% to close at 120.71. Shares of Centene Corp lost 6.79% to end the session at 83.92. Quotes of DISH Network Corporation decreased in price by 6.27% to 17.18. Leading gainers among the components of the NASDAQ Composite in today's trading were Avenue Therapeutics Inc, which rose 53.87% to hit 0.36, Aileron Therapeutics Inc, which gained 38.49% to close at 0.27, and also shares of Dawson Geophysical Company, which rose 41.44% to close the session at 1.57. The biggest losers were Neurobo Pharmaceuticals Inc, which shed 43.61% to close at 16.86. Shares of Vintage Wine Estates Inc shed 40.33% to end the session at 3.30. Quotes of Aditx Therapeutics Inc decreased in price by 38.22% to 11.43. On the New York Stock Exchange, the number of securities that rose in price (1,578) exceeded the number of those that closed in the red (1,506), while quotes of 124 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,956 stocks fell, 1,770 rose, and 254 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.07% to 26.16. Gold futures for December delivery lost 0.63%, or 10.90, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 1.68%, or 1.47, to $88.78 a barrel. Brent oil futures for November delivery rose 1.23%, or 1.15, to $94.32 a barrel. Meanwhile, in the forex market, the EUR/USD pair was unchanged 0.08% to 1.00, while USD/JPY fell 0.97% to hit 143.15. Futures on the USD index fell 0.15% to 109.36.   Relevance up to 05:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292844

US equities eked out small gains yesterday as dip buyers timidly came in, but risks remain tilted to the downside with the disappointing inflation figures, and the risk of the largest rail strike in the US since 1992. Crude Oil Prices Released yesterday, the US producer price data didn’t enchant investors. The headline figure fell for the second consecutive month but the core PPI strengthened, hinting that most of the easing in producer inflation was due to cheaper energy prices – which however remain very volatile, and which, more importantly carries a decent upside risk. The barrel of American crude flirted with the $90 mark yesterday, without however being able to clear resistance at this level. Energy companies gained despite news that Europeans are looking to raise $140 billion euros from energy companies to help households and businesses survive through winter. The situation on the stock market The S&P500 recover a part of losses yesterday, as Nasdaq gained 0.84%. But the risks remain clearly tilted to the downside. The US dollar remains relatively strong near the 20-year highs, the EURUSD consolidates below parity as gold slipped back below $1700 per ounce. The USDJPY retreated on expectation that the Bank of Japan (BoJ) could intervene to stop the yen’s depreciation. Ethereum trades around $1600 as Merger Upgrade is now imminent! Watch the full episode to find out more! 0:00 Intro0:24 Dip buyers return to a risky market2:31 US crude flirts with $90pb3:41 US rail strike risk weighs on sentiment4:55 Energy stocks rally despite EU measures to cope with crisis7:07 Gold under pressure7:50 BoJ could intervene to strengthen the yen8:52 Ethereum Merges today! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #PPI #inflation #rail #strike #USD #EUR #JPY #BoJ #rate #check #Gold #XAU #crude #oil #BP #XOM #Chevron #Coterra #windfall #taxes #energy #crisis #Bitcoin #Ethereum #Merge #update #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH

The discrepancy between monetary policy against the Bank of Japan and the rest of the G10 central banks is taking its toll on the yen. Thus, the JPY will remain weak until the BoJ shifts gears, economists at Nordea report. Loose monetary policy is the problem for JPY “FX intervention will not be looked upon as welcomed by the remaining G7 countries if Japan unilaterally decides to intervene, and we believe that the bar for actual intervention is quite high and that the JPY would need to come above 148 against the USD before a real intervention is in the cards.” “What will stop the yen-weakening is a shift in monetary policy from the Bank of Japan. Such a shift could easily come when the current BoJ Governor Kuroda retires in April 2023. We thus expect the JPY, which is the worst G10 performer against the USD this year, to recover most of its losses next year.”

The yen has plunged 25% since March against the US dollar. Therefore, talks of Bank of Japan (BoJ) intervention have increased. Nonetheless, economists at Société Générale believe that currency intervention will not deter the USD/JPY pair upmove. Two conditions necessary for a sustainable reversal in the JPY “We see two conditions necessary for a sustainable reversal in the JPY: 1/ the BoJ abandons curve control (10y JGB cap 0.25%); 2/ a recession unfolds in the US and causes Treasury yields to crumble.” “Unilateral intervention could keep USD/JPY from scaling new highs but won’t be enough to reverse the downtrend.”

The US currency was swirled by a whirlwind of continuous movement, not giving it a break for almost a minute. The dollar has to be constantly in good shape to act ahead of the euro and other currencies. Against this background, experts fear the depletion of "dollar forces" and the subsidence of the USD in the long term. According to market players and analysts, the rally that led the greenback to the peak of the price since 1985 will continue. However, this causes great inconvenience to other currencies, up to their collapse. As a result, the means of payment of other countries are plunging against the USD or require a rapid increase in rates in order not to be at the bottom. The dollar's strong growth against a basket of currencies (by 15% in 2022) dealt a crushing blow to financial markets. The main victims were the euro and the yen, which collapsed to lows over the past 20 years. The pound had the hardest time, which fell to its lowest in 40 years. The catalyst for the widespread collapse of the market was the "hot" data on inflation in the United States. According to a report published on Wednesday, September 14, US inflation increased markedly in August, and decreased less year-on-year than the market expected. In the last month of summer, the consumer price index (CPI) increased by 0.1%. At the same time, experts expected the indicator to fall by 0.1% amid a steady decline in gasoline prices. However, this factor did not work due to a sharp increase in consumer spending in the United States. According to current data, the basic consumer price index in the country increased by 0.6%, which is twice as much as expected. At the same time, the annual core inflation rate soared from July's 5.9% to 6.3%. According to analysts, this is the highest value recorded after a 40-year high reached in March. In the current situation, gasoline prices in the United States fell by 10.6% on a monthly basis, but were partially neutralized by rising prices for LNG and electricity. However, in the future, the effect of cheaper energy came to naught due to the rapid growth of housing and medical care prices (they increased by 0.7% and 0.8%, respectively). Against this background, analysts' forecasts for a further rise in the interest rate by the Federal Reserve by 1 percentage point (pp) have intensified. Many experts began to lay such an increase at the Fed's next meeting, which is scheduled for September 20-21. Some of them expect an increase in a smaller volume (only by 0.75 percentage points). According to analysts, the current situation provides significant support to the dollar and at the same time is a challenge to global central banks. Many world central banks were faced with a choice: to observe the weakening of national currencies or slow down this process by selling USD and raising their rates. The current macro data from the United States turned out to be negative for the markets, experts summarize. At the same time, the Fed management recognizes that inflationary pressure in the country remains high and hinders economic growth. However, the central bank turned out to be a hostage to the situation, since in order for inflation to return to the 2% target, it is necessary to continue raising rates, and this should be done in an accelerated mode. Against this background, the US currency has steadily risen in price against the European one. The EUR/USD pair was trading at 0.9965 on Thursday morning, September 15. Since August inflation in the United States turned out to be higher than forecasts, market participants expect the Fed to raise the rate further (by 75 bps) at the upcoming meeting. Many experts are sure that now there are almost no factors that can prevent the dollar's growth. According to Rabobank's currency strategists, while US rates are rising, the greenback will strengthen. Analysts believe that this strengthening will continue until the end of 2022 and the beginning of 2023. The "tailwind" for the USD is the reliability and relative stability of the American economy. However, the prolonged strengthening of the greenback creates problems for US trading partners, as the growth in the value of imports denominated in dollars increases. This hinders the curbing of rampant inflation in a number of countries, experts emphasize. Asian countries, especially commodity importers, suffer the most in this situation. Against this background, the Japanese yen turned out to be the biggest outsider, which rapidly and sharply plunged. According to experts, the dollar rally will end sooner or later, but the timing of its completion is difficult to predict. According to economists, in the long term, a rate hike in the United States, which should slow down the economy, will play against the greenback. However, the Fed will have to take measures to slow down the national economy in order to reduce the current level of inflation. The result is a vicious circle, from which it is difficult for the dollar to get out. Currently, many market players are betting on USD growth, but analysts urge caution in this matter. In the short term, such tactics provide significant support to the greenback. At the moment, the market is in the process of reassessing expectations about the future course of the Fed's monetary strategy, especially regarding rates. Current economic reports from the United States increase the likelihood of a third consecutive Fed rate hike by 75 bps at the next meeting scheduled for September 20-21. Against this background, the markets allow an increase in the key rate by 100 bps at once, experts summarize.   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321776

After yesterday's pullback, the USD/JPY pair almost froze in flat, waiting for the next triggers. Today's macro data from the US should be the decisive factors that will set the route for the asset. In the middle of the week, the dollar-yen pair could not stay near the level of 145, where it ended up on Tuesday thanks to unexpected statistics on US inflation. Recall that in August, the consumer price index in the United States fell to 8.3% from the previous value of 8.5%, but exceeded market expectations. Economists had forecast annual inflation at 8.1%. The fact that inflationary pressures eased less than expected further strengthened traders' confidence in the Federal Reserve's determination regarding interest rates. Now the markets estimate a 63% probability of a September increase in the indicator by 75 bps. Expectations of a maximum rate hike – by 100 bps - also increased significantly. These hawkish scenarios gave a strong boost to the dollar, which has already risen by more than 20% against the yen since the beginning of the year due to discrepancies in the monetary policy of the Fed and the Bank of Japan. The USD/JPY pair again came close to the key mark of 145 on Tuesday, which, apparently, is a red line for the Japanese government. In order to prevent the yen from collapsing below this level, the Japanese authorities again intensified verbal intervention on Wednesday. However, verbal warnings no longer scare the market as much as they used to. Yesterday, the yen was able to recover only due to the fact that Japanese officials finally stirred. The exchange rate check initiated by the BOJ was the first harbinger of a possible actual intervention. Against this background, the dollar retreated, but, it seems, not for long. This morning, the greenback is trying to grow within a narrow price range. In Asian trading, a small support for the USD/JPY pair was provided by the comment of the representative of the ruling Liberal Democratic Party of Japan, Satsuki Katayama. The official said that the Japanese government will not be able to contain the further depreciation of the yen on its own, since the country does not have effective means to combat the rapid depreciation of the exchange rate. Also a positive factor for the asset was the report published on Thursday by the Ministry of Finance of Japan. According to the data, in August the country faced the largest trade deficit in the entire history of observations. Last month, the indicator increased from 1.43 trillion yen to 2.82 trillion yen. The gap turned out to be much larger than economists had predicted (2.4 trillion yen). The record growth of the trade deficit is caused by a sharp jump in imports of goods and services. In August, due to high energy prices and the fall of the yen, the indicator rose to 49.9% against the previous value of 47.2%. The trade deficit has been observed in Japan for 13 months. This is the longest period in the last seven years. The negative trade balance undermines the recovery of the country's economy. This is another argument in favor of the fact that the BOJ will not decide to change its monetary policy in the near future. Most analysts believe that the monetary divergence between Japan and the United States will continue to grow, as a result of which the pressure on the yen will remain. Experts expect increased volatility of the USD/JPY pair ahead of the meetings of the Fed and the BOJ, which will be held next week. As for the current dynamics of the asset, today the dollar can again demonstrate growth against the yen, if, of course, it receives support from macroeconomic statistics. A large portion of data is coming out on Thursday, but traders will be focused on retail sales for August. Economists predict that retail sales increased by 0.2% last month, after the indicator remained unchanged in July. The technical picture also shows the growth of the USD/JPY pair. Bulls are now getting hopeful for a firmer RSI and bullish MACD signals.   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321784

Japan’s ruling Liberal Democratic Party's (LDP) policy chief Koichi Hagiuda called for an additional stimulus package worth over JPY 30 trillion ($208.97 billion) to tackle the inflation and weak yen problem, Sankei newspaper reported. Key quotes "The supplementary budget of last year exceeded 30 trillion yen in size." "Considering the price rises, global economic slowdown and weak yen and so on since then, more fine-tuned measures than last year are necessary." Market reaction USD/JPY is falling back towards 143.00 on these headlines, trading at 143.29, still up 0.12% on the day. The pair hit a session high of 143.80 earlier this morning. USD/JPY pares intraday gains, retreats below mid-143.00s ahead of US macro data  

Strong data from the US pushed markets up ahead of next week's meeting of the Federal Reserve. Reportedly, consumer inflation rose in August, while manufacturing inflation fell by 0.1% m/m and 8.7% y/y. The positive reaction of investors obviously indicated the growing hopes of a slowdown in inflationary pressures, which led to the rise of US stocks and slight correction of Treasury yields and dollar. Now, a lot depends on the Fed's decision on raising rates, more precisely on the level at which it will increase. The central bank will base its decisions on the level of inflation. So far, stocks are trading in both directions, with Asian ones having multidirectional dynamics before the start of the European trading session. Meanwhile, local investors won back yesterday's losses in European and US stocks. Dollar is also moving in different directions after Treasury yields rose by 0.46% to 3.428%. While it is not necessary to say that trading in Europe will definitely start in a positive way, a rebound may be seen in markets if positive sentiment continues. This may happen if data on retail sales and jobless claims in the US do not turn out to be disappointing. Forecasts for today: USD/JPY The pair is trading below 0.6725. If negative trends continue, the quote may continue to decline towards 0.6685. XAU/USD Spot gold fell below 1692.50 due to the uncertainty over the results of next week's Fed meeting. Quotes may continue to drop to 1680.50.       Relevance up to 06:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321760

Summary:  The US dollar remains firm after the shocking CPI data from Tuesday and with US Retail Sales for August today the latest data point ahead of the FOMC meeting next Wednesday, where a sizable minority are looking for 100 basis points from the Fed, while US long yields have run out of range to the upside. The Chinese yuan is trading weakly after China passed on easing rates any further overnight and despite the country moving to ease rules on property investment, with USDCNH hitting 7.00 today. FX Trading focus: USDCNH breaks above 7.00. USD eyes retail sales, new peak in long yields. The reaction in US yields and the US dollar after the far stronger than expected US August core CPI data from Tuesday is holding up well, with US yields all along the curve perched at or near the highs for the cycle and the 10-year US Treasury benchmark yield running out of range into the key high from June at 3.50%. The US Retail Sales report for August out shortly after this article is published is likely to drive the next step for US yields and the US dollar, which will likely move in the same direction. Somewhere out over the horizon, however, I wonder how the US dollar trades in the event a recession is afoot and investors are still marking down equities, not on a the challenge to multiples from higher yields, but on a profits recession. The past “norm” is for equities to only bottom out during the phase in which the Fed is rapidly easing to get ahead of a cratering economy. For now, the bout of risk off has seen NZD and NOK as the interesting pair of weakest currencies, with AUD and CAD not far behind and sterling struggling a bit more today, even as the market edges up the pricing of the Bank of England next week closer to 75 basis points (still only slightly more than 50/50 odds according to futures prices). Sterling almost can’t hope to perform well if risk sentiment But perhaps most importantly, the USD sell-off picked up its pace a bit today on USDCNH breaking above 7.00 for the first time since the summer of 2020 and despite constant PBOC pushbacks via setting the daily fixing stronger for the last three weeks and more on a daily basis. Overnight, China kept its rate unchanged as well, though there were a couple of bright spots in thew news from China overnight, as local authorities have listened to Xi Jinping’s calls for easing up on property investment with a raft of measures. As well, the Chengdu Covid lockdowns are easing. Still, any significant extension above 7.00 in USDCNH will have markets on edge, particularly if the 7.187 all time highs come into view. The USD strength and yield remaining pinned higher have emboldened prevented a further slide in USDJPY after USDJPY traded south of 143.00 overnight. We all know that the BoJ/MoF will more than likely step in if USDJPY trades north of 145.00 again, but note the more profound correction in crosses like AUDJPY, possibly a better place to speculate for a JPY resurgence if risk sentiment remains downbeat. That pair has rejected the recent extension above 97.00, though it probably needs to cut down through 95.00 together with tamer long global yields to suggest something bigger is afoot. Chart: AUDUSDThe Aussie caught a broad, if brief, bid overnight on a strong August jobs report, but wilted again in today’s trade as risk sentiment deflated once again and as the move lower in the CNH versus the US dollar picked up a bit of extra steam and crossed the psychologically important 7.00 level. Watching the lows for the cycle here below 0.6700 for a possible extension to at least 0.6500 on a break lower and a retest of the cycle lows from June. Table: FX Board of G10 and CNH trend evolution and strength.Interesting to note the CHF topping the leaderboard as EURCHF tries at the cycle lows today and Europe can’t get on the same page on its attempts to cap energy prices (drives risk of higher CPI outcomes and more CHF strength to offset). Elsewhere, the NZD is the weakest of the lot, while Japanese officialdom has impressed with its latest verbal intervention, as can be seen in the tremendous momentum shift over the last week in the broader JPY picture. Table: FX Board Trend Scoreboard for individual pairs.AUDNZD remains in a positive trend, but it’s at a multi-year range top as we watch whether a proper trend develops. Elsewhere, NZDUSD is grinding down into the psychologically challenging sub-0.6000 levels, while USDCAD is banging on the cycle resistance at 1.3200 and USDNOK is poking at local highs and only a bit more than a percent from its highest close since the pandemic panic of early 2020 around 10.25. Wondering if today will prove a pivot day for EURGBP that confirmed the up-trend. Upcoming Economic Calendar Highlights 1230 – US Weekly Initial Jobless Claims 1230 – US Sep. Empire Manufacturing 1230 – US Aug. Retail Sales Source: https://www.home.saxo/content/articles/forex/fx-update-usdcnh-breaks-above-700-usd-eyes-retail-sales-15092022

The yen has been, of course, on a wild ride lately. But there were some surprise moves yesterday which need some explaining, since they could shed some light on whether or not the USDJPY has hit a ceiling. There are some important implications for the future of the yen, and something traders need to be very careful about (hint: make sure stops are in place). The lead-up The yen has been weakening generally because the BOJ isn't raising rates while other central banks are. The BOJ isn't likely to raise rates in the foreseeable future, which makes the currency ripe for carry trading. On Tuesday, the USDJPY spiked higher after US CPI figures came out, because of speculation of an even stronger move by the Fed at the upcoming meeting. After the data, through the rest of the session, the pair drifted higher until it hit the 144.90 level, and then pulled back. That's when currency watchers noted that the BOJ had conducted a "rate check", and further announced a "doorstop" statement later in the day. The pair then pulled back rather dramatically, dropping over 180 pips in the course of a few hours. What is a "rate check"? The important thing isn't the check itself, but that it's something the BOJ does before it intervenes in the currency. Basically, the BOJ calls around to different banks asking what the exchange rate is. Presumably this is in preparation to take action, or to warn Japanese banks that action is likely. Read next: Australian Dollar (AUD): Reserve Bank Of Australia May Choose Less Aggresive Varaint As Unemployment Increased A Bit| FXMAG.COM That's why there was a reaction, but not a major move in the currency just yet. That it happened just as the pair was about to hit the 145.00 somewhat implies that's the level Japanese authorities will hold the line. That doesn't mean the market won't go above it marginally, or for brief periods. In fact, it would be expected that the market would "test" Japanese authorities to see if they actually will go through with intervention. What does intervention mean? It's been a couple of decades since the last time the currency pair moved up to similar levels, prompting a response from authorities. In that case, the pair got up to 147.00 and there was joint action from the US and Japan. The BOJ does conduct the operation, but it's at the direction of the Ministry of Finance, who "pay" for the move. Basically, the BOJ will buy yen on the market in a very large volume, enough to push the exchange rate down by several thousand pips all at once. The move is not pre-announced, and can happen more than once. The idea is precisely to keep the market from trying to push the pair up by "burning" out many of the long positions, and threatening to repeat at any moment. Read next: GDP Growth In New Zealand. Australia Unemployment Rate And Waiting For Initial Jobless Claims Report| FXMAG.COM That's why if you are trading with yen pairs over the next several weeks, as the USDJPY remains close to the 145.00, it's a very good idea to make sure your stops are in place and your portfolio is ready for a sudden, large move in the currency. But, remember, if the market behaves as the BOJ and MOF expect, then it's also quite possible that no intervention happens.

After some mid-week volatility, USD/JPY has settled down. In the European session, the yen is trading quietly at 143.59. Markets eye BoJ meeting For anyone following the Japanese yen, next week promises to be interesting, at the very least. The Federal Reserve will hold its policy meeting on September 21st, with the Bank of Japan officials meeting the next day. The Japanese yen continues to lose ground against the dollar, and fell to 144.99 earlier this month, a new 24-year low. Japanese officials have responded with well-worn rhetoric about how Tokyo is concerned about the yen’s depreciation and warning that all options are on the table. We’ve heard this all before, but is this time different? Is Japan seriously contemplating a currency intervention to prop up the ailing yen? There has been some speculation that 145 could be a line in the sand for the MOF, but in fairness, there was similar talk when yen hit 130 and then 135, and the MOF and BoJ stayed on the sidelines. Read next: The Ethereum Market Remains Under Strong Bearish Pressure| FXMAG.COM The likelihood is that Tokyo will avoid such a dramatic move, which last occurred in 2011. The Ministry of Finance (MOF) and the Bank of Japan are not happy with the rapid descent of the yen, but an intervention would require the consent of the G-20, which is unlikely to give its consent. The BoJ made waves this week after a report that it had conducted a rate check, which was viewed as a possible prelude to an intervention. Finance Minister Suzuki has been coy about what moves he might make, and refused to comment on whether the BoJ had made a rate check. The BoJ has rigidly maintained its ultra-loose monetary policy in order to stimulate Japan’s fragile economy. As part of this policy, the BoJ has kept a firm hand on its yield curve control, and the price for this stance has been a freefall in the yen, which is done an astounding 30% against the dollar this year. With the Fed looking to hike next week by 75 basis point, and an outside chance of a massive full-point increase, the yen’s downtrend is likely to continue, barring a spectacular response from Japanese officials. USD/JPY Technical 1.4363 is the next line of resistance, followed by 144.81 USD/JPY has support at 142.56, followed by 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen - calm before the storm? - MarketPulseMarketPulse

Summary:  The US dollar continues to drive higher together with the pricing for the Fed’s terminal policy rate reaching new highs near 4.50%. The JPY managed to hold the line and then some against a surging greenback as the market seems unwilling to challenge the Bank of Japan for now despite the higher US yields. Elsewhere, the descent in sterling is verging on scary, with GBPUSD staking out new record lows since 1985 below 1.1400 as EURGBP broke the range highs. FX Trading focus: Sterling descent getting scary after weak UK Retail Sales. USDJPY stays tame even with stronger USD and higher US treasury yields. The USD arched to new highs this morning versus a majority of G10 currencies, with USDJPY the notable pair not participating in the move as the market seems unwilling to challenge the Bank of Japan for now. One of the proximate triggers for a shift lower in risk sentiment late yesterday was the weak result and guidance from FedEx after US trading hours. As well, US short treasury yields continue to rise and provide plenty of pressure on markets. As for USDJPY, arguably longer yields are a more important coincident indicator, and US long yields have not yet broken to new cycle highs (3.50% for the US 10-year Treasury benchmark) although they are pushing hard on that level. The short end of the US yield curve, continues to rise apace even as the predictions for next week’s meeting pulled back slightly, meaning that the “terminal rate” for the cycle is getting priced higher – and has nearly hit 4.50%, more than a hundred basis points above where it was in early August. Data from the US yesterday was mixed. The headline US August Retail Sales report was slightly stronger than expected at +0.3% MoM vs. -0.1% expected, but July was revised down to -0.4% from 0.0%. The core Retail Sales data was slightly weaker than expected at +0.3% ex Autos and Gas, likewise with a negative revision (down to +0.3% for July after +0.7% was reported). Important to note that the US reports Retail Sales in nominal dollar changes, so this report suggests stagnating volumes. The latest weekly jobless claims data point yesterday was the lowest since late May, extending the recent falling trend. The UK August Retail Sales data this morning, on the other hand, was distinctly weak and set off an extension lower in sterling, as EURGBP broke above 0.8722 for the first time since early 2021 UK reports Retail Sales in volumes, not in nominal prices, and the month-on-month data developments were extremely weak, pointing to a steep real growth slowdown. Sales including petrol fell -1.6% MoM in August and -1.5% ex petrol. The August Ex Petrol volumes dip takes the data below the 2019 level in August, the first time that has happened in this calendar year. Waiting for the close of trade today for next steps as we have quarterly “witching” of massive derivatives exposures in the US today and with it, possibly erratic trading. Very interesting to see the combination of USDJPY unwillingness to move today together with USDCNH on the rise (so CNHJPY dropping), while EURUSD is also a bit stuck and backing up after trying lower in the European morning today. Some USD exhaustion creeping in at least within the G3? And if risk sentiment continues to deteriorate, will it remain always a function of the rising Fed expectations, or can it jump horses to concerns for the economic cycle? In other words, the eventual chief question may be: what happens to the USD if bond and stocks diverge in direction? Chart: GBPUSDGBPUSD declines took on extra energy this morning in the wake of the weak August UK Retail Sales data that showed a sharp contraction in volumes in August, a sign of real GDP contraction. This took EURGBP to new highs since early 2021 (pointing that out as an indication of isolate GBPS weakness), while GBPUSD drove down to record lows since the mid-1980’s. Not sure what can bring relief for sterling here save for a halt to the relentless rise in US yields and/or thawing risk sentiment after the steep plunge this week. As for next level, only round, psychological ones seem relevant as the 1985 lows near 1.0500 are impossible to compare in real effective terms after 37 years. Bulls will have to hope that sentiment shifts here and for a quick rejection of the new lows to confirm a divergent momentum scenario (stochastic indicator turning back higher after new price lows posted with indicator not at new lows). EURCHF hit new cycle lows yesterday below 0.9550, but these were rapidly rejected. Without any catalyst I could identify, this looks like possible intervention – perhaps as energy prices have calmed, meaning that the SNB wants to lean a bit the other way now? Very curious to hear the SNB next Thursday. Table: FX Board of G10 and CNH trend evolution and strength.The stronger euro beginning to stick out, as does the JPY resilience, as the smaller currencies and sterling have traded weakest. Gold hit the skids on breaking below the big range level around 1,680. CNH is on the weak side, which is interesting, given the strong US dollar, but let’s watch 7.20 in USDCNH to see if there is any real fireworks potential. Table: FX Board Trend Scoreboard for individual pairs.JPY has strengthened enough to have a go at flipping stronger versus NOP and NZD today. More interested in whether the CNHJPY rate flips negative next week. Upcoming Economic Calendar Highlights 1200 – Poland Aug. Core CPI 1215 – Canada Aug. Housing Starts 1400 – US Sep. Preliminary University of Michigan Sentiment Source: https://www.home.saxo/content/articles/forex/fx-update-sterling-descent-takes-gbpusd-to-historic-low-16092022

USD/JPY has been increasing for the past two trading sessions. At the time of writing, it is at the closing price of Wednesday last week, heading away from the target support level, which is 141.16. Meanwhile, the nested price channel line at 145.10 is becoming more important. Overcoming the resistance level will open the way towards the target level of 147.10. After all, the MACD line is directed towards the support level of 141.16, pushing the pair up. The Marlin oscillator has also left the overbought zone, indicating that it is ready to resume growth. In fact, in the four-hour (H4) chart, the pair is consolidating under the MACD line and is trying to get above the balance line. This will prompt a shift in interest, mainly in buying dollar instead of yen. The exit of the pair above the MACD line and above 143.76 will indicate the start of the move towards 145.10. And considering that the Marlin oscillator has been consolidating since September 14, there is a huge chance that the pair will hit 147.10.   Relevance up to 04:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321974

At the close on the New York Stock Exchange, the Dow Jones fell 0.45% to hit a monthly low, the S&P 500 index fell 0.72%, and the NASDAQ Composite index fell 0.90%. The leading performer among the components of the Dow Jones index today was Home Depot Inc, which gained 4.43 points (1.63%) to close at 275.97. Amgen Inc rose 3.48 points or 1.53% to close at 231.14. Johnson & Johnson rose 2.52 points or 1.53% to close at 167.60. The losers were Boeing Co shares, which fell 5.49 points or 3.67% to end the session at 144.29. Chevron Corp was up 2.60% or 4.17 points to close at 156.45, while Walt Disney Company was down 2.28% or 2.52 points to close at 108. 25. Leading gainers among the S&P 500 index components in today's trading were Iron Mountain Incorporated, which rose 3.35% to hit 55.29, Newmont Goldcorp Corp, which gained 3.09% to close at 43.71, and also Dollar Tree Inc, which rose 2.89% to end the session at 141.92. The biggest losers were FedEx Corporation, which shed 21.40% to close at 161.02. Shares of WestRock Co lost 11.48% to end the session at 34.15. Quotes of International Paper fell in price by 11.21% to 35.23. Leading gainers among the components of the NASDAQ Composite in today's trading were Panbela Therapeutics Inc, which rose 53.06% to hit 0.58, Applied Opt, which gained 50.40% to close at 3.76, and shares of Axcella Health Inc, which rose 29.57% to end the session at 2.41. The biggest losers were Aditx Therapeutics Inc, which shed 58.52% to close at 4.31. Shares of Esports Entertainment Group Inc lost 46.15% and ended the session at 0.18. Shuttle Pharmaceuticals Inc lost 45.94% to 8.99. On the New York Stock Exchange, the number of securities that fell in price (2294) exceeded the number of those that closed in positive territory (816), and quotes of 121 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,586 stocks fell, 1,158 rose, and 233 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.11% to 26.30. Gold Futures for December delivery added 0.38%, or 6.35, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 0.29%, or 0.25, to $85.35 a barrel. Brent oil futures for November delivery rose 0.81%, or 0.74, to $91.58 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.10% to 1.00, while USD/JPY fell 0.40% to hit 142.95. Futures on the USD index fell 0.02% to 109.43.   Relevance up to 05:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293169

The structure of the USDJPY currency shows the formation of a global impulse trend, which consists of cycle waves On the current chart, we see how the price rises in a cycle wave V. Wave V, apparently, takes the form of a 5-wave impulse ①-②-③-④-⑤ of the primary degree. In the specified pulse, the first four parts look completed. Currently, we assume the construction of the primary fifth wave, which takes the form of an intermediate impulse. The price in the final primary wave ⑤ may rise to 148.09. At that price level, wave V will be at 200% of previous cycle impulse III. An alternative scenario shows that the entire cycle wave V has already completely ended in the form of a primary impulse. Thus, in the next coming trading weeks, we can expect a fall in the exchange rate and the formation of a new bearish trend. In the short term we may see the formation of bearish impulse, which will consist of primary sub-waves ① -② -③ -④ -⑤, as shown on the chart, where the first two small sub-waves ① - ② have already been built. The upcoming decline may reach the area of 130.43, that is, the previous minimum of fluctuations, and then even lower.

Technical analysis:     USD/JPY has been trading sideways in last few days and there is the symmetrical triangle pattern in creation. Watch for potential breakout to the upside. Trading recommendation: Due to the upside cycle on the USD/JPY and potential for the breakout of the triangle watch for the upside breakout to confirm further bull continuation. Watch for the potential buying opportunities in case of the upside breakout. Stochastic oscillator is showing fresh bull cross, which is good sign for further bull move. Key support is set at the price of 142.50   Relevance up to 08:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293201

Summary:  Today we look at the weak equity market as traders nervously await a raft of central bank meetings this week as most are set to tighten rates further. In FX, we note the interesting reduction in euro shorts in the US currency futures positioning as the euro remains resilient, with most of the USD long position there expressed in GBPUSD and USDJPY. In commodities, we focus on longer term support for copper, while the equities focus this week is on names like Sea Limited, US homebuilders with the backdrop of US housing data, and Amazon. Today's pod features Peter Garnry on equities, Ole Hansen on Commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/podcast/podcast-sep-19-2022-19092022

USD/JPY: The chart shows the movement of USD/JPY in the 30-minute (M30) chart. The pair is currently trading at the resistance level of £ 143.50. Its breakdown will pave the way for further growth towards £144.00 per $1. Meanwhile, the breakdown of £144.00 will lead to a rise to £145.00. In case of a rebound, the pair will head towards £143.00. Good luck!     Relevance up to 12:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322046

The Japanese yen is trading lower today. In the North American session, USD/JPY is trading at 143.52, up 0.44%. Japan’s Core CPI, a key inflation indicator, is expected to rise to 2.7% in August, up from 2.4% in July. Fed, BoJ to meet later this week Central banks will be in the spotlight this week, with the Federal Reserve meeting on Wednesday and the Bank of Japan on Thursday. The yen hasn’t posted a winning week since early August and fell to 144.99 earlier this month, its lowest level since 1998. The sharp depreciation of the yen promises to be high on the agenda at BoJ’s meeting. The yen has borne the brunt of the BoJ’s ultra-accommodative policy, which has kept a tight lid on Japanese government yields while US Treasuries are heading higher, thanks to the Fed’s continued tightening. This has left the yen at the mercy of the US/Japan rate differential, which continues to widen. The BoJ could provide relief to the yen by tightening policy, but Governor Kuroda has repeated that he will not tighten unless there is a clear indication that inflation is broad-based and sustained. With inflation at just 2.6%, the BoJ is in no hurry to tighten, unlike other major central banks, where soaring inflation is the number one priority. Read next: Because Of Interest Rate Decisions, This Week Major Forex Pairs As EUR/USD, US Dollar To Japanese Yen And GBP To USD May Be Rocking!| FXMAG.COM The BoJ and Japan’s Ministry of Finance have engaged in verbal rhetoric as the yen continues to slide, but without any action to back up their warnings, speculators continue to drive down the yen. After reports last week that the BoJ had conducted a rate check, speculation rose that Tokyo was considering a currency intervention, but such a drastic move still appears unlikely. The BoJ may use stronger language about its concern about the yen’s slide at this week’s meeting, but short of the Bank signalling a change in policy or hinting at intervention, the yen is unlikely to get any relief from the BoJ. USD/JPY Technical 1.4363 is the next line of resistance, followed by 144.81 USD/JPY has support at 142.56, followed by 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY pushes above 143, Core CPI next - MarketPulseMarketPulse

Then Bank of Japan is set to maintain a dovish stance this week. At the same time, the Federal Reserve is set to continue its hiking cycle. Thus, the USD/JPY pair could extend its upmove, economists at Commerzbank report. Prices in Japan continue to rise “The BoJ is likely to be the only G10 central bank to leave its ultra-expansionary monetary policy unchanged this week. This is despite the fact that prices in Japan are also rising at an increasingly rapid pace. As a result, criticism of Japan's monetary policy is likely to grow louder and downward pressure on the JPY will remain high.” “If the Fed acts decisively again tomorrow, USD/JPY could continue to trend upward. After all, the differences in monetary policies are simply too striking.”

Here is what you need to know on Tuesday, September 20: Major currency pair trade in familiar ranges on Tuesday as investors move to the sidelines ahead of key central bank policy decisions. The US Dollar Index (DXY), which closed virtually unchanged on Monday, moves sideways slightly above 109.50 and the market mood improves modestly with US stock index futures rising between 0.2% and 0.3%. Later in the day, Building Permits and Housing Starts data for August will be featured in the US economic docket. Consumer Price Index (CPI) figures from Canada will also be watched closely by market participants. Wall Street Journal author Nick Timiraos, who correctly leaked the 75 basis points (bps) rate hike in July, published an article late Monday and refrained from suggesting that the Fed could raise its policy rate by 100 bps on Wednesday. The greenback lost some interest after this development and the DXY erased its daily gains. The benchmark 10-year US Treasury bond yield stays relatively quiet near 3.5% on Tuesday. Federal Reserve Preview: Forecasting 5% interest rates? Dollar to move on dot-plot, Powell's pledges. Earlier in the day, Sweden's central bank, Riksbank, announced that it raised its policy rate by 100 bps to 1.75%, compared to Reuters' estimate for a rate increase of 75 bps. With the initial reaction, EUR/SEK fell to a fresh daily low of 10.7305 but managed to recover to the 10.8000 area. During the Asian trading hours, the Reserve Bank of Australia's (RBA) September monetary policy meeting minutes showed that policymakers saw a case for a slower pace of rate increases as becoming stronger. AUD/USD's reaction to the RBA's publication was largely muted and the pair was last seen trading flat on the day at around 0.6730. Annual CPI in Canada is expected to decline to 7.4% in August from 7.6% in July. Ahead of this data, the USD/CAD pair trades in a tight range near the mid-1.3200s. EUR/USD managed to stage a rebound in the second half of the day on Monday and closed in positive territory above parity. The pair was last seen posting small daily gains near 1.0030. GBP/USD clings to modest daily gains at around 1.1450 early Tuesday. “There aren’t currently any negotiations taking place with the US and I don’t have any expectation that those are going to start in the short to medium term," British Prime Minister Liz Truss said regarding a potential trade deal with the US but these comments were largely ignored by market participants. The data from Japan revealed on Tuesday that the National CPI climbed to 3% in August from 2.6% in July. Although this print came in stronger than the market expectation of 2.6%, USD/JPY managed to hold its ground and was last seen rising 0.2% on the day at 143.50. Gold is having a tough time attracting buyers and trading in negative territory slightly above $1,670. The resilience of the 10-year US T-bond yield makes it difficult for XAU/USD to gather recovery momentum. Bitcoin shook off the bearish pressure late Monday but it's yet to reclaim $20,000. Ethereum gained nearly 3% on Monday but failed to preserve its bullish momentum early Tuesday. At the time of press, ETH/USD was down 1% on the day at $1,360.

Summary:  These are remarkable times as the Riksbank manages to surprise the market with a full 100 basis point rate hike and yet EURSEK trades unchanged within half an hour of the decision. This is likely on faltering risk sentiment this morning in Europe as the market mulls the risk that the Powell Fed has come to realize that actions speak far louder than guidance, as we mark up the odds for a 100 basis point hike at tomorrow’s FOMC meeting. FX Trading focus: Fed’s obsession with not surprising may be a thing of past: look for 100 basis points after Riksbank went 100 bps this morning. The Swedish Riksbank surprised today with a 100 basis point hike to take the rate to 1.75%, a move only a minority were looking for. This, in addition to guidance that the Riksbank would look to continue hiking rates, took Swedish yields higher, but didn’t do much for the currency. The reaction there, in fact, was remarkable as EURSEK fell well over a percent on the decision only to trade above the level prevailing immediately before the announcement within five minutes and then rising to new cycle highs since March a bit over half an hour after the decision. As I wrote in this morning’s Quick Take, I suspect SEK weakness (EURSEK top of range, USDSEK near all-time highs of 11.04 from 2001) might have tipped the scales, though the krona was not mentioned explicitly in the Riksbank’s statement today. That takes us to the FOMC meeting tomorrow. I have suggested in recent comments that it is less material whether the Fed moves 75 or 100 basis points at tomorrow’s meeting, provided that the Fed maintains sufficiently strong guidance on the terminal rate by the end of this year and an even higher rate forecast for 2023, but my thinking has evolved this morning and I am already leaning far more in favour of the Fed delivering 100 basis points. One aspect that in the past might have held back the Fed from hiking more than the market has priced (80-85 bps priced in this morning, depending on the measure of expectations) was the seeming Fed obsession with having the rate decision fully priced before the fact as was so patently obvious ahead of the June 16 FOMC meeting, which saw the leak of a WSJ article by noted Fed whisperer Nick Timiraos suggesting a 75 basis point move when the market was priced for only a 50-bp move. Given the stark Jackson Hole speech from Fed Chair Powell and the strong CPI data and other resilient US data, I wonder if this Fed is happy to change behaviour and let a proper surprise rip the market with a 100-bp move tomorrow together with a strong lifting of guidance and a 2024 PCE core forecast lift from its 2.3% level. Even better would be a 112.5 move that does away with the silly quarter-point upper-lower bound of the Fed policy rate and sets the rate to 3.50%.  Already, given that the market’s thinking is shifting in the direction of a 100-bp move tomorrow, the Fed almost has to do so or it will be delivering a dovish surprise with anything less. Fed actions will speak louder than guidance. Chart: USDJPYGet ready for chaos in USDJPY as US 10-year yields are already rising to new cycle highs ahead of the FOMC meeting and the Bank of Japan meeting only hours later in Asia’s Thursday session. The Bank of Japan and Ministry of Finance achieved a modicum of respect with their latest verbal intervention, as fresh highs in long US treasury yields haven’t seen USDJPY challenge the 145.00 level yet, but if the Bank of Japan fails to shift after a more hawkish Fed (our bias), then watch out for significant volatility risk to the upside, followed by a likely intervention fight to follow, as discussed in my colleague Charu’s latest excellent piece.   RBA minutes overnight were nothing to write home about for Australian rates, but AUDNZD jumped higher through the key 1.1250 area resistance, a possibly seismic move we have been out the lookout for since the pair approached that level a few weeks ago. We have argued that a significant resetting higher of the currency pair is possible – possibly toward 1.2000 and higher – given the diverging trajectories of the two countries’ current accounts. Table: FX Board of G10 and CNH trend evolution and strength.The kiwi is getting squashed and the RBNZ may have to change its mind about where the policy cycle may have to go at some level of NZD weakness. Elsewhere, watching the G3 over the FOMC to see if a hawkish surprise can continue to drive USD strength there as well as versus the weaker currencies. If we are set to test new equity bear market lows, SEK may be set for extended weakness and USDSEK may be set for a go at its all time high above 11.00 as EURSEK is also threatening higher. Table: FX Board Trend Scoreboard for individual pairs.AUDNZD has torn above resistance – big development there, even if nominally, there are some shreds of resistance up to 1.1430 before the big space opens up on the chart. Elsewhere, EURSEK trades top of range despite and USDSEK is 2% from all time level of 2001 ahead of FOMC meeting tomorrow. Interesting that USDJPY remains range-locked despite US 10-year yield at new highs this morning – helmets on there as noted above. Upcoming Economic Calendar Highlights 1230 – Canada Aug. Teranet/National Bank Home Price Index 1230 – US Aug. Housing Starts & Building Permits 1230 – Canada Aug. CPI  1700 – ECB President Lagarde to speak Source: https://www.home.saxo/content/articles/forex/fx-update-riksbank-raises-risk-of-100-bp-hike-from-fomc-20092022

On Tuesday, the USD/JPY pair added 54 points amid an overall strengthening of the dollar by 0.53%. The US stock market lost more than 1% of capitalization yesterday (S&P 500 -1.13%, Russell 2000 -1.36%), but investors are still guided by the situation with the dollar. We believe that after the hype subsides after the Federal Reserve's rate hike, the yen may strengthen under the pressure of stock indices. While we are waiting for the price to rise to the nearest target of 145.10 - to the embedded line of the global price channel, if it is overcome, the growth will continue to the next line at 147.10. A price divergence with the Marlin Oscillator is possible in the area of the second target. This will be a sign of a trend reversal. The price is consolidating under the MACD line (143.83) on the four-hour chart. Consolidating above it, as an initial success, will push the price to storm 145.10. The Marlin Oscillator is moving sideways in the positive area. We are waiting for the Fed's decision and the dollar's growth against the yen. Relevance up to 04:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322222

USD/JPY struggles to capitalize on its modest intraday uptick on Wednesday to a one-week high. The anti-risk flow benefits the JPY and caps the upside amid a modest fall in the US bond yields. Strong follow-through USD buying offers some support ahead of the key FOMC policy decision. The USD/JPY pair struggles to find acceptance above the 144.00 mark and retreats from a one-week high touched this Wednesday. The pair slides back below mid-143.00s during the early European session and is pressured by reviving demand for the safe-haven Japanese yen, though lacks follow-through selling. The market sentiment remains fragile amid concerns that rapidly rising interest rates will lead to a deeper global economic downturn. Apart from this, headwinds stemming from China's zero-covid policy and the protracted Russia-Ukraine war have been fueling recession fears. This, in turn, tempers investors' appetite for riskier assets and is driving haven flows towards the JPY. The anti-risk flow is reinforced by a modest pullback in the US Treasury bond yields, which is seen as another factor exerting some downward pressure on the USD/JPY pair. That said, a strong pickup in the US dollar demand, bolstered by hawkish Fed expectations, should continue to lend support to spot prices and help limit deeper losses ahead of the key central bank event risks. The Federal Reserve is scheduled to announce its decision at the end of a two-day policy meeting on Wednesday and is widely expected to deliver another supersized 75 bps rate increase. The markets also seem convinced that the US central bank will stick to its aggressive rate=hiking cycle to tame inflation, which should act as a tailwind for the US bond yields and the greenback. Hence, the focus will remain glued to the updated economic projections, the so-called dot plot and Fed Chair Jerome Powell's comments at the post-meeting press conference. Investors will look for fresh clues about the future rate hike path. This, in turn, will play a key role in influencing the USD price dynamics and help determine the near-term trajectory for the USD/JPY pair. This will be followed by the Bank of Japan meeting on Thursday. The Japanese central bank remains committed to maintaining ultra-low interest rates and dovish policy guidance. This marks a big divergence from a more hawkish stance adopted by other major central banks, which supports prospects for an extension of the USD/JPY pair's recent strong appreciating move.

Tonight, the Federal Reserve will announce another increase in interest rates, and a few hours later, the Bank of Japan will make a statement. In anticipation of the climax, the USD/JPY pair shows volatility. What helps the dollar? The US central bank began a 2-day meeting on monetary policy on Tuesday. The long-awaited verdict on interest rates will be announced this evening. Most analysts predict that the central bank will raise the indicator by 75 bps again. There is also an opinion that the Fed may further strengthen its anti-inflationary campaign, since previous measures were ineffective. Recall that the latest data on inflation in the United States greatly disappointed the market. The August report published last week showed an insignificant slowdown in consumer price growth. Last month, inflation in America was 8.3% year-on-year, which is still significantly higher than the Fed's target of 2%. Given the disappointing statistics, some market participants began to incline to the fact that at the September meeting, the US central bank will begin to act more aggressively and raise rates by 100 bps. Increasing speculation on this topic dispersed ahead of the yield of 10-year US bonds. Yesterday, the indicator jumped to an 11-year high of 3.59%. The surge in profitability provoked a sharp positive dynamics of the dollar. The DXY index tested a 2-week peak at 110.27 on Tuesday. According to tradition, the greenback made the steepest ascent against the Japanese currency. On the first day of the Fed meeting, the USD/JPY asset was again above the 144 mark. The dollar also held steady at this level at the beginning of Asian trading on Wednesday. Additional support for the greenback was provided by expectations of a dovish speech by Bank of Japan Governor Haruhiko Kuroda. The BOJ's monetary policy report will be released tomorrow morning. Most experts predict that the Japanese central bank will maintain its ultra-soft monetary rate. In this case, the divergence in US and Japanese interest rates will increase even more, which will contribute to the further rally of the USD/JPY pair. What supports the yen? However, not all experts share optimism about the dollar-yen asset. There is an opinion that in the short term, the quote may face serious obstacles that will limit its growth. This is exactly what happened today towards the end of the Asian session. The USD/JPY pair turned sharply to decline and plunged below the 144 mark. Several factors put pressure on the dollar. One of them is another wave of speculation about a possible currency intervention. On Tuesday evening, the former head of the currency department of the Japanese Ministry of Finance Tatsuo Yamasaki said that the Japanese authorities will not wait for the green light from the United States and will resort to unilateral intervention when they see fit. "The exchange rate check initiated by the Bank of Japan last week means that the government is now ready to take action at any time. I do not see any serious obstacles to intervention, especially since Japan previously conducted almost all of its interventions unilaterally," he stressed. According to Yamasaki's forecast, Japanese politicians will press the button if another strong speculative movement of the yen occurs over the next few days. In addition to the growing risk of intervention, the pressure on the USD/JPY pair is now exerted by an unexpected increase in expectations regarding a possible change in the rhetoric of the BOJ. Of course, given Kuroda's previous dovish statements, no one expects him to suddenly change his shoes and move to the hawk camp. But we cannot rule out another option: the BOJ may well take a neutral position. The probability of such a scenario has increased dramatically in the light of the latest inflation data. According to the report of the Japan Statistics Bureau, the national consumer price index was 3% in August, which is higher than the forecast and the July value of 2.6%. In addition, the core inflation indicator, which excludes food and oil prices, also increased in August. It rose to 1.6% against 1.2% recorded a month earlier. As we can see, inflationary pressure in the country is growing, and it is increasingly difficult for the BOJ to ignore this problem and postpone its solution. Therefore, there is hope that this month the BOJ will still consider the option of switching to a neutral monetary policy. In this case, the yen may receive short-term support, and the USD/JPY pair will have another rollercoaster ride. Relevance up to 10:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322268

USD/JPY continues to show limited movement this week. In the North American session, USD/JPY is trading at 144.10, up 0.27%. BoJ unlikely to change policy The Japanese yen has depreciated by over 20% this year, and the yen’s slide will be high on the agenda at the Bank of Japan’s meeting on Thursday. We could see some strong rhetoric expressing deep concern about the yen, but the central bank has stayed on the sidelines during the yen’s long slide and I don’t expect that to change. The BoJ is committed to its ultra-accommodative policy, in order to boost Japan’s weak economy. Inflation has been rising, but Governor Kuroda has said he won’t tighten policy until it’s clear that inflation is sustainable, which would mean solid wage growth. There have been some rumblings about currency intervention by Tokyo, and the yen received a short boost in the arm earlier in September, after a report that the BoJ had conducted a rate check, which could have been a prelude to intervention. Japan hasn’t taken such a drastic move since 2011 and would require the consent of the G-20 to do so. As part of its loose policy, the BOJ has been very firm with its yield curve control, and the yen has borne the brunt of this policy, as the US/Japan rate differential continues to widen. With the Federal Reserve poised to raise rates by 75 or even 100 basis points later today, the outlook for the yen appears grim. The markets are anxiously awaiting the Fed’s rate announcement, as well as the Fed’s quarterly economic forecast. This will include projections for unemployment, inflation and interest rate levels. If Fed Chair Powell’s message is ‘higher for longer’ with regard to rate levels, investors could respond by sending the US dollar higher. USD/JPY Technical There is resistance at 144.71 and 146.49 USD/JPY has support at 143.19, followed by 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen steady ahead of Fed, BoJ - MarketPulseMarketPulse

With the rate differential widening, there is little room for USD/JPY slides. The Bank of Japan is widely anticipated to maintain its monetary policy unchanged. USD/JPY is in a consolidative phase near a two-decade high of 144.98. Following the US Federal Reserve’s policy announcement, it will be the turn of the Bank of Japan to decide on its monetary policy. Against the tide, the BOJ is widely anticipated to maintain the status quo, leaving rates at record lows of -0.1% and the yield curve control policy on hold. The latter means the central bank will continue unlimited bond purchases to keep the yield on the 10-year government bond around 0%. Finally, the central bank is expected to confirm the end of its special coronavirus financing program in September, as previously announced. The Japanese central bank´s strategy to maintain inflation at 2% stopped working five months ago. According to official figures, the annual inflation rate rose by 3% in August from 2.6% in the previous month. The Consumer Price Index rose for twelve consecutive months, and while it remains far below that of its major counterparts, the global pressure points to a further upside. As Japan is a net energy importer, the Russian conflict is also causing an increased trade deficit in the country. As a result of this situation, the Japanese yen plunged to a two-decade low against its American rival. However, there are null chances the BOJ will suddenly change course and decide on quantitative tightening. Formal intervention in the making? There is, however, one caveat. Bank of Japan Governor Haruhiko Kuroda has reportedly conducted a foreign exchange check, which somehow opens the door for formal intervention. The central bank meeting could be the perfect time to announce a measure in that direction The imbalance with all other central banks is likely to keep USD/JPY on its way up, although an unexpected tightening could result in the pair plummeting hundreds of pips. Nevertheless, and as long as the rate differential keeps widening, the pair will likely continue to reach record highs. USD/JPY possible reactions The USD/JPY pair has been consolidating gains after reaching 144.98 on September 7, without technical signs of long-term bullish exhaustion. Should policymakers hint at some form of tightening, there’s still little room for the JPY to add. Market players would need action to react to the event rather than promises. The base of the latest range is the 141.50 price zone, a potential bearish target should Japanese policymakers drop the yield curve control or unexpectedly hike rates. A break below the level could trigger large stops and result in USD/JPY nearing the 140.00 figure. Formal intervention could also take its toll on USD/JPY, although the potential slump will depend on the measures announced. The impact of the latter could be short-lived. On the other hand, an on-hold decision could take the pair beyond the aforementioned two-decade high.

Technical analysis: USD/JPY has been trading upside as I expected and the price has reached the first upside objective at the price of 145. Anyway, I see potential for further upside movement due to the strong upside momentum. Trading recommendation: Due to the strong upside pressure in the background and breakout of the multi day triangle pattern I see potential for further big growth. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 146.50 and 147.50. MACD oscillator is showing fresh upside momentum, which is strong sign that buyers are in control. Key support is set at the price of 143.50   Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293784

Summary:  The FOMC delivered a hawkish message to the market sending equities and bonds lower. Russia also announced a partial mobilization of its reservists increasing the stake in its war in Ukraine impacting commodities. We go through the details of yesterday's FOMC decision and details, and what knock-on effects they have caused throughout the various markets. We also discuss BOJ's decision to stay firm on its rate policy putting more pressure on JPY. Today's pod features Peter Garnry on equities and Ole Hansen on commodities. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Share   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-22-2022-22092022

The Bank of Japan, as expected, left monetary policy unchanged, which prompted USD/JPY to pass the145 handle vs the USD. Top FX official, Mr. Kanda, reiterated his warnings about FX interventions when needed, while Governor Kuroda did not significantly change his rhetoric on the currency.  -0.1% BoJ's policy rate   As expected The BoJ's decision to stay pat was unanimous and forward guidance is flagging the downside risk The Bank of Japan has made it clear that it will stick with its ultra low monetary policy until inflation stays at around 2% in a more sustained fashion. In addition, the BoJ decided to phase out its pandemic relief loan programme which were suppsed to terminate in September. Instead, part of the programme will extend until March next year. Taken together with today's results, the forward gudiance indicates downside risks for the economy and policy normalization is still far away. There are four policy meetings left until Governor Kuroda retires next April, and there is little possibility of policy change at these four meetings. Also, it is still too early to tell but it appears that it will take some time for the BoJ to make any policy changes even after Governor Kuroda steps down. Government efforts to curb inflation continue mainly through fiscal support, not through FX intervention With the weaker yen pushing import goods prices higher, the government is expected to mitigate negative shocks from the price increase through fiscal support. The industry ministry announced that the gasoline subsidy for oil distributors is set to rise to 36.7 yen (about USD0.25) per litre for the seven days from Thursday (vs 35.6 yen a week earlier). The temporary subsidy programme was introduced in January and has been extended several times since then. We expect the subsidy programmes for oil and food, and some cash transfer programmes targetting low-income households, to continue.   Shortly after the BoJ's rate decision meeting Japan's top fx official, Mr. Kanda, said that the government could conduct stealth interveion in the fx market when needed. The government has not stepped into the fx market yet. We think that FX market intervention is possible, but that this only aims to smoothe out volatile currency movement, not to change the course of currency depreciation. Market intervention is not an effective way to stablize prices or bring the JPY down below 145. With Governor Kuroda's comments that BoJ future guidance won't need to change for the long-term, this will likely put more pressure on the currency.  USD/JPY: Collision course for 150? In response to unchanged BoJ policy and increasing doubts about the political feasibility of FX intervention, USD/JPY has traded close to 146. As above, Japanese authorities will struggle to reverse a powerful dollar bull trend with intervention. We also assume that the bar is exceptionally high for the Japanese to receive approval for FX intervention from the US Treasury. Washington will argue that if Japan wants a stronger yen it should hike rates. This suggests that USD/JPY can continue to push towards 150 (our rates team sees US 10 year Treasury yields biased to 3.75%, if not 4.00%) and Japanese authorities increasingly hitting the wires with intervention threats. The next big event risk now may be the 12 October meeting of central bank governors and finance ministers in Washington. The Japanese will have to convince US authorities that the strong dollar is a problem, such that G20 FX language is altered. That is a tough task, with the Fed still seemingly welcoming dollar strength.      Read this article on THINK TagsBank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

It has been a wild ride for the Japanese yen today. USD/JPY initially jumped over 1% earlier today but has reversed directions. In the European session, USD/JPY is trading at 142.27, down 1.24%. BoJ stays pat, MoF issues warning With the Japanese yen continuing to fall, there have been rumblings that the Japanese government could respond with a currency intervention. The yen even posted gains earlier this month, after a report that the Bank of Japan had conducted a rate check, which could have been a prelude to intervention. The markets have heard plenty of verbal rhetoric from Japanese officials expressing deep concern about the yen, but no action followed. With USD/JPY rising just short of the 145 line this month, there was speculation that “this time would be different” and the BoJ would not sit idly by at today’s policy meeting. In the end, however, the BoJ stayed on the sidelines and maintained its policy settings. The BoJ affirmed its ultra-accommodative policy and said it would increase stimulus if needed. Predictably, the yen took a tumble, falling as low as 145.90. Today’s drama was far from over, however. After the decision, the country’s top currency diplomat and Vice-Minister of Finance, Masota Kanda issued a warning that the government was ready to take action at any time to prop up the yen and could conduct “stealth intervention”. The markets are taking Kanda’s threat and USD/JPY has moved sharply lower. The tug-of-war between the Ministry of Finance and the Bank of Japan is likely to continue, which should translate into plenty of movement from the yen. Read next: Can USD/JPY Near 150.00? Bank Of Japan Didn't Surprise Markets, But BoJ Members Comments Are Quite Interesting| FXMAG.COM In the US, the Federal Reserve raised rates by 0.75%, as expected. This brings the benchmark rate to 3.25%, which is considered restrictive territory. The Fed’s economic projections were more hawkish than expected, with unemployment projected to hit 4.4% in 2023 and the Federal funds rate to rise to 4.6% in this cycle. The Fed has signalled that inflation remains priority number one, even at the price of a recession. USD/JPY Technical USD/JPY tested resistance at 144.71 but then retreated. Above, there is resistance at 146.49 USD/JPY is testing support 143.19. The next support line 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen goes on roller-coaster after BoJ meet - MarketPulseMarketPulse

Previous trading tips in USD/JPY pointed to a possible increase in prices. That is exactly what happened today, after the press conference of the Bank of Japan. The pair broke through the level of 145 with great volatility, giving long positions quite good profit. Plan: Development: Congratulations to those who followed the strategy! The pair moved by as much as 2,000 pips. Traders should now close long positions to get good profit. The trading idea was based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 09:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322394

Japan intervened in the forex market for the first time since 1998 as the yen's losses intensified amid a divergence in the country's monetary policy with the United States. Yen hit 142.48 per dollar after falling above 145 per dollar because the Bank of Japan maintained ultra-low interest rates following the Federal Reserve's decision the day before to raise its key rate by 75 basis points. Japanese authorities have stepped up verbal warnings in recent weeks, stressing that the government is ready to take action at any time and may carry out covert intervention. This is very surprising as the country has long been criticized for tolerating or even encouraging a weak currency on behalf of its exporters. The last time Japan strengthened yen through direct intervention was during the Asian financial crisis in 1998, when the exchange rate hit 146 and threatened the fragile economy. It has also previously intervened around 130 to weaken the currency in 2011. This year, yen has fallen about 20% against dollar, making it the worst performer among the G-10 currencies. But Japanese businesses and households are becoming increasingly vocal about the negative impact of the weaker yen as commodity and energy costs rise. Further declines will most likely put pressure on the consensus between a central bank determined to spur inflation and a government desperate to avoid a cost-of-living crisis. Relevance up to 11:00 2022-09-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322405

Japanese authorities have today intervened to sell USD/JPY for the first time since 1998. With the Fed turning ever more hawkish and the BoJ still printing money, it looks like the Japanese government wanted to stop a quick run to 150. Japanese authorities could well be doing battle with the FX market for the next 6-9 months as the dollar stays strong Japan's Ministry of Finance The warnings were there Over recent weeks the warnings from Tokyo had been building. Descriptions of one-sided moves and moves out of line with fundamentals morphed into more explicit threats to intervene. Today those threats materialised in intervention, with the Bank of Japan selling USD/JPY to the market from around the 145.70 level. The Ministry of Finance's website suggests it now reports intervention on a bi-monthly basis. The next release of data is on 30 September. Comparisons with markets 20-plus years ago come with the appropriate health warning. For what it’s worth, when Japanese authorities started intervening to sell USD/JPY in December 1997, they made a splash by buying around JPY1trn over a consecutive three-day period – i.e. they sold close to US$8bn. Objectives and outlook Presumably, Tokyo wanted to break the cycle of an ever-higher USD/JPY, even though Japan’s policy of effectively draining liquidity with JPY buying operations is at odds with the BoJ’s ongoing JPY-liquidity add through its various quantitative easing programmes. Japanese officials will be well aware of this contradiction and probably hope to slow or stabilise USD/JPY – rather than actively seek a reversal of the very powerful dollar bull trend. We are also a little surprised that Tokyo went with the intervention. Either authorities had Washington’s blessing or they wanted to flex their domestic policy muscles against the overriding G20 mandate of flexible exchange rates. The issue now will be whether G20 central bankers and finance ministers agree that FX markets have become disorderly when they issue their next Communique on 12 October. Clearly, investors are going to think twice about paying for USD/JPY over 145 now. And one can argue that we will now enter a volatile 140-145 trading range. But expect investors to be happy to buy dollars on dips near 140/141 knowing that Tokyo will find it impossible to turn this strong dollar tide – a tide that should keep the dollar supported through the remainder of this year.      BoJ sells USD/JPY for the first time since the late 90s Source: Japanese MoF, ING Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

USD/JPY retreats sharply from a fresh 24-year peak after Japan intervenes in the FX market. The intraday USD corrective pullback from a two-decade high contributes to the steep decline. Rising US bond yields, the Fed-BoJ policy divergence limits any further losses, at least for now. The USD/JPY pair witnessed a dramatic intraday turnaround on Thursday and plunges over 550 pips from the vicinity of the 146.00 mark, or a fresh 24-year high touched this Thursday. The pair maintains its heavily offered tone through the early European session and hits a nearly three-week low in the last hour, though rebounds thereafter. Japanese authorities intervened in the forex market for the first time since 1998 to stem the rapid decline in the domestic currency and trigger a massive sell-off around the USD/JPY pair. The strong intraday rally in the Japanese yen gives the US dollar bulls to take some profits off the table, especially after the recent strong run-up to a two-decade high. This was seen as another factor that aggravated the bearish pressure surrounding the major. That said, a recovery in the risk sentiment, as depicted by a generally positive tone around the equity markets, should keep a lid on any further gains for the safe-haven JPY. Apart from this, a fresh leg up in the US Treasury bond yields, bolstered by a more hawkish stance adopted by the Federal Reserve, supports prospects for the emergence of some USD dip-buying. This, in turn, assists the USD/JPY pair to rebound over 100 pips from the daily low. It is worth recalling that the Fed raised interest rates by another 75 bps on Wednesday and signalled more large rate increases at its upcoming policy meetings. In contrast, the BoJ left its policy settings unchanged and reiterated that it will continue powerful monetary easing. This marks a big divergence in the Fed-BoJ policy outlooks, which has been a key factor behind the yen's slump of over 25% against its American counterpart since the beginning of 2022.

Yesterday, the yen was traded in the range of 550 points, significantly puncturing both resistance and support levels. The volume of daytime trading was a record for the year and it seems that all the nervous growth of the last two weeks has ended. The Marlin Oscillator approached the border with the territory of the declining trend, ready to attack it synchronously with the price that is assigned to the support of 141.25. Overcoming the support opens the next one with a target of 139.30. On a four-hour scale, the price is firmly retained under the balance indicator line (red), and the Marlin Oscillator is also declining in the negative area. We are waiting for the price to overcome the nearest support of 141.25 and its further decline to the target level of 139.30.   Relevance up to 04:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322465

After a tumultuous week in FX where even the US Treasury understood Japan’s need for FX intervention on the back of ‘heightened volatility’, markets may be more calm today. The Central and Eastern Europe region is still looking for solid ground after the news from Russia and Hungary remains the number one topic USD: Calm down Yesterday’s FX intervention from the Bank of Japan (BoJ) has slowed the dollar bull trend little. The amount of dollars sold will not be revealed until 30 September, but it should be in the billions. While the US Treasury said the US did not jointly intervene with the BoJ, the fact that it said it ‘understood’ why the intervention took place could raise expectations that G20 finance officials tweak the laissez-faire FX language in their communique when they meet on 12 October. We doubt this intervention puts a top in the dollar, but investors will think twice about paying for USD/JPY over 145 now that the BoJ has started its intervention campaign. The US data calendar is light today and FX markets may choose to consolidate in narrow ranges after a volatile week. DXY to consolidate well within a 110.50-111.50 range. Chris Turner    EUR: PMIs to keep euro capped EUR/USD has remained on the back foot in line with the global risk sentiment and the market’s concerns about the latest developments in the Russia-Ukraine conflict. Today’s highlight in the eurozone will be the release of September PMIs, and investors are expecting a further drop in economic contraction territory. That should keep European sentiment weak, especially after yesterday’s consumer confidence hit a record low, and may prevent any relief rally in the EUR for the time being. The 0.9800 level is looking increasingly fragile. On the European Central Bank side, two hawks are set to speak: Bundesbank President Joachim Nagel and Latvia’s Martins Kazaks. Chances of hawkish comments lifting the euro at this stage are rather slim though. Elsewhere in Europe, markets are digesting two central bank decisions: in Switzerland (a 75bp hike) and in Norway (a 50bp hike). The former triggered a squeeze in EUR/CHF positions which led to a post-meeting rally, possibly due to some investors having expected a Riksbank-style 100bp move. However, we do not expect the EUR/CHF rally to last, since – as discussed in this article – we think the Swiss National Bank will guide the nominal EUR/CHF exchange rate lower to keep the real rate stable. The Norges Bank 50bp hike was largely expected and was followed by a very muted NOK reaction. As highlighted in our meeting review – we noticed a dovish tilt in yesterday’s policy message, as the Bank signalled how a slower pace of tightening may be warranted now that the Norwegian economy is showing signs of a slowdown. However, we would be careful before ruling out another 50bp hike in November just yet. All this is still set to be quite a secondary theme for NOK, which remains driven by external factors and faces lingering downside risks due to its very high beta to global risk dynamics. Francesco Pesole GBP: Fiscal event planning Sterling net-net was a little lower after yesterday’s divided Bank of England hike. Today sees the big reveal of Chancellor Kwasi Kwarteng's ‘fiscal event’. As noted recently, typically looser fiscal and tighter monetary policy is a positive mix for a currency – if it can be confidently funded. Here is the rub – investors have doubts about the UK’s ability to fund this package, hence the Gilt underperformance. With the BoE committed to reducing its Gilt portfolio, the prospect of indigestion in the Gilt market is a real one and one which should keep sterling vulnerable. We favour GBP/USD pressing 1.10 over the next month and EUR/GBP pressing 0.88. Chris Turner CEE: Expected rating outlook downgrade is another blow to the forint Hungary will again top today's calendar in the region. Apart from the labour market data, we will also hear Finance Minister Mihaly Varga's speech and later today Moody's will publish a rating review. Given the still uncertain developments in the discussions between the European Commission and the Hungarian government, we expect a downgrade in the outlook to negative, just as S&P did in August. The FX market in the region is looking for solid ground after the news from Russia, which for now may be provided by the stability of the gas price, and which remains the main driver. On the other hand, interest rate differentials across the region are reaching new lows after another sell-off in developed markets and the US dollar is also not improving the outlook for CEE FX. In a nutshell, the picture is mixed and it is hard to find a way out. In our view at the moment, the Polish zloty has the best chance of erasing this week's losses thanks to its long-term squeezed positioning, and could return below 4.740 EUR/PLN for now. The forint could also see some gains today, but a deterioration in the rating outlook will bring the EU money theme and the negative market sentiment of the previous days back into play in our view. The Czech koruna should continue to maintain the intervention band 24.60-70 EUR/CZK and we do not expect it to break out of these levels at least until the Czech National Bank meeting next week. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

In this article: USD/JPY USD/CHF GBP/USD USDJPY pulls back for support The Japanese yen skyrocketed following the first Japanese currency intervention in 24 years. The pair swiftly reversed its course after flirting with the psychological level of 145.00. A break below 143.50 triggered a liquidation of leveraged positions. 140.50 along the 30-day moving average is a key level to probe buyers’ interest. A bounce would signal that the greenback is merely taking a breather and the uptrend remains intact in the medium-term. A rally back above 145.00 may carry the price to August 1998’ high at 147.50. Read next: Cryptocurrency: Bitcoin Up, Ethereum Price Found Support, Ripple Price (XRP) Jumped! | FXMAG.COM USDCHF tests key resistance The Swiss franc fell after the SNB's hike came short of the 100bp previously priced in. A clean cut above the support-turned-resistance at 0.9690 is a sign of strong interest. The double top at 0.9870 is a major hurdle after the pair went into a four-month long consolidation. Its breach would help the dollar reclaim parity and open the door to the previous ceiling at 1.0050, a step closer to a bullish continuation. In the meantime, the RSI’s overbought condition might cause a limited retracement and 0.9740 would be the first support. GBPUSD takes a breather The pound slipped as the BoE raised its interest rate by a moderate 0.5%. The bearish inertia has taken a front seat after Sterling slipped through March 2020’s lows (1.1420). The RSI’s repeated oversold situations have led to a brief pullback. The former demand zone around 1.1460 has become a supply zone where the bears could be expected to get in at a better price. Sentiment may only turn around if the bulls manage to push past 1.1700, which means that the path of least resistance seems to be towards 1.1100 for now.

Summary:  Equities are sliding further yesterday and today as the market is rattled by sizeable upwards moves in the long end of the US yield curve with the US 10-year pushing beyond 3.7%. We also go through the series of central bank events yesterday from various rate decisions and most importantly the historic JPY intervention by the Bank of Japan. In addition we take a look at commodities and in particularly the European gas market which is set for its fourth straight weekly loss. Today's pod features Peter Garnry on equities, Ole Hansen on commodities, and John Hardy on FX and hosting. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-23-2022-23092022

OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the major central bank rate decisions including the Fed, BoE and CBRT and the first FX intervention by Japan in 24 years. Subscribe on Android This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Market Insights Podcast (Episode 377) - MarketPulseMarketPulse   Read next: Cryptocurrency: Bitcoin Up, Ethereum Price Found Support, Ripple Price (XRP) Jumped! | FXMAG.COM

Summary:  The US dollar is following up on its initial strengthening move in reaction to the FOMC meeting on Wednesday after a more than a bit of chaotic intervention noise from Bank of Japan intervention yesterday. The important coincident indicator is the fresh surge in US longer treasury yields to new cycle highs. The correlation of moves across markets as risk sentiment deteriorates on this latest wave of higher USD and higher yields could see further volatility expansion. FX Trading focus: USD pulls higher still. Market ready to challenge the BoJ again soon? The USD has pulled higher still this morning, setting new cycle lows for EURUSD, GBPUSD and in other USD pairs, though with the notable absence of the USDJPY on the list as the market respects the risk of Bank of Japan intervention, at least at the margin. Still, the directional sympathy in USDJPY to the USD direction elsewhere has been in evidence since the pair bottomed below 142.00 overnight, trading above 143.00 as of this writing. More importantly, the massive surge in US long treasury yields to new cycle- and 11-year highs are piling on the pressure for the Bank of Japan to change its policy. US treasuries are the dominant driver across markets. Chart: USDJPYThe USDJPY situation played out largely as one might have anticipated after the FOMC took US yields higher and the Bank of Japan continued to take a stand on its currency policy and then made good on its intervention threats shortly after USDJPY breached 145.00 to the upside, taking the pair all the way back below 141.00 at one point before the price action stabilized. Now, the upside pressure has ratcheted significantly higher for the pair as the key coincident indicator for USDJPY historically, a longer-dated US treasury yield like the 10-year benchmark, surged yesterday by nearly 20 basis points. Without the BoJ’s presence and threats, we would likely be well on our way to 150.00. How long can the market stand to sit back before challenging the BoJ once again? It doesn’t seem a war the latter can win as long as Kuroda and company insist on staying pat with the current policy of freezing yields out to 10 years as US treasury yields march ever higher… Plenty of danger for market participants wanting to make that challenge, however, as the BoJ/MoF have shown tremendous determination in the past, at least when intervening against JPY strength as in 2003. Interesting reactions to two of the other central bank meeting yesterday, as the Bank of England merely hiked 50 basis points as the majority expected, but after a lean had developed in favour of a larger move, given the Riksbank and Fed hikes of larger magnitude this week. Ahead of the decision, the GBPUSD price action got caught up in the Bank of Japan intervention, but sterling trades relatively calmly despite the BoE’s decision if we have a look at EURGBP, as the BoE’s guidance for beyond this meeting was sufficiently hawkish to shift short UK yields sharply higher, likely in part on the plans to forge ahead with QT with plans to sell GBP 80 billion of holdings even as it surmised that the UK economy may already be in recession. GBPUSD reached remarkable new lows below 1.1200 this morning, while EURGBP is still sticky in the range. The flash Sep. UK Services PMI edged into contraction at 49.2 after 50.9 in August. A bit more drama yesterday around the SNB decision, where many were rushing to price in an exceptionally large hike, given the quarterly meeting schedule of the SNB. Alas, the SNB only hiked 75 basis points and made cryptic comments about intervening in either direction, shocking the CHF lower after EURCHF had traded to new lows as it gave the impression of a bit of pushback against the SNB using the currency as forcefully as a part of its inflation-fighting  arsenal. USDCHF positively soared. Could the SNB have some concerns about competitiveness of Swiss exporters? Regardless, the choppy EURCHF chart suggests that downside progress, if it continues, won’t be easy any more. The Norges Bank meeting yesterday was a spectacle, as the bank hiked the 50 basis points expected, but forecast that further rate tightening may soon end. Certainly out of touch with other CB signaling, and just look at NOK drop against the US dollar, hitting 10.50 today after trading sub-9.00 as recently as May! Looking ahead, we don’t have an awful lot on the US data calendar next week until the Friday August PCE inflation data, but we do have 2-yr, 5-yr and 7-yr treasury auctions set for Tue-Thu. As long as US treasury yields at 10-years continue posting new highs, that market will remain a key driver of sentiment, though it often (as in 1987 crash) in an extreme market volatility event suddenly changes character and attracts buying as a relative liquidity safe haven. Be careful out there. Table: FX Board of G10 and CNH trend evolution and strength.The former euro strength has decelerated, the CHF strength has decelerated even more post-SNB and the NZD and Scandies are the real weaklings of the lot. Gold playing the resilience card with all of this risk-off – stay tuned there. Table: FX Board Trend Scoreboard for individual pairs.The JPY crosses showing signs of trying to trend negative, but impossible to trust given the intervention backdrop and sovereign yields providing offsetting pressure. While the broader CNH strength picture remains a non-event, note USDCNH trading with a percent of the massive 2019-2020 top near 7.20 today and USDCNH trend reading at 10! USDCHF flipping up to a positive trend post-SNB was also an interesting one – can the pair threaten parity again? Upcoming Economic Calendar Highlights 1230 - Canada Jul. Retail Sales 1345 – US Flash Sep. S&P Global Manufacturing and Services PMI 1800 - US Fed Chair Powell to speak at event   Source: https://www.home.saxo/content/articles/forex/fx-update-spiking-long-us-treasury-yields-driving-riskoff-and-usd-meltup-23092022

Yesterday was supposed to be black Thursday for the yen, but everything turned out differently. The currency intervention carried out by Japan broke off the Napoleonic plans of USD/JPY. But for how long? Chronicle of the rise of USD/JPY The dollar-yen pair was finally able to break through the key 145 mark on Thursday morning, which it has already unsuccessfully stormed twice this month. The springboard for the asset was the divergence in the monetary policy of the Federal Reserve and the Bank of Japan. This week, the gap in US and Japanese interest rates has widened again. Recall that on Wednesday evening, the US central bank raised the indicator by 75 bps and hinted at more significant steps in the future. A few hours later, the Japanese central bank made a statement. As expected by the market, it announced the continuation of an ultra-soft policy and keeping rates at an extremely low level. The scenario assuming further growth of monetary divergence acted as a powerful impulse for the USD/JPY pair. In just a couple of hours, the dollar soared against the yen by more than 0.5%. The last jump of the greenback led the USD/JPY asset to another record. Since January, the greenback has strengthened against its Japanese counterpart by 25%. There has not been such an annual growth in the entire history of observations. However, the Japanese government did not put up with this and pulled the trigger. The currency intervention changed the whole picture overnight. Dramatic U-turn Japan's intervention cannot be called a "black swan". Many analysts prepared traders for this ahead of time and even named a specific moment when an intervention might occur. The 145 level really turned out to be the red line. As predicted, Japanese politicians did not allow the yen to fall below this mark. Japan's first market intervention since 1998, aimed at raising the rate of the JPY, stopped the rapid decline of the currency. Immediately after the intervention, the dollar-yen pair plummeted by more than 500 points, or 2.6%. Yesterday's low was the 140.35 mark. This morning, the Japanese yen is trading around 142 and is on track for its first weekly gain in more than a month. However, many analysts believe that it will not be easy for the Japanese currency to gain a foothold at current levels now, when the negative fundamental background prevails. To keep the JPY rate below 145, the Japanese government will most likely have to conduct more than one intervention. The risk that the authorities may intervene again is quite high. As the second largest foreign exchange reserve in the world, the BOJ has sufficient reserves to continue supporting the yen. At the end of August, Japan's reserves exceeded $1.17 trillion, while the average daily trading volume of the national currency in Tokyo was about $479 billion. According to economists, this reserve is large enough for the BOJ to strengthen the yen until the end of the Fed's policy tightening cycle, which should come by mid-2023. Put aside the panic Of course, the significant foreign exchange reserve that Japan can use to support the yen scares traders who are playing bullish in the USD/JPY pair. However, most analysts believe that there is no reason to panic. Even a series of interventions will not be able to change the downward trend in the Japanese currency. For the steady growth of the JPY, first of all, positive fundamental factors are needed, and there are none. The main obstacle on the yen's way up is the growing divergence in the monetary policy of the BOJ and the US central bank. The Japanese currency will remain under strong pressure until the BOJ retreats from its dovish position or the Fed begins to wind down the tightening of the monetary policy. The growing monetary divergence will eventually outweigh any intervention, Rabobank analysts are certain. Despite the risk of further interventions, they maintain their medium-term forecast for the USD/JPY pair at the level of 147. And many colleagues agree with them. According to analysts, purchases of the yen by the BOJ will be perceived by the dollar-yen asset as mosquito bites: it will be a bit of a shame, but it will pass quite quickly.   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322513

The Japanese government has decided to intervene with currency intervention in the Japanese yen market after the USD/JPY exchange rate approached the 146.00 level following an earlier Fed decision. The Japanese currency had been losing steadily since the beginning of the year with the divergence in the actions of the US and Japanese central banks. Bank's Of Japan Intervention The Japanese government and the Bank of Japan (BoJ) intervened on Thursday in the foreign exchange market for the first time since 1998, when the U.S. dollar reached a 24-year peak against the yen. Japanese Deputy Finance Minister for International Affairs Masato Kanda confirmed that the government responded by selling dollars against yen. Kanda added that "markets are making very volatile moves" and that Japan "cannot tolerate excessive volatility and disorderly currency movements." Earlier in the day, the BoJ decided to leave its interest rate unchanged and continue its loose monetary policy, BBN reported. Source: Conotoxia MT5, USD/JPY, H1 How lasting could the effects of intervention on the JPY be? For the time being, investors may be wondering how lasting the effects of Japan's, for the time being, one-time intervention in the currency market may be. The drop from around JPY 146.00 to JPY 140.50 may undoubtedly be impressive, but will it be able to halt USD appreciation, which may be driven by growing expectations of rate hikes in the US? Read next: Jim Cramer Comments On Inflation, IMF (International Monetary Funds) Talks Stablecoins | FXMAG.COM According to analysts quoted by Bloomberg, the Japanese yen could rebound to 130-135 per dollar if the authorities push ahead with more interventions in the foreign exchange market. The scale of intervention was still small relative to total foreign exchange reserves, so there is still some ammunition to defend the currency." - Saktiandi Supaat, regional head of foreign exchange market research, told Bloomberg TV. He notes that USD/JPY could head toward JPY130 or JPY135 if authorities push harder for further intervention. However, the baseline scenario assumes support for the dollar through the end of the year and perhaps into the first quarter of 2023. The dollar could weaken in the event of any signs of a Fed slowdown or positive developments around Russia/Ukraine, which could lead to a reduction in risk-off sentiment, the Bloomberg interview added. USD/JPY technical situation From the point of view of the USD/JPY exchange rate chart, we can see that the quotes are still inside a potential expanding wedge formation. In addition, the potential resistance level and the contractual limit for currency interventions at JPY 145.00 may also have been defended. The short-term line drawn after the lows was also broken. As a result, the rate could start consolidating in the range of JPY 145.00 to 141.50. Further potential support could fall in the area of previous peaks at JPY 139.00, and then at the lower boundary in the wedge. Source: Conotoxia MT5, USD/JPY, D1 Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

In the face of Friday's growth of the dollar index by 1.56%, the USD/JPY pair added 0.68% (100 points). We do not think that the Bank of Japan will stop protecting the 145 level after the first intervention on the 22nd, so we expect a slowdown in the fall of European currencies and a reversal in the USD/JPY pair to the nearest support at 141.25, determined by the embedded price channel line of the higher timeframe. The MACD indicator line approaches this line, strengthening it. The Marlin Oscillator on the daily chart is declining in its own narrow channel. The price lacks its support for the development of a downward movement. Such support will appear when the signal line of the oscillator goes into the negative area. The price went above the MACD line on the four-hour chart, above the balance line, and the Marlin Oscillator moved into the area of positive values. Formally, this is a continuation of short-term growth. Let's see how short-term this growth will be. After consolidating under the MACD line (143.55), we are waiting for a new wave of decline in the currency pair. Aim for 141.25.   Relevance up to 04:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322594

The dollar burst on horseback in the new working week, and the USD/JPY pair regained strength. The asset jumped by more than 0.3% at the beginning of Monday and broke through the resistance at 144. The dollar broke loose Recall that last week the dollar-yen pair tickled the nerves of traders more than once, getting into a zone of increased turbulence. First, on the increased monetary divergence between the US and Japan, the asset managed to reach a new 24-year high at 145. And then, as a result of the currency intervention carried out by Japan in support of its national currency, the quote sharply collapsed from this peak by more than 500 points. The intervention of the Japanese authorities helped JPY to complete the last seven days in a slight positive. This was the first weekly growth of the yen in a month. However, as analysts predicted, the effect of unilateral intervention was short-lived. The USD/JPY pair started the new working week with a steady growth. During the Asian session, the Japanese currency fell again against its US counterpart below the 144 mark. The pressure on the JPY was exerted by a large-scale rally of the dollar. On Monday morning, the greenback reached another high against the euro and the pound. Thus, the euro fell against the dollar by 0.4%, to $0.9654, as the Democrats lost to the far-right party in the parliamentary elections in Italy. Such an outcome opens the way to the political restructuring of the EU. Meanwhile, the British pound fell in price against the dollar by 2.8%, to a record low of $1.0555. Fears of an even greater increase in inflation if the government implements a plan to reduce taxes contributed to the pound's fall. At the time of release, the dollar strengthened on almost all fronts, as a result of which the DXY index soared by more than 0.5%, to a new 20-year peak at 114.58. Why is the demand for USD growing? The strong jump in the US currency was caused by an increase in anti-risk sentiment and an increase in the yield of 10-year US Treasury bonds. World stock markets are falling now for two main reasons. The first is another escalation of the conflict between Russia and the West. This time, relations have worsened amid referendums held by the Kremlin in the Luhansk and Donetsk People's Republics, as well as in the Kherson and Zaporozhye regions of Ukraine. Moscow has promised to take these regions under full protection if they become part of Russia. Western politicians regarded this as a direct threat of the use of nuclear weapons. Also, the growth of fears about the global recession contributes to a decrease in risk appetite. The wave of rate hikes observed last week significantly worsened forecasts for global economic growth. As major central banks continue to raise rates, their economies are noticeably weaker. The only exception is the US. Despite the fact that the Fed is at the forefront of tightening monetary policy, the American economy is still firmly on its feet. This is evidenced by the latest US macro data published on Friday. A report from S&P Global showed that in September, the index of business activity in the manufacturing sector of America rose from 51.5 to 51.8, while its counterpart in the service sector recovered from 44.6 to 49.3. Positive statistics helped to strengthen expectations of a more aggressive Fed policy, especially since at the end of the week, officials of the US central bank intensified their hawkish rhetoric. On Friday, Fed Chairman Jerome Powell said that the central bank is determined to continue actively fighting inflation. The comments of Fed Vice Chairman Lael Brainard and Atlanta Fed President Rafael Bostic were in the same spirit. Hawkish speeches by politicians helped to disperse the yield of 10-year US Treasury bonds to 3.74%, which inspired the dollar to a new record. You can't envy the yen The aggressive position of the US central bank in relation to interest rates is what is now drowning the Japanese currency. Despite the recently thrown lifeline in the form of intervention, the yen is increasingly sinking to the bottom and risks approaching the red line again – the 145 mark. An additional ballast that does not allow the JPY to go up is the news about the next dovish actions of the Bank of Japan. On Monday morning, it became known that the BOJ again decided to increase the volume of bond purchases, as the benchmark yield of 10-year Japanese bonds jumped to the upper limit of the acceptable trading range of the central bank. Also, strong pressure on the JPY was exerted by the statement of the former chief currency diplomat of Japan, Naoyuki Shinohara. In an interview with Reuters, the official said that the government is unlikely to go for another large-scale intervention, so as not to draw fire from other G7 participants. – The most that the authorities can do now is to try to smooth out the volatility in the foreign exchange market with small purchases of the yen, but this will clearly not be enough to reverse the downward trend, – he stressed. Nevertheless, traders playing bullish for the USD/JPY pair should be on their guard. Some analysts do not rule out that the Japanese authorities may again intervene, which will cause a short-term rebound of the quote. This is evidenced by today's comments by Japanese Finance Minister Shunichi Suzuki. On Monday morning, the politician issued another warning: "We are deeply concerned about the recent rapid decline of the yen, partly caused by speculative trading, and our position of readiness to respond to such steps as necessary has not changed," he said. The increased risk of intervention may become a minor obstacle for bulls on the dollar-yen pair in the short term. However, most analysts believe that this week the asset will still move mainly in the upward direction. In the coming days, the dollar may receive several more powerful impulses for growth, as a number of speeches by Fed representatives are expected throughout the week. According to experts, American politicians will continue to bend the hawkish line, which will further add fuel to the fire of monetary divergence between the United States and Japan. This will favor the dollar's growth, as a result of which the USD/JPY pair can demonstrate another record.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322630

We had a bearish start to the week on Monday and the price action across several asset classes remains volatile and chaotic - and that’s especially true for the FX markets shaken by the freefall in sterling. FX Market The US dollar remains king, on the back of a heavy sterling meltdown due to irresponsible UK government / lazy Bank of England (BoE), and euro selloff on the back of Italy turning right / cautious European Central Bank. The USDJPY spiked at yesterday’s dollar rally, as if the Bank of Japan (BoJ) never intervened last week. The BoJ head says that he supports intervention in the yen. In vain. Stock Martet  Equities selloff, as investors expect a deeper downside move due to pressured earnings. Tech stocks remain on the chopping block. To reverse sentiment, Amazon throws the second Prime Day sale this year, and Apple hurries out of China. While outlook for equities remains bearish, the rising yields make sovereign markets increasingly appetizing, and an eventual inflows in global sovereign markets could be the first sign of healing from the actual financial crisis. Watch the full episode to find out more! 0:00 Intro 0:27 Bailey is clearly not a good 'adult' in the room… 4:26 Where is the money, and where could it go next? 5:53 Stock mood update 8:20 FX talk Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #GBP #EUR #selloff #UK #mini #budget #USD #rally #Apple #Amazon #Google #Netflix #UK #gilt #sovereign #bonds #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH

Pound tumbled to a record low on Monday due to concerns over the stability of the UK's financial position. It followed a strong decline last Friday, which occurred because of the widespread demand for the dollar in the context of the global crisis and geopolitical tensions, as well as the new UK Treasury Chief Kwasi Kwarteng's announcement that the government will implement the biggest tax cut in 50 years while increasing government borrowing and spending despite high inflation. The measures have raised expectations that the Bank of England may go for an emergency increase in the discount rate to strengthen market confidence and the national currency. In addition to the problems mentioned above, the UK is facing weak economic statistics. Business activity in the manufacturing sector reportedly fell below 50 points, which is bad for the economy. If the situation does not change, the pound will fall to parity with the dollar. Perhaps, there may be a local rebound in GBP/USD, but the main trend will be downward until the Bank of England decides on a sharp increase in rates. Forecasts for today: USD/CAD The pair is trading below the support level of 1.3675. A decrease in negative sentiment, local rebound in stock indices and strong rise in oil prices may prompt a further fall to 1.3575. USD/JPY The pair faced resistance at 144.80. But if market sentiment improves, it will bounce back to 143.15.   Relevance up to 08:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322744

Summary:  Havoc has spread to the markets, not just with the Fed staying the hawkish course, but with the collapse in confidence in the UK economy after a fiscal policy and lack of monetary policy response adding into the mix with a massive bond selloff. Meanwhile, the surge in the US dollar continued taking its toll on several currencies, and the effect of Japan’s intervention from last week has also faded. Earnings pressure may be the next shoe to drop, and recession concerns also still need to be priced in more broadly. Fed’s high-for-longer message is now being taken seriously The September FOMC meeting was not precisely a pivot point for the Fed, but more so for the markets which finally understood the Fed’s message on inflation. The dot plot, particularly, conveyed two key messages as listed below. Even though the accuracy of the dot plot remains in doubt, given a very weak correlation with what actually transpired previously, it is a great signalling tool to understand the intentions of the FOMC members. Terminal rate is seen at ~4.6%, which was above what Fed funds futures were pricing in before the meeting. Even slower growth and higher unemployment levels, as conveyed by the Fed’s projections, would not deter the central bank from hiking rates There was some pushback on premature easing, with the dot plot showing a 4.5-5.0% rate even at the end of December 2023. Alongside that commitment to tighten, the Fed is now at the full pace of its quantitative tightening program, which is sucking liquidity out of financial markets at a rapid pace. The aim is to shrink the Fed’s balance sheet by $95bn a month — double the August pace. While quantitative tightening strongly influences liquidity conditions and asset markets, it is less useful in directly impacting inflation. While systemic risks from QT may remain contained, it ramps up the rise in Treasury yields as the Fed’s balance sheet shrinks and the amount of Treasuries in private hands increases. Trussonomics pushing UK to an emerging market status Sterling has fallen close to 10% on a trade-weighted basis in a little under two months, and has surpassed the Japanese yen to be the weakest against the US dollar year-to-date. An immediate response from the Bank of England may have saved some face, but remember that last week’s BOE decision was a pretty split vote as well with two members voting for 75bps rate hike and one calling for a smaller 25bps rate hike as well. So, it remains hard to expect a prudent policy response from the BOE, and a parity for GBPUSD in that case may not prove to be the floor. UK’s net forex reserves of $100bn are also enough to only cover two months of imports, or roughly equal to 3% of GDP as compared to Japan’s 20% and Switzerland’s 115%. But it’s not just about the sterling crisis in the UK, but more generally a crisis of confidence. Not to forget, inflation forecasts for end of the year are already at 10%+ levels and the market is now pricing in over 200bps of rate hikes by the end of the year, with two meetings left. The central bank will need to deliver this massive tightening simply to keep the sterling where it currently is and that won’t reverse the impact of the government’s decisions on UK markets. The scale and speed of the hikes could also do significant damage to the economy. The iShares MSCI United Kingdom ETF (EWU:arcx) traded lower by another 1.8% on Monday and is now down 7.3% over the last one week. Bank of Japan’s patience will keep getting tested We wrote earlier about what will need to change to call it a top in the US dollar, and nothing seems to be in order yet except some of the non-US officials starting to get concerned about currency weakness. Still, the intervention from Bank of Japan didn’t have long lasting effects on USDJPY, even as it helped to strengthen the yen against some of the other currencies such as the EUR, GBP or AUD. It may have also helped to stop some speculative shorts. But a coordinated intervention in the yen still remains a far cry, with the weakness in the Japanese yen being BoJ's own-doing due to the yield curve control policy. Japanese government bonds will likely continue to test the patience of Bank of Japan with its yield curve control policy. Downside for Japanese government bonds (JGB1c1) will potentially spike exponentially if the BOJ pivots at some point. Earnings pressure may be next While the Q2 earnings season proved to be more resilient than expectations, intensifying inflation concerns have turned corporates more cautious on the outlook and less optimistic for the near-term earnings performances. We have seen some downward revision of EPS estimates for the third quarter in July and August, and we still cannot rule out further grim outlook and margin pressures. Estimates for S&P 500 earnings in 2022 stood at $226.15 per share as of August 31, according to FactSet. This is down 1.5% from the $229.60 per share estimate as of June 30. For 2023, analysts now expect EPS of $243.68, down 2.8% from the June estimate of $250.61. So far, companies dealt with rising inflation by passing on increased costs to consumers, given the pandemic-era fiscal support measures underpinned strength in the consumer side. These increased pass-through was also visible in higher CPI prints. But with the economic outlook getting duller by the day, there is bound to be some pushback from the consumers and that will likely show up in the earnings report card. From a sectoral perspective, tech stocks will likely be battered as tight corporate budgets weigh and the US 10-year yields are in close sights of 4%. Semiconductors, a barometer of global economic health, could also face further pressure. Meanwhile, the oil and gas sector was the saviour of the Q2 earnings season, but would also likely see some pressure in Q3, unless the outlook starts to look slightly more upbeat with improving capex plans. Dollar pivot is the next key catalyst to watch The majority of the market downfall we have seen so far has come from a rapid shift in cost of capital and correcting peak valuation. The next leg, as discussed above could be the earnings recession. Still, economic recession risks remain and history suggests that the market lows do not come until after the recession begins (see chart below). Still, with the US 10-year yields approaching 4% - which maybe a likely ceiling – the focus turns to a reversal in the US dollar as the next pivot, not the Fed. Testing those key levels could mean a short-term bounce in equities which may be favourable for building new short positions as the trend still remains down. Alternatively, for investors, it would rather be optimal to look for signs of selling exhaustion to accumulate long positions, such as VIX above 40. Historically, a decline in stocks of the order of 20% makes it buying stocks after they have been down 20% from record highs has been a good risk/reward proposition for longer-term investors.     Source: https://www.home.saxo/content/articles/macro/macro-insights-approaching-a-breaking-point-but-not-without-more-pain-first-27092022

USD/JPY: The chart shows the movement of #USD/JPY in the hourly (H1) chart. Comparing the recent price movement to that of September 20 and 22's, it can be seen clearly that the key support level is £144.09, while the dynamic resistance levels are the two sloping lines converging on September 29's high, that is, £144.92. Based on this, it is likely that a breakdown of the support level of £144.09 will lead to a drop towards £141.60, while a test and breakdown of £144.92 will result in a rise to £145.81. Either way, trading in the short-term is very risky, so be careful when entering and exiting the market. Good luck!   Relevance up to 10:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322770

Summary:  The Bank of England’s response to the downdraft in sterling since late last week was rather lacking, as the bank merely indicated it will address the situation at the next regularly scheduled meeting. They may not have that luxury unless this brightening of global risk sentiment that has materialized overnight has legs. Elsewhere, traders continue to steer clear of challenging Japan’s Ministry of Finance on intervention despite a fresh surge in US treasury yields yesterday. FX Trading focus: Bank of England response to sterling crisis rather muted, but a broad sentiment shift might keep them off the hook near term. The Bank of England’s response yesterday to the enormous downdraft in sterling was not as dramatic as those looking for a kneejerk hike this week might have expected. The Bank issued a short statement, which merely indicated that it is aware of what the government is doing and will take that and sterling’s moves into consideration at the next regularly scheduled meeting on November 3. Perhaps the phrase that it “will not hesitate to change interest rates by as much as needed to return inflation to the 2% target” that saved sterling from a further pounding just yet. There are two ways to look at this: the BoE doesn’t want to be seen as panicking and jerked around by market developments. On the other hand, it would have been more hawkish to avoid mention of the next regularly scheduled meeting to suggest that we might infer a rate hike is possible at any time if the sterling volatility worsens again. In support of sterling, the overall rate expectation for the November 3 meeting remains pinned just below 150 basis points this morning, a very large rate hike indeed when your policy rate is 2.25%. We may not have seen the cycle low in sterling, but in the nearest term, a rally in risk sentiment can keep sterling in consolidation mode tactically after the trauma of the last couple of sessions. Chart: USDCADRemarkable to see USDCAD extending the rally yesterday at an even more rapid pace than the one established over the last couple of weeks, the kind of price action one often associates with at least a temporary climax in the trend. A fresh sell-off in oil prices added to the pressure on CAD and NOK as well. But that trend has extended so far and so quickly that the USDCAD pair can easily retrace to 1.3500 without meaningfully softening the up-surge, and today’s price action suggesting we may avoid a correction even to that level. Since the early 2000’s, USDCAD has only traded above yesterday’s 1.3800+ highs on two occasions – for a couple of months when oil collapsed during the pandemic outbreak in the spring of 2020 and during a short episode during the USD peak of late 2015/early 2016. The coming recession may prove more vicious in Canada relative to the US, given very elevated private debt levels in Canada, much of it associated with housing. Mortgage financing is generally 25 year mortgages that roll every 5 years. That 5-year mortgage rate has risen to levels similar to the US 30-year rate around/above 6%. In the US, the vast majority of mortgages are 30-year fixed, meaning no real impact for most homeowners who are staying put with existing mortgages, but a far faster and greater impact on Canadian mortgage holders who must roll to the new and suddenly vastly higher rates. As discussed in this morning’s Saxo Market Call podcast, it will be very interesting to watch the evolution in the US Consumer Confidence survey of the spread between the Present Situation and Expectations components, which reached their lowest levels since 2001 in July. The latest September survey is up today. Typically this spread bottoms out and is rising quickly as the US economy is tilting into recession. As this survey is historically closely correlated with the labor market, any rise in the spread would likely be preceded by a couple of months of clearly rising jobless claims. On that front, we hit record lows in claims (adj. for population) back in March, followed by a significant surge into July. Since then, the lower claims suggest a still-strong labor market, but another turn and rise above a 250k weekly run puts us on a countdown toward a recession and peak Fed tightening expectations. We are likely at an inflection point in Q4 as the real wear on the economy from policy tightening is picking up pace, given the 9-12 month lag of policy, which may be more compressed this time given the vicious pace of the tightening once it got underway. It’s remarkable to recall that the Fed only achieved lift-off from effective zero in March, with treasury yields beginning to surge, however, already in late 2021 and accelerating higher in January. Table: FX Board of G10 and CNH trend evolution and strength.Nothing much new here, but the readings are extreme in USD strength and GBP weakness, while development around the edges are interesting, including whether the broad JPY bounceback can hold and the degree of relative weakness in CNH as the key 7.20 level approaches in USDCNH and the jockeying amongst the G-10 smalls. Table: FX Board Trend Scoreboard for individual pairs.NOKSEK is pressing on a major level at 1.0500 as cratering oil prices and crazy messaging from the Norges Bank have NOK under pressure – crazy volatility in today’s session, by the way. Elsewhere, note the pump and reversal in AUDNZD – was that at least a temporary top for now there? Upcoming Economic Calendar Highlights 1100 – UK Bank of England Chief Economist Pill to speak 1100 – ECB's Villeroy to speak 1130 – Fed Chair Powell to speak on digital currencies 1230 – US Aug. Preliminary Durable Goods Orders  1300 – US Jul. S&P CoreLogic Home Prices 1355 – US Fed’s Bullard (voter 2022) to speak 1400 – US Sep. Consumer Confidence 1400 – US Aug. New Home Sales 1700 – US 5-year Treasury Auction 1700 – US Fed’s Kashkari (voter 2023) to speak 2350 – Japan Bank of Japan meeting minutes 0130 – Australia Aug. Retail Sales    Source: https://www.home.saxo/content/articles/forex/fx-update-boe-response-rather-muted-but-big-hikes-still-baked-in-27092022

Bank Of England "Ready To Act" Stock markets have steadied in Asia and early European trade on Tuesday but that is not reflective of the mood in the markets at the moment so it may struggle to hold. The volatility in FX markets at the start of the week has been extreme but it’s also been building for weeks as authorities desperately try to arrest the decline in their currencies, particularly against the US dollar. On Monday it was the UK that was front and centre following the mini-budget on Friday that showed total disregard for the environment in which it was being implemented. Promising much higher borrowing to fund huge tax cuts at a time of double-digit inflation that hasn’t even peaked is beyond bold and the backlash is well underway. There’s nothing wrong with being ambitious on the economy but timing is everything and when the cost is much higher interest rates, there won’t be many winners and the economy simply won’t see the benefit. The question now is whether the pressure both externally and from within will force a rethink in order to settle things down. Read next: The Weakening Real Estate Market In The USA And More Speeches| FXMAG.COM The Bank of England did little to help. After speculation all day of an impending announcement, the central bank only sought to reassure markets that they stand ready to act but probably not until the next meeting in early November when it is armed with new macroeconomic projections. Needless to say, that reassured no one and sterling plummeted again after recovering amid the rumours of the announcement. BoJ intervenes amid rising yields It’s not just the UK that’s contending with a haemorrhaging currency, the Japanese Ministry of Finance was forced to intervene last week for the first time in 24 years in order to support the yen. Of course, while the UK’s problems appear largely self-inflicted, Japan is suffering as a result of a growing rate divergence that is worsening month to month. So much so that the Bank of Japan was forced to intervene itself overnight with another bond-buying operation to the tune of 250 billion yen. The problem with yield curve control is that when yields are rising everywhere, pulling those in Japan with them, the upper limit is frequently tested necessitating intervention which in turn weakens the currency. It seems Japan is now stuck in an intervention doom loop until central banks elsewhere see peak inflation and therefore rates, or the BoJ loosens its grip and allows yields to move a little higher. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. More turmoil to come? - MarketPulseMarketPulse

The yen's situation is unfolding in such a way that the Bank of Japan's intervention on September 22 to protect the level of 145.00 may turn out to be in vain. The price has already approached the resistance of 145.05, consolidating above which opens the 147.30 target – an embedded line of the global price channel. The Marlin Oscillator is still kept in the positive area. Obviously, the BOJ is not able to withstand the global strengthening of the dollar, although the yen has been staying at current levels for three weeks now. So, if there is no repeated intervention of the central bank close in volume to the last action (which is more likely), the pair will grow to 147.30. Support in the current situation is the embedded line of the price channel and the MACD indicator line approaching near the 141.28 mark. On the four-hour chart, the price is consolidating under the linear resistance of 145.05. Consolidation above the level will be the first sign of the price's determination to go to 147.30. The Marlin Oscillator is stable in the positive area, it managed to consolidate, probably for a breakthrough upwards.   Relevance up to 04:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322844

Summary:  Market sentiment tipped sharply lower late yesterday after an earlier rally attempt in the US session on the news of sabotage of the Nord Stream pipelines in the Baltic sea. Elsewhere, the US 10-year treasury benchmark rose again and is pushing on the major 4.00% level, taking the USD higher and pressuring global liquidity. Adding further to weak sentiment overnight, the Chinese yuan slipped sharply lower as USDCNH broke above its longer term range highs of 7.20 established back in 2019 and 2020.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities jumped higher out of the gates in early trading yesterday, but the action faded all day and the market closed back near the key cycle support, with the S&P 500 index even posting a minor new bear market low intraday below the prior 3637 mark on the cash index, as the news of the Nord Stream pipeline sabotage (see below) weighed, and US yields and the US dollar continued their ascent. Pivotal levels here for equities as we await further developments and consider end-of-quarter flows into Friday. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Stocks traded in the Hong Kong bourse notably underperformed those in Shanghai and Shenzhen. Shares of public utilities fell from 3% to 5%.  U.K. headquartered HSBC (00005:xhkg) and Standard Chartered (02888:xhkg) continued their slide, falling 3% to 4% for the day and 9% to 11% since last Friday’s post-mini-budget turmoil in the Pound Sterling and U.K. Gilts.  Both Hong Kong and China developers plunged across the board,  mostly by 1% to 5%, with CIFI (00884:xhkg) falling over 27% and being the largest casualty in the property space.  CIFI, the 13th largest property developer in mainland China was said to have missed a payment on a project-related debt.  CSI300 fell 1%, dragged by ferrous metal, electric equipment and defence industries while banks, textiles, food and beverage stocks outperformed. Strong USD continues to rage. We have witnessed an historic move in the USD this month, with month-end and quarter-end drawing into view on Friday. Besides the massive, more than 8% meltdown in GBPUSD this month (trading sub-1.0700 this morning), a pair like AUDUSD has lost over 6.5% as of this morning’s exchange rate. The question soon has to be: when does this strong USD finally “break something” and bring an official response, whether coordinated or unilaterally from the Fed or the US Treasury? So far, there seems no sense of emergency, judging from comments yesterday by US National Economic Council director Brian Deese, who pushed back against the idea that the a Plaza Accord-like deal is under consideration. USDCNH reaches all-time highs, intensifying strong USD story. The strong US dollar finally took USDCNH above the 7.20 area that defined major tops on two prior occasions in 2019 and 2020. The exchange rate traded as high as 7.239 overnight, the highest in the history of the offshore CNH currency. USDCNY has not traded this high since early 2008. The move comes ahead of a major holiday next week in China, with markets closed for the entire week, which will leave markets in limbo next week as USDCNY won’t trade. Gold (XAUUSD) remain under pressure from the stronger US dollar and rising US treasury yields, perhaps showing resilience at the margin given that the precious metal failed to post new lows for the cycle yesterday or today even as the USD surges to new highs elsewhere. The next focus is perhaps the round 1,600 level if the selling continues. Crude oil (CLU2 & LCOV2) recovers, European natural gas surges. Crude oil shifted focus back on supply worries with curbs in the U.S. Gulf of Mexico ahead of Hurricane Ian and with reports that Russia is pushing for the OPEC+ alliance to cut production. The group of oil producing nations is due to meet early next month to discuss its production plans. They already announced a cut to output for October by 100kb/d and have warned of further reductions amid falling prices. There has been reports that Russia is pushing for a cut to output of at least 1mb/d. Meanwhile, a pause in USD rally also helped to put a floor to the declines in commodity prices. WTI futures rose but still remained below $80/barrel while Brent futures were above $86. US treasuries (TLT, IEF) US treasury yields rose once again after a brief and relatively sharp stumble yesterday, taking the 10-year yield to the symbolic 4.00% yield. It is worth noting that large round numbers on the yield often provide sticking points – for example, the 3.50% defined the top in June. Is this an important cycle top in yields or can they continue to power higher. The 4.00% level was also the stop for much of late 2008 and 2009. Yesterday saw a weak 5-year treasury auction despite the high yields. What is going on? Nord Stream pipelines severed, presumably an act of sabotage. Enormous upwellings of gas in the Baltic along the Nord Stream 1 and Nord Stream 2 pipelines in the Baltic Sea and detection of seismic activity that resembled explosions rather than earthquakes suggest that the pipelines were sabotaged to prevent the delivery of gas to Germany from Russia. The Nord Stream 2 pipeline was never operational, and the Nord Stream 1 deliveries had recently ceased. EU commissioner joined others in pointing the finger at Russia for the action, promising “the strongest possible response” if it is confirmed that Russia is behind the action. The development saw European natural gas jumping more than 22%, with Gazprom also issuing sanction warnings for Ukraine’s Naftogaz, which would prevent it from being able to pay transit fees, and therefore put at risk whatever little gas is still flowing to Europe via Ukraine. Fed officials continue with a united hawkish voice. While inflation and higher-for-longer interest rates remain a key theme in all Fed commentary these days, there is also another common theme emerging. All three officials on the wires yesterday – Kashkari, Bullard and Evans – suggested that the US may avoid a recession. Kashkari (2023 voter), in an interview with WSJ, said he’s unsure if the policy is tight enough suggesting more rate hikes will be needed to bring down inflation. Bullard (2022 voter) said the US has a serious inflation problem and the credibility of the inflation targeting regime is at risk. Evans (non-voter) is optimistic the terminal rate the Fed has set out (4.6% median in Dot Plot) will be restrictive enough. France releases ‘rosy’ economic forecasts for 2023. Yesterday, the French government published its economic forecast for 2022-23 as part of the parliamentary debate on the 2023 debate. The forecasts are overly optimistic. The Ministry of Finance expects that household investment (which mainly consists of the purchase and renovation of dwellings) will increase by 0.6 point over 2022-23 despite a jump of 250 basis points in the 10-year government bond yield and falling (or at best stagnant) purchasing power. We are a bit skeptical. We think that a sharp decrease in real estate prices is one of the less mentioned risks in France for 2023. This will be something to monitor very closely. It could seriously deepen the expected recession. USDJPY testing 145, but yen crosses lower. Bank of Japan released the meeting minutes from the July meeting, understandably stale, but continuing to signal that easing intentions remain prevalent. Despite a further run higher in US Treasury yields with the 10-year touching the 4% mark, USDJPY has still remained capped below 145. More importantly, the yen is stronger against the EUR, GBP and AUD since the intervention on 22 September, and the contrast with the struggling CNH is particularly notable. The World Bank downgraded its growth forecasts for China while upgrading the growth of Vietnam. The World Bank published its latest economic forecasts on Tuesday, cutting the 2022 growth rate of China to 2.8% from its previous forecast of 5%, and the 2023 growth rate to 4.5% from 4.8%.  On the other hand, the supra-national bank raised Vietnam’s growth rate in 2022 to 7.2% from the 5.3% forecast released in April. It also raised the 2022 growth forecasts for the Philippines to 6.5% from 5.7% and Malaysia to 6.4% from 5.5%. Excluding China, the East Asia, Pacific region is forecasted to grow 5.3% in 2022 and 6.0% in 2023, which will be, for the first time over the past three decades, higher than the growth rates in China. BHP takes advantage of sterling slump and redeems notes more than half a century early. Despite the iron ore (SCOA) price falling 1.4%, to its equal lowest level this year (US$95.90), BHP shares in Australia rallied to a three-day high after the mining giant paid off debts earlier than expected. BHP took advantage of the slump in the sterling against the USD, and used its record profits to redeem pound-denominated notes (due in 2077). This resulted in BHP effectively paying down $643 million of notes early. Last month BHP reported net debt of just $333 million. BHP also announced mining expansion plans. From exploring options to mine copper at Cerro Colorado beyond 2023, with Chilean regulation easing, to also seeing huge commodity upside in Peru, and spending $12m on exploration there over 10 months. Meanwhile, BHP also affirmed it’s working toward bringing forward production for its new potash (fertilizer) business to 2026. BOE Chief Economist Pill also pushed back on inter-meeting rate hike. Huw Pill said the UK’s government’s fiscal announcement and the market reaction that followed it requires a significant monetary policy response, but the best time to assess and react to their impact is at the institution’s next meeting in November. He acknowledged the challenge to the bank’s inflation goal arising from the loose fiscal policy, while also saying that the bank’s program of government bond sales should go ahead as planned next week if the market repricing stays orderly, as has been the case in recent days. However, it is worth noting that BOE’s November 3 meeting is still before the medium-term fiscal strategy is announced, and if that contains significant spending cuts, the budget may prove contractionary, especially given the rise in yields. US consumer confidence beats expectations. Lower petrol prices and a tight labor market possibly aided a rebound in sentiment, but high inflation and interest rates will continue to constrain consumer spending in the fourth quarter. Meanwhile, 1yr consumer inflation expectations declined to 6.8% (prev. 7.0%), but still remaining significantly higher than the Fed’s 2% goal. In other data, US durable goods order fell 0.2% in August, still coming in better than expected while new home sales rose to the strongest pace of sales since March to 685k in August, above the expected 500K and prior 532k (revised up from 511k). What are we watching next? End of quarter rebalancing? We have seen aggressive moves across markets this quarter, to say the least, which brings the question of whether significant rebalancing flows are set for the quarter end this Friday. The relative bond performance has been perhaps worse than that for equities, while in FX the focus may be on possible rebalancing after a tremendous USD upsurge in Q3. Earnings calendar this week The chief action this week is up tomorrow as H&M, Nike, and Micron Technology deliver earnings reports, with the earnings from Micron the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Today: Paychex, Cintas Thursday: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0715 – ECB President Lagarde to speak 0815 – UK BoE Deputy Governor Cunliffe to speak 0830 – ECB’s Holzmann to speak 1230 – US Aug. Pending Home Sales 1230 – US Aug. Advance Goods Trade Balance 1235 – US Fed’s Bostic (non-Voter) to speak 1400 – US Aug. Pending Home Sales 1410 – US Fed’s Bullard (voter 2022) to speak 1415 – US Fed Chair Powell to speak (opening remarks at conference) 1430 – US DoE Weekly Crude Oil and Product Inventories 1500 – US Fed’s Bowman (voter) to speak 1700 – US 7-year Treasury Auction 0000 – New Zealand Sep. ANZ Business Confidence survey   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-28-2022-28092022

Hello, dear colleagues. The main event in September was an increase in the federal funds rate by 0.75%. Commenting on this decision, adopted unanimously, Federal Reserve Chairman Jerome Powell said that the US central bank is ready to continue raising rates until inflation starts to decline and the Committee receives data on the sustainability of the decline in inflation expectations. A few days later it became clear that the decision taken by the Open Market Committee could lead to serious, if not catastrophic, consequences for the entire global financial system and its most important element — the FOREX market. Before discussing the prospects of foreign currencies against the US dollar, let's discuss why a rate hike leads to a rise in the dollar and a decrease in the rates of its competitors? The answer to this question lies in one of the fundamental laws of the foreign exchange market — the Interest Rate Parity Theorem. The essence of the theorem is that assets with the same credit risk will be more attractive in the currency of the state where the rate is higher. In this case, investors will sell the currency with lower rates and buy the currency with higher rates in order to receive a large premium for their investment. Figure 1: The US dollar exchange rate against a basket of foreign currencies The increase in the dollar rate primarily hit currencies with low rates, including, first of all, the euro, the yen and the British pound, and this is the flip side of the US dollar. Moreover, if the yen and the pound have limited influence, then the euro is the second most important reserve currency in the world. The economic problems associated with rising energy prices have further aggravated the situation in the eurozone economy, and the slowness of the European Central Bank has led to the fact that the difference in interest rates has become large enough for a massive outflow of capital from Europe. This has become especially relevant for energy-dependent industries, such as metallurgical companies and aluminum production. At the same time, the situation in the British pound and the Japanese yen is no better than that of the euro, and even worse in some ways. The British pound updated the historical low on September 26. The yen updated the 30-year low a little earlier. There is another circumstance that puts pressure on exchange rates, this is the decline of the US stock market, which adds an additional growth driver to the dollar. Thus, the dollar is at the peak of its power in relation to the currencies of the bloc. The Chinese yuan is also under pressure, although much less than the nearest US satellites. This week, the yuan has updated the low and is now trading at 7.14 yuan per dollar, but the level of 8 yuan per dollar, the low from 2006, is still far away. The depreciation of the yuan is rather a forced measure in response to the decline in the currency of the main competitor in the Asia-Pacific region — the Japanese yen. Further narration requires answering the question of how high the US dollar can grow, and whether it is worth selling it against other currencies now. First of all, it should be noted that the dollar's growth is not over yet, although it has achieved its initial goals. At the same time, it should be remembered that the movement never develops in a straight line, and the dollar has now turned out to be sufficiently overbought to make a correction to its rising trend from a technical point of view, which will give us the opportunity to consider buying it, if, of course, there is a desire and, most importantly, a signal from the trading system. However, in the context of what is happening, a very significant reservation should be made. Even if we assume that the US dollar has reached its high, it will take at least three months to reverse it. Now the ECB and the Bank of England have rushed after the Fed, trying to somehow stop the inflationary spiral. However, it is not so easy to do this, given the pace set by the US Fed, and it takes time. The chronology of events can be presented as follows. The Fed will raise the rate at least once more at its next meeting, which will be held on November 1 and 2, by 0.75% points. Before this event, the ECB will also raise the rate by 0.75% at the end of October, thereby keeping the difference in rates between the euro and the dollar at the current value. Of course, the ECB may surprise and raise the rate by 1% at once, but then we will know about it in advance from the comments of officials, but now such an increase looks unlikely. Based on the logic of this assumption, it is safe to say that at least until the end of October 2022, the euro's exchange rate will not change its direction and may continue to decline. Fig.2: Technical picture of the euro/US dollar exchange rate The technical picture of the EURUSD exchange rate assumes a similar dynamics and now completely coincides with the fundamental calculations (Fig.2). The euro is in a downward trend. At the same time, the exchange rate reached the first target, located at 0.96, which was determined by the width of the previous range of 0.99-1.02, 300 points. It is logical to assume that after achieving the first goal, the course will grow a bit, or, in other words, go into correction. The main postulate of technical analysis is the rule: the movement will continue until we get the opposite. This means that we need to assume that the exchange rate of the euro will decline until the condition of a trend change is met. For the current situation, the condition for a trend change is an increase above the 1.02 level, before that, any increase in the EURUSD rate should be considered as a correction to the current downward trend. Fig.3: Technical picture of the USDJPY course In my subjective opinion, the situation in the Japanese yen is even sadder than with the euro. The Bank of Japan remains the only key central bank that has abandoned the policy of raising rates. This has a rather serious impact on the yen exchange rate, which leads to the fact that the BOJ, under pressure from allies dissatisfied with the devaluation, is even forced to intervene. However, this does not help much and may lead to the fact that the Japanese currency will test the level of 150 and even 155 yen per US dollar (Fig.3). Therefore, if any feeling that you take for intuition suggests that you sell the USDJPY pair here and now, then throw this thought out of your head. It will not lead to anything good. It will be possible to do this no earlier than the pair drops below the 140 level, and even then with great caution and a minimum lot size. With the British pound, everything is somewhat more complicated. The fact is that the BoE began to raise the rate earlier than the ECB began to do it, besides, the maintenance of the national currency rate is written in its charter. Previously, if necessary, the central bank did not disdain to resort to interventions, including not only verbal ones. Therefore, I wouldn't guess the depths at the level of parity of the pound and the dollar, although such a decline looks quite likely. Summing up, it should be noted that the US dollar continues to remain in an upward trend, supported by high interest rates and a decline in stock indices. The S&P 500 index updated the local low on Tuesday, September 27. The previous level was at 3631. If the month, quarter and fiscal year are closed below the 3600 mark, the fate of the US market in the 4th quarter will be very sad. With a high degree of probability, of course. Be careful, cautious and most importantly — follow the rules of money management!   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322832

The dollar is again rushing like a tank in almost all directions. The yen is still on the defensive, but, apparently, the forces are already running out. Most analysts predict victory in this fight for the greenback. USD is tearing up and rushing The greenback showed impressive growth at the start of Wednesday. It jumped 0.5% at the beginning of the Asian session and reached a new 20-year high at 114.70. The key driver for the dollar was a sharp surge in the yield of 10-year US government bonds. Today, the indicator has exceeded 4% for the first time in 12 years. Hawkish comments from Federal Reserve officials contributed to the rapid rise in yields. Yesterday, three American politicians spoke out in favor of a more aggressive rate hike. Moreover, one of them, the president of the Federal Reserve Bank of Chicago, Charles Evans, announced the need to raise interest rates to the range of 4.50-4.75% in order to return inflation to the 2% target. Recall that now the interest rate in the United States is at the level of 3.0-3.25%, and the growth of consumer prices on an annualized basis is 9.1%. Of course, the fact that the Fed has to further strengthen its anti-inflation campaign cannot but please dollar bulls. Today they have become more active on almost all fronts. The greenback showed parabolic growth paired with the New Zealand dollar (+1%), the British pound (+0.9%), the Australian dollar (+0.8%) and the euro (+0.4%). The only hard nut for the greenback was the Japanese yen. The JPY, which has fallen against the USD more than other currencies this year, is holding surprisingly steady on Wednesday morning. At the time of release, the dollar-yen pair was trading at 144.70, which is 0.05% lower than the closing price of the previous day. The fragility of the yen The Japanese currency shows strong resistance against the dollar. However, there are no significant fundamental reasons that would contribute to the yen's growth. Most analysts associate the current strength of the JPY with the immunity received from the Japanese government. Recall that last week, for the first time since 1998, Japan intervened in support of its national currency. The politicians were forced to take such a step by a new sharp collapse of the JPY exchange rate. The yen was sent into free fall by Bank of Japan Governor Haruhiko Kuroda, who announced the continuation of an ultra-soft policy, despite the next rate hike in America. On the dovish decision of the BOJ, the USD/JPY pair broke through the psychologically important level of 145, which turned out to be a red line for the Japanese authorities. According to analysts, Japan will continue to zealously defend this peak and, if it is taken, will again intervene in the market. The risk of intervention is the only saving straw that yen bulls are clinging to now, while there are many more negative factors contributing to the further decline of the JPY. The main pressure on the Japanese currency continues to be exerted by the increasing divergence in the monetary policy of the Fed and the BOJ. Currently, the difference in US and Japanese interest rates is 4%, and everything points to its further growth. Fed officials are actively lobbying for a more aggressive policy, while the BOJ shows no signs of capitulation. The minutes of the BOJ's July meeting were published this morning. According to it, the board members still do not see the need to fight inflation by raising rates, despite the global tightening trend. Many experts believe that the downward trend in the yen will continue until Kuroda retreats from his outsider stance. The technical picture for the USD/JPY pair The 3-week-old descending resistance line around 145.00 is the nearest key obstacle that keeps the USD/JPY pair on its way to a new 24-year high. Bulls for the USD/JPY pair led the price to the level of 145 during the Asian session, but the chances of closing the dollar above this mark are still small. If bulls fail to break above the 145 mark in the short term, there may be a significant risk of a strong downward correction in the coming sessions.   Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/322898

The USD/JPY pair continues to tread in the 144-145 range, in which it has been stuck since the beginning of the week. Consolidation is pretty boring for both bulls and bears, but there is no trigger on the horizon yet. This year, the Japanese currency has fallen in price relative to its American counterpart by more than 20%. The reason for the weakening of the yen was the strong monetary divergence between the US and Japan. Last week, the dollar-yen pair set another high-profile record. After the Federal Reserve raised rates again, and the Bank of Japan left the indicator unchanged, the quote jumped to a new 24-year high at 145.90. The sharp fall of the yen forced the Japanese government to intervene in support of its national currency for the first time since 1998. As a result of the intervention, the USD/JPY pair went into a steep peak. However, the asset did not stay as a loser for long. It only took a couple of days for it to get back on track leading to the main goal for today – level 145. Since the beginning of this week, the dollar-yen pair has already come close to the cherished mark several times, but each time it rolled back. According to analysts, the main deterrent for dollar bulls at the moment is the risk of repeated currency intervention. Given the huge number of warnings from the Japanese authorities, traders still prefer not to get into trouble. However, the situation may change dramatically if a particularly powerful trump card in favor of the dollar appears on the market. You may ask: isn't it here now? Indeed, the dollar received strong support from the Fed last week. The US central bank not only raised rates, but also made it clear that it intends to tighten its monetary policy in the future. This week, American politicians have further intensified hawkish rhetoric, which contributed to the explosive growth of the dollar. The greenback has reached a new 20-year high, showing impressive dynamics in almost all directions, but not paired with the yen. The psychologically important 145 barrier still remains impregnable for the USD/JPY asset. This suggests that the market has already taken into account the further growth of discrepancies in the monetary policy of the Fed and the BOJ. Now traders need specifics: how big the gap in US and Japanese interest rates can become. If in the near future American officials again talk about raising the indicator by 100 bps, perhaps this will be the very impetus for the dollar, which will move it from the dead point. – Of course, the Japanese Ministry of Finance is aware of the current vulnerability of the yen. Probably, the authorities will continue to intimidate traders with interventions to deter speculators, Rabobank analysts warn. – Nevertheless, we are still guided in our 3-month forecast for the USD/JPY pair to the level of 147. As for the short-term dynamics of the asset, do not expect miracles in the coming days. Most experts believe that the dollar-yen pair will remain in the zone of broad consolidation. The technical picture for the USD/JPY 200-day exponential moving average at 141.20 scales higher. This indicates that the long-term trend is still stable. At the same time, the relative strength index (RSI) fluctuates in the range of 40.00-60.00, which indicates that the movement continues within the current range. For a decisive bearish reversal, the asset needs to fall below the previous week's low at around 140.35. Dollar bulls may push the pair higher after overcoming the previous week's high at 145.90. This may lead the quote to the August 1998 high at 147.67. And its breakthrough will send the dollar even further upward – to psychological resistance in the area of 150.00. Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/323012

Stock markets in Europe and North America bounced back on Wednesday, thanks to growing demand for US Treasuries, which put pressure on their yields and dollar. There were no special reasons for growth, but the closing of short positions after a multi-day sell-off helped the markets recover the previous losses. However, the hawkish rhetoric of the Fed pointed to a continued increase in interest rates in the foreseeable future, so stock futures started to decline again today. Minutes ahead of the European trading session, the yield on 10-year bonds grew by 3.15% to 3.824%, while futures fell from 0.36% to 0.70%. This is a strong bearish signal for the equity markets and a significant support factor for dollar. Due out today is Germany's data on consumer inflation and revised US GDP figures for the second quarter. Forecasts say the former will rise to 1.3% m/m and 9.4% y/y, which will prompt the ECB to raise rates again by 0.75%. But this is unlikely to stimulate a strong growth in euro as the currency is affected by the current economic situation in the Eurozone. The latter, meanwhile, is expected to show a slight decrease to -0.6%, but a much larger fall will put pressure on market sentiment, which will increase the sale of stocks and purchases of dollar. Forecasts for today: USD/CAD The pair is currently testing the level of 1.3715. If it rises above it, further growth to 1.3835 is possible, especially amid a decline in crude oil prices and general negative dynamics in the markets. USD/JPY The pair is currently testing the resistance level of 145.00. If it rises above it, further growth to 146.00 is possible, especially amid a general negative dynamics in the markets and resumption of growth in the yield of US Treasuries.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323002

The Japanese yen from across the ocean, and with the support of the Bank of Japan, is watching the ups and downs of Europe and stands still for the fourth day. But standing still on the technical side of things means consolidation, and consolidation is a sign of a subsequent strong movement. We are waiting for such a movement to the target level of 147.30, determined by the line of the price channel of the higher timeframe. The signal to start will be the price exit above the nearest resistance of 145.05. On the four-hour chart, the price is moving sideways between the MACD indicator line (blue moving line) and the linear resistance at 145.05. The Marlin Oscillator is consolidating at the zero line, but still in the positive area. With the price overcoming the level of 145.05, growth to the target of 147.30 will begin, this plan will break the price consolidating under the MACD line, below the level of 143.85. Relevance up to 04:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323078

At the close in the New York Stock Exchange, the Dow Jones fell 1.54%, the S&P 500 fell 2.11% and the NASDAQ Composite fell 2.84%. The leading gainers among the components of the Dow Jones index today were The Travelers Companies Inc, which gained 1.76 points (1.15%) to close at 154.68. Visa Inc Class A rose 0.88 points or 0.49% to close at 180.06. Merck & Company Inc shed 0.14 points or 0.16% to close at 86.64. The losers were Boeing Co shares, which lost 8.11 points or 6.08% to end the session at 125.33. Walgreens Boots Alliance Inc was up 4.97% or 1.65 points to close at 31.55 while Apple Inc was down 4.91% or 7.36 points to end at 142. .48. Among the S&P 500 index components gainers in today's trading were Everest Re Group Ltd, which rose 3.07% to 267.41, STERIS plc, which gained 2.76% to close at 167.29, and also shares of W. R. Berkley Corp, which rose 2.73% to end the session at 65.18. The biggest losers were CarMax Inc, which shed 24.60% to close at 65.16. Shares of SolarEdge Technologies Inc lost 8.27% to end the session at 235.56. Quotes of Royal Caribbean Cruises Ltd decreased in price by 7.91% to 43.64. Leading gainers among the components of the NASDAQ Composite in today's trading were Senti Biosciences Inc, which rose 50.71% to hit 2.11, Avalon Globocare Corp, which gained 25.85% to close at 0.70, and also shares of TuanChe ADR, which rose 25.31% to close the session at 3.07. The biggest losers were Atlis Motor Vehicles Inc, which shed 54.82% to close at 33.95. Shares of Lion Group Holding Ltd lost 49.25% and ended the session at 1.01. Quotes of Twin Vee Powercats Co decreased in price by 29.01% to 2.52. On the New York Stock Exchange, the number of securities that fell in price (2631) exceeded the number of those that closed in positive territory (530), while quotes of 112 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,842 stocks fell, 956 rose, and 224 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 5.50% to 31.84. Gold futures for December delivery lost 0.07%, or 1.20, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 0.55%, or 0.45, to $81.70 a barrel. Futures for Brent crude for December delivery fell 0.55%, or 0.48, to $87.57 a barrel. Meanwhile, in the Forex market, EUR/USD rose 0.70% to hit 0.98, while USD/JPY edged up 0.21% to hit 144.46. Futures on the USD index fell 0.36% to 112.11.  Go to dashboard   Relevance up to 05:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/294915

The yen has been drifting for most of the week and the trend is continuing today. USD/JPY is almost unchanged at 144.32. Japanese data surprises on the upside Japan has released strong industrial production and retail sales data, a further indication that the Japanese economy is improving. Industrial production rose for a third straight month in August, climbing 2.7% MoM. This was up from 0.8% in July and crushing the consensus of 0.2%. Retail sales for August jumped 4.1% YoY, above the consensus of 2.8% and higher than the 2.4% gain in July. Retail sales have posted 10 gains in the past 11 months, indicative of solid consumer spending, despite Japan’s weak economy and households grappling with relatively high inflation. Read next: Differences In Wealth Per Adult, Disney Park Re-Opened And Retirement Theme| FXMAG.COM It was a wild week for most of the majors, but the Japanese yen has settled down after USD/JPY pushed close to the 145 line on Monday. Japan’s stunning currency intervention has kept the yen below the 145 line, but it’s difficult to imagine that unilateral action will succeed in stemming the yen’s prolonged descent, for two reasons. First, the Federal Reserve is likely to deliver large rate increases in October and November. With the Bank of Japan showing no indication that it will ease up on yield curve control, the US/Japan rate differential will widen and send the yen lower. Second, the yen is caught in a tug-of-war between the MoF, which wants to see a stronger yen, and the BoJ, which is focused on maintaining an ultra-accommodative policy, which has kept JGB yields at low levels and weighed on the yen. If the yen does fall below 145, things will get very interesting, as the ball will be squarely in the court of the MoF, which will have to decide whether to balk or step in with another intervention. USD/JPY Technical There is resistance at 144.81 and 146.06 USD/JPY has support at 143.21 and 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen shrugs after solid data - MarketPulseMarketPulse

Technical analysis: USD/JPY has been trading upside in the background and I found the brekaout of the tight balance triangle, which is good sign that market is ready for another upside swing. Trading recommendation: Due to the strong upside condition and the breakout of the contraction to the upside, I see potential for further bigger rally towards upside references. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 145.90, 147 and 147.50. MACD oscillator is showing fresh upside flow, which is good sign for further upside movement. Key support is set at the price of 144.20 Relevance up to 08:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295145

The end of September was a complete disaster for the global markets. Traders hoped that the US Federal Reserve would at least ease the pace of rate hikes. But this never happened. On the contrary, the Fed officials and its chairman reiterated that they see a further rate increase as their priority aimed at slowing down galloping inflation. All hopes were destroyed last month, resulting in the biggest decline in the stock market and the surge in demand for safe-haven assets. Over the past decades, the US dollar has been traditionally viewed as a reliable store of value in times of economic turmoil. The already serious economic crisis is aggravated by high geopolitical tensions which is the main reason why the capital from Europe and other regions goes to the US. Notably, the US has again benefited from military conflicts in other parts of the world just as it happened 80 years ago. The Fed's recent forecast for GDP, inflation, and unemployment as well as its plan to hike rates that were announced at its latest September meeting signaled that the regulator braces for more headwinds next year. This means that the stock market will largely depend on high rates while the US dollar will continue to strengthen despite the process of monetary tightening launched by other global central banks. So, what to expect in the market today and in the week ahead? Most likely, stock markets will still be focused on rate hikes and geopolitical tensions between Russia and the Western coalition led by the US. The broad-based S&P 500 index is expected to decline to the level of 3,000.00 after passing the interim support of 3,300.00. The European and Russian stock markets are likely to follow a similar trajectory. On Forex, we may observe a short-term consolidation phase ahead of the RBA and RBNZ monetary policy meetings this week as well as an important jobs report in the US. Any negative news, especially from the US, will boost the demand for the US dollar. So, after a quick fall, USD may recover again, being a preferred safe-haven asset in these uncertain times. As for today, the weak data on Manufacturing PPI in the US may serve as a signal to buy the US dollar after its short decline in the Asian and European sessions. Daily forecast: GBP/USD The pair is going through a consolidation phase under 1.1225 ahead of the Manufacturing PPI data release in the UK and US. The downbeat data in both countries may stop the pair from a breakout. Instead, it may reverse and move down to 1.0915. USD/JPY The pair is testing the level of 145.00. Consolidation above this range will open the way towards the upper target of 145.90, the recent high formed on September 22.   Relevance up to 09:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323222

USD/JPY has edged higher at the start of the week, trading at 145.10 in the European session. Tokyo Core CPI next Japan’s Tankan indices for Q3 were mixed and the yen had a muted response. Manufacturing dropped to 8, down from 11 in Q1 and missing the consensus of 11 points. Services ticked higher to 14, up from 13 and just above the forecast of 13 points. Later in the day, Japan releases a key inflation gauge, Tokyo Core CPI. The index is expected to rise to 2.8% in August, up from 2.4% in July.   Inflation in Japan has risen to 3%, much lower than other major economies but a huge change after years of deflation. The Bank of Japan has been keeping an eye on inflation, but Governor Kuroda has said he will not change the Bank’s ultra-loose policy until wages rise and it’s clear that inflation is not transient. Sound familiar? Fed Chair Powell and ECB President Lagarde dismissed high inflation as transient but were forced to tighten policy as inflation never let up. The BoJ has been very firm with its yield curve control, keeping JGB yields at low levels. With US Treasury yields moving higher, the US/Japan rate differential has widened, and the yen has fallen sharply. The Ministry of Finance (MOF) stepped in with an intervention in September, after the yen hit 145.90. The dramatic move sent the yen higher, but only for a few days. USD/JPY has been trading close to the 145 line and has pushed just above it today. With the US dollar continuing to rally, it seems likely that the yen will continue to lose ground. It will be interesting to see if the Ministry of Finance intervenes again to prop up the yen. If it does, we can expect some volatility from the Japanese yen. USD/JPY Technical There is resistance at 144.81 and 146.06 USD/JPY has support at 143.21 and 141.88 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen tiptoes at 145 line - MarketPulseMarketPulse

In September, the Japanese government and the Japanese central bank intervened in the forex market with the aim of strengthening the yen. Earlier, the USD/JPY exchange rate had rallied close to the JPY 146 per USD level, reaching its highest level since 1998, which worried the Japanese authorities. This morning, the USD/JPY exchange rate approached the levels again, before the intervention. Government intervention to strengthen the Japanese currency Tonight, Japanese Finance Minister Shunichi Suzuki told reporters in Tokyo that the government remains ready to take the necessary responses to excessive currency movements. He added that he would continue to keep a close eye on forex movements, as stability is important and sudden unilateral movements are not desirable. The difference in interest rates between the U.S. and Japan is not the only factor affecting forex movements, there are various factors behind rate changes, Suzuzki added in quotes published by Bloomberg news agency. Last month's intervention had some impact on speculators, the Japanese finance minister pointed out. Japan spent $19.7 billion on the September currency intervention, Bloomberg reported. Source: Conotoxia MT5, USDJPY, H4 Japan's fight over the yen exchange rate and bond yields A cycle of interest rate hikes is underway in developed economies around the world, but not in Japan. The Japanese want to keep interest rates close to zero at all costs, and still want to control their bond yield curve. Investors, on the other hand, probably want to necessarily get rid of as many Japanese bonds as possible, as long as their prices are jacked up by the central bank. As a result, Japanese government bonds rose today after the central bank increased its planned fourth-quarter debt buying. The Bank of Japan announced Friday it would increase its purchases of bonds with maturities above five years in the fourth quarter 2022, Bloomberg reported. USD/JPY technical analysis Source: Conotoxia MT5, USDJPY, D1   In light of possible currency interventions, i.e. factors typically outside the market, the importance of technical analysis may be less. Nevertheless, looking at the USD/JPY chart, we can see a significant expanding wedge formation, where the market seemed to turn around in the area of its upper limit, as well as a rising wedge formation. In addition, the RSI relative strength indicator has retreated from overbought levels, but may be close to drawing a potential divergence. Short-term support may also come from the 20-session average, above which the market was in an earlier trend. Can changes be expected from the Bank of Japan's action? Many people wonder why the Bank of Japan  is not going to  change its monetary policy, as other central banks around the world have changed it, but  would try to buy time with currency interventions. However, there is no clear answer to this question, for believing the BOJ's announcements, this  seems l not changing  soon. According to National Australia Bank analysts, the December forecast for USD/JPY was raised to JPY145 from JPY133. "We are forced to abandon our earlier view that we will see changes in the way the BOJ's interest rate and yield curve control (YCC) policies work this year," - NAB analysts quoted by Bloomberg wrote. BOJ Governor Kuroda has made it clear that the policy stance of unchanged or lower interest rates will be maintained, probably for another two to three years. Did you know that CFDs allow you to trade on both falling and rising prices? Derivatives allow you to open buy and sell positions and thus trade on rising as well as falling quotes. At Conotoxia, you can choose from CFDs on more than 100 currency pairs. For example, if you want to find a CFD on the USD/JPY, you only need to follow 4 simple steps: To access Trading Universe - a state-of-the-art hub of financial, information, investment and social products and services with a single Smart Account, register here. Click "Platforms" in the "Invest&Forex" section. Choose one of the accounts: demo or live On the MT5 or cTrader platform, search for the CFD currency pair you are looking for and drag it into the chart window. Use one-click trading or open a new order with the right mouse button.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Read more on Conotoxia.com

The USD/JPY pair stayed under the resistance of the nearest price channel line (145.15) for another day. Investors are afraid to buy the dollar, remembering the central bank's intervention on September 22. But short-term growth is still possible, the 147.35 target can be reached, as a result of which a divergence will form with the Marlin Oscillator, and the currency pair will turn into a medium-term decline. The price is moving sideways on the H4 chart, being between the MACD line and the linear resistance of one of the price channel lines (145.15). The Marlin Oscillator in the neutral position is moving along the zero line. Getting the price to settle above 145.15 will give it the first push towards 147.35, consolidating below the MACD line (144.08) will look like an attempt to reverse the pair in a downward direction from the current levels.   Relevance up to 04:00 2022-10-05 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323298

Summary:  After a series of positive surprises on US economic data last week, the disappointment from the ISM manufacturing was a big deal for the markets. US Treasury yields slumped, with rising expectations of an earlier Fed pivot which we think may be premature. But that helped equity markets close higher, more a signal of positioning rather than expectations. UK’s tax cut U-turn instilled a fresh bid in sterling, but further impeded confidence in the government. Oil prices extended gains and Gold also reclaimed the $1700-mark. On watch today will be how the Reserve Bank of Australia transitions to a slower rate hike pace. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally over 2% US stocks rallied for the first day of the quarter with the Nasdaq100 up almost 2.4%, and the S&P500 up about 2.6%, which is the best gain since July 27. It comes as the 10-year US Treasury yield rolled over to trade at around 3.65% (after topping 4% at one-point last week). The risk-on mood was fueled by several things; firstly, the UK government did a U-turn and will reverse plans to scrap the top rate of income tax. Secondly, the United Nations called on the Fed and other central banks to halt interest rates hikes. And thirdly, what also boosted sentiment was that two Fed speakers at the weekend, Brainard and Daly were reportedly discussing the downside of hiking too fast. And fourthly, weaker than expected US economic news came out with; US manufacturing falling for the third time in four months. As for the S&P500, the technical indicators; the MACD and the RSI also remain in oversold territory, which supports the notion that some investors believe a short-term rebound may be seen perhaps amid the risk-on mood. However, caution still remains in the air ahead of further Fed's hikes. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) The US Treasury yields retreated on Monday as a subdued ISM manufacturing print led to calls of slower Fed tightening and an earlier Fed pivot, which had already been building last week as well due to the risk of wider market disruptions as things have started to break. The reversal of the UK tax cut also supported Gilts, and some pass-through was seen to the US Treasuries. 2-year yields declined over 16bps to 4.11%, while the 10-year was down 19bps to 3.63%. Australia’s ASX200 (ASXSP200.1) poised to raise 1.5% with a focus on oil stocks Commodities will be focus on the ASX today with Oil and LNG stocks like Woodside (WDS), Santos (STO) set to see some action after the oil and gas prices jumped 5%. Other stocks to watch include Worley (WOR) who services the energy sector. Iron ore companies will be watched as well, supported higher by the iron ore price jumping 1.8% to US$94.50. So it’s worth watching if BHP, RIO and CIA can extend their short-term uptrend. AUDUSD rallies back to 0.6516 ahead of RBA’s expected 0.5% hike Australia’s RBA is likely to make another jumbo rate hike and take rates up by 50 bps (0.5%) to 2.85% on Tuesday (which is what consensus thinking is). And then after that, the RBA is likely to move in smaller increments, according to interest rate futures and what RBA Governor Phillip Lowe signaled he wants. With the majority of Australian mortgages at floating-rates, and wage growth being stronger, the RBA’s thinking is that most Aussies will be able to sustain the higher rates as a lot of Australian made extra mortgage repayments amid the lockdowns, as pulled back on discretionary spending. However there are about 2.5 million Aussies who have no buffer. And 9.8 million Aussies have mortgages. So we still think a property pull back might be on the cards. It’s the magnitude of the pull back that is being questioned. The technical indicator, the MACD suggests the AUDUSD could rally if the RBA proceeds with a likely 0.5% hike. However over the long term, our house view remains bearish on the AUDUSD until Fed hikes cool, and commodity demand picks up from China. GBPUSD made a strong recovery, will it last? Cable was seen advancing above the 1.13 handle in early Asian hours on Tuesday as it extended Monday’s gains following announcement of plans to scarp the tax cut by the UK government. A softer dollar also supported pound’s gains, amid a slide in US Treasury yields. However, more Fed tightening is still in the cards and the lack of trust in the new UK government cannot be ignored even if the tax policy has been reversed for now. Focus on the BOE meeting on November 3 where 115bps rate hike is priced in, lower than last week’s pricing of 150bps. However, a full-budget statement will be released before that and further austerity measures, if included, can bring fresh downside for the sterling. EURGBP slid below 0.8700. Crude oil (CLX2 & LCOX2) extends gains on OPEC+ chatter Crude oil trades higher ahead of Wednesday’s OPEC+ meeting in Vienna as the alliance is considering a production cut of more than 1 million barrels/day to support prices following a 25% slump during Q3 2022. That would be the biggest cut since the pandemic with OPEC+ slashed production by 10 million barrels/day as demand collapsed. WTI futures rose above $83/barrel while Brent was close to $90. With several OPEC+ producers, including Russia, producing below target, and only Saudi Arabia may be able to limit production without a loss in additional market share. Meanwhile, expectations of an earlier Fed pivot also stabilized demand weakness expectations. Gold (XAUUSD) reclaims 1700 on lower US yields Gold extended recent gains as yields on Treasuries continued to decline. After the 10-year yields were seen topping the 4% level at one point last week, they are now off about 40bps to end at 3.63% yesterday. Meanwhile, a softer dollar and rising geopolitical tensions have also brought back investor demand for the yellow metal. A weaker ISM manufacturing print yesterday (read below) has also increased calls for an earlier Fed pivot, which we think may be premature. But the increasing calls for a recession have meant gains for Gold which was last seen back at $1,700/oz.   What to consider? US ISM manufacturing disappoints The headline for September’s US ISM manufacturing came in weaker than expectations at 50.9 from the prior month’s 52.8 and expected 52.2. Both employment and new orders both dropped into contractionary territory printing 48.7 (exp. 53.0, prev. 54.2) and 47.1 (prev. 41.3), respectively. The report showed that higher interest rates are starting to weigh on business investment sentiment, at least in the interest rate sensitive sectors. Still, the inflationary gauge of prices paid declined to 51.7 (exp. 51.9, prev. 52.5) falling for the sixth straight month. Supplier delivery times suggested some easing on the supply chains, but overall the report indicated the case of a slowdown in the US economy as rapid Fed tightening continues. UK scraps plans to cut taxes The UK government confirmed reports it will not go ahead with the abolition of the 45p rate of income tax but they are committed to borrowing extra over the winter to help with the ongoing energy crisis. The Chancellor told BBC the proposal was "drowning out a strong package", which includes support for energy bills, cuts to the basic rate of income tax, and the scrapped increase in corporation tax. However, he saw the abolition of 45p tax rate as a distraction from the overriding mission, and thus decided to remove it. This puts water on the Bank of England’s bond-buying, and exposes further the cracks in UK policymaking, thus suggesting that the UK assets are not out of the woods. A full-budget, which has now been brought forward to before the next BOE meeting on November 3, could include more tax cuts. Fed pushes back on an earlier pivot Fed’s NY President John Williams repeated inflation is too high and the Fed's job is not done, also saying that the monetary policy is still not in restrictive zone, pushing back on some calls for an earlier Fed pivot. He acknowledged signs of a slowdown in the housing sector or the consumer and business investment spending, but nothing that could deter the Fed from fighting inflation. On forecasts, he sees inflation likely down to 3% by next year (median view for Core PCE 3.1%), and the US is likely to see unemployment rise to 4.5% by end of 2023 (median view 4.4%). Thomas Barkin (2024 voter) made the case for more inflation in the post-pandemic world, noting that the Fed must consider global developments, but the focus is on the US. Japan’s Tokyo inflation accelerates further Japan’s September Tokyo CPI came in at 2.8% YoY, a notch softer than last month’s 2.9% YoY and in-line with expectations, but the core-core (ex-fresh food and energy) print accelerated to 1.7% YoY from 1.4% YoY, also coming in ahead of expectations at 1.4% YoY. Higher global food and energy prices along with a record weak yen has brought import price pressures on Japan’s economy, and this print hints at further gains in CPI on the horizon. While the pressure on the Bank of Japan to hike rates may have eased for now as US yields are easing, but there is still more Fed tightening in the pipeline and fresh pressures cannot be ignored. Reserve Bank of Australia may step away from moving to a slower rate hike pace The Reserve Bank of Australia is scheduled to announce its next rate decision on Tuesday, October 4. Governor Lowe had previously signalled that the pace of rate hikes is likely to slow from here after four consecutive rate hikes of the magnitude of 50bps. However, money markets and Bloomberg consensus forecast is still calling for another 50bps rate hike at the October meeting suggesting that RBA may delay taking the foot off the pedal just yet. The recent slide in the Australian dollar and worries over a turmoil in global financial markets may prompt the policymakers to front-load more of the rate hikes while the economy is still holding up. Retail sales data last week was upbeat while the first monthly inflation data reading at 6.8% is only slightly off the 7% levels seen in the preceding month. So, even as a monthly meeting can ensure a steady pace of rate hikes even with a smaller 25bps rate move, policymakers would possibly prefer to make a larger move this week to provide some support to the AUD. Likewise, the Reserve Bank of New Zealand is also expected to hike rates by another 50bps at their October 6 meeting.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-4-oct-04102022

Yesterday, bulls again pushed the USD/JPY pair above the key 145 mark, but failed to gain a foothold there. The yen turned out to be a tough nut to crack, which is still too tough for the dollar bulls. For a penny of ammunition, for a ruble of ambition Trampling the USD/JPY pair, which lasted all last week, unexpectedly gave way to a decisive upward movement on Monday morning. Lacking a new fundamental catalyst, the dollar miraculously managed to hit the 145 peak it tested in September again. Recall that the last time this barrier was captured turned out to be a disaster for the greenback. In response to the strong fall of the yen, the Japanese authorities carried out the first intervention in 24 years to support their national currency. Having touched a potentially dangerous line, this time the greenback was more cautious and without intervening in the market, it bounced back as if scalded. This served as yet another confirmation that USD/JPY bulls are still wary of intervention and do not want to draw fire on themselves. Of course, the dollar still has a strong amulet in its pocket that will almost save it from a steep plunge. We are talking about the growing monetary divergence between the US and Japan. But the market is well aware that this is no longer enough for the USD to rise. With the Japanese government continuing to threaten to intervene again, the dollar needs a big boost in the form of strong economic data. A strong US economy will definitely allow the Federal Reserve to satisfy all its hawkish ambitions, and weak macroeconomic statistics, on the contrary, will prevent this. Recall that at the September meeting, the US central bank raised interest rates by 75 bps and reaffirmed its willingness to raise the rate more aggressively if inflation continues to be high. Nevertheless, many analysts believe that the 75 bps step is the ceiling for the Fed. The US central bank is unlikely to decide on anything more, given the uneven economic data. This opinion was supported by the latest index of business activity in the US manufacturing sector. The ISM reported a reading of 50.9 in September, lower than its forecast of 52.2. After the release of pessimistic statistics, the yield on 10-year US bonds fell by 14 basis points to 3.66%, and the dollar significantly fell. Flat may drag on Today's portion of US economic data is also unlikely to please the USD/JPY bulls. Tuesday's key report will be the release of the index of business activity in the services sector from ISM. Economists forecast a decline in September to 56 compared to the previous value of 56.9. The data on the index of new orders for the last month may also turn out to be weak. The indicator is expected to fall to 58.9 against 61.8 recorded in August. Preliminary estimates are putting significant pressure on the dollar-yen this morning as it struggles to break out of the consolidation phase to try again to break through the defenses at the psychologically important 145 mark. At the time of release, the quote jumped almost 0.2% and traded around 144.80. The trigger for the asset was a dovish statement by Japanese Prime Minister Fumio Kishida. The day before, the official said that the government will continue to stimulate the economy, while trying to make the most of the weak yen. The geopolitical factor also provided significant support to the dollar - the escalation of tension between Japan and North Korea. At the beginning of the day, it was reported that Pyongyang, which had already tested an unprecedented number of missiles this year, had fired another short-range ballistic projectile. This time, the target of the North Korean military appeared to be the Hokkaido area, which is considered the second largest Japanese island. In response to the missile launch over Japan, the Hokkaido authorities issued an air raid alert and urged the people of the region to take shelter. Meanwhile, Japanese Defense Minister Yasukazu Hamada has signaled that Tokyo is considering all options for strengthening its defenses, including a counterattack. If the conflict between the countries continues to escalate, the Japanese yen may weaken even more. In this case, bulls on the USD/JPY pair will finally have a real chance to settle above the 145 level. However, we recommend that traders do not force things yet and be patient, especially since most forecasts for the USD/JPY pair point to further movement in the flat. Most likely, in the coming days, the dollar and the yen will continue to pull the price rope in the 144-145 range. Technical picture for the USD/JPY pair The short-term trend is neutral, but has a tendency to the downside. As the quote fell below the 20-, 50- and 100-EMAs yesterday, this could spell further losses. If the bears manage to take the asset below 144, this will open a fast route to 143.90.   Relevance up to 09:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/323332

Technical analysis: USD/JPY has been trading upside this morning after the strong rejection of the support at 143.50. I see potential for the upside continuation of the bigger upside trend. Trading recommendation: Due to the strong rejection of the support at 143.50 and breakout of the multi-hour range, I see potential for further rally. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 144.90 and 145.25 Stochastic oscillator is showing fresh bull cross, which is good sign for further upside movement. Key support is set at the price of 143.50-144     Relevance up to 09:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295521

OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the UK fiscal situation, Japanese intervention, OPEC+ and the week ahead. http://www.subscribeonandroid.com/audioboom.com/channels/4947364.rss This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Market Insights Podcast (Episode 382) - MarketPulseMarketPulse

At the close of the New York Stock Exchange, the Dow Jones fell 0.14%, the S&P 500 fell 0.20%, and the NASDAQ Composite fell 0.25%. The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 2.46 points or 2.78% to close at 91.10. Visa Inc Class A rose 2.02 points or 1.09% to close at 187.67. UnitedHealth Group Incorporated rose 3.90 points or 0.75% to close at 527.07. The biggest losers were Goldman Sachs Group Inc, which shed 5.87 points or 1.86% to end the session at 309.00. Shares of JPMorgan Chase & Co rose 1.38 points (1.23%) to close at 110.39, while Dow Inc shed 0.56 points (1.20%) to close at 46 .06. Leading gainers among the S&P 500 components in today's trading were Illumina Inc, which rose 6.56% to hit 218.52, Schlumberger NV, which gained 6.26% to close at 41.57, and Gap Inc, which rose 5.19% to end the session at 9.72. The biggest losers were Lumen Technologies Inc, which shed 9.45% to close at 7.28. Shares of Enphase Energy Inc shed 9.25% to end the session at 261.60. Quotes Vornado Realty Trust fell in price by 6.38% to 22.47. The leading gainers among the components of the NASDAQ Composite in today's trading were Chardan Nextech Acquisition 2 Corp, which rose 102.63% to hit 21.54, Nauticus Robotics Inc, which gained 96.27% to close at 6.32. , as well as shares of Pineapple Holdings Inc, which rose 93.01% to end the session at 2.76. The biggest losers were Bit Brother Ltd, which shed 42.97% to close at 0.18. Shares of Avenue Therapeutics Inc shed 41.59% to end the session at 8.47. Quotes Scienjoy Holding Corp fell in price by 36.99% to 1.38. On the New York Stock Exchange, the number of securities that fell in price (2102) exceeded the number of those that closed in positive territory (991), while quotes of 107 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,313 companies fell in price, 1,443 rose, and 198 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.79% to 28.55. Gold futures for December delivery shed 0.28%, or 4.90, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 1.76%, or 1.52, to $88.04 a barrel. Futures for Brent crude for December delivery rose 2.07%, or 1.90, to $93.70 a barrel. Meanwhile, in the Forex market, EUR/USD fell 0.96% to hit 0.99, while USD/JPY edged up 0.35% to hit 144.60. Futures on the USD index rose 1.00% to 111.08.   Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295644

The USD/JPY pair continues to consolidate under the sloping ascending line of the monthly price channel. Investors are probably waiting for tomorrow's data on US employment in order to confidently resume long positions on the dollar together with the rest of the market. The growth prospect still does not seem very long, our main scenario involves working out the nearest resistance along the price channel line in the area of 147.35, where the price can form a divergence and a subsequent reversal with the Marlin Oscillator. The Marlin Oscillator is moving along the zero line on the four-hour chart. The price is between the MACD line and the resistance level of 145.20. Consolidating above it (and in case of strong news, simply overcoming the level) opens the target at 147.35. Yesterday there was a false consolidation of the price below the MACD line, which is also a sign of the price's intention to continue growing further. Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323549

USD/JPY struggles to gain any meaningful traction and oscillates in a range on Friday. Speculations that Japanese authorities might intervene in the markets cap the upside. The underlying USD bullish sentiment acts as a tailwind ahead of the US NFP report. The USD/JPY pair fails to capitalize on its gains recorded over the past two trading sessions and oscillates in a narrow range through the early European session on Friday. The pair is currently placed around the 145.00 psychological mark and remains at the mercy of the US dollar price dynamics. Growing acceptance that the Fed will stick to a more aggressive rate hiking cycle to tame inflation continues to act as a tailwind for the greenback and the USD/JPY pair. In fact, the markets have been pricing in another supersized 75 bps Fed rate hike move in November. The bets were reaffirmed by the recent hawkish comments by several Fed officials, reiterating that the US central bank remains committed to bringing inflation under control. Furthermore, the widening of the US-Japan rate differential is seen weighing on the Japanese yen and offering support to the USD/JPY pair. The prospects for a faster policy tightening by the Fed remain supportive of elevated US Treasury bond yields. In contrast, the Bank of Japan remains committed to keeping JGB yields at low levels. That said, intervention fears hold back bulls from placing fresh bets and capping gains for the major. Japanese Prime Minister Kishida talked about the weakness in the domestic currency and said that the recent sharp, one-sided yen moves are undesirable. Kishida added that the intervention last month reflected the view that we cannot turn a blind eye to speculative FX moves. This comes after Japan's finance minister Shunichi Suzuki said on Monday that the government stands ready to intervene in markets to prevent deeper losses in JPY. Market participants also seem reluctant and prefer to move to the sidelines ahead of the crucial US monthly employment details, due for release later during the early North American session. The popularly known NFP report will influence Fed rate hike expectations. This, in turn, will play a key role in determining the near-term trajectory for the buck and provide a fresh directional impetus to the USD/JPY pair.

Japan’s top currency diplomat Masato Kanda said on Friday that he “has never felt a limit to ammunition for currency intervention.” Kanda added, “making various steps so as not to face a limit to ammunition when it comes to FX intervention.” Market reaction USD/JPY is extending its retreat from above 145.00 on Japanese verbal intervention. The pair is trading -0.21% on the day at 144.81, as of writing.

More and more of the worlds central banks are turning to currency interventions to keep their currencies from weakening. While each central bank is saving its currency, they are all working together to undermine the Dollars value by increasing its global supply. Bank of Japan protecting USD/JPY  For the last two weeks, Japan has been protecting the yen from further weakening by keeping the USDJPY above 145. At the same time, the Bank of Japan is not changing its ultra-soft monetary policy. Given Japans deep pocket of more than 1 trillion US treasuries, this promises to be an extended play, attracting speculators interest in buying into the pair on the downside. British Pound supported The Bank of England reportedly entered the market last week to keep the pound from collapsing. Record lows in the Indian rupee also forced the countrys central bank to intervene in the market. There is little information on China, but there is also a large force there, reversing the rate on the rise above 7.20, as it has done since 2019. Hong Kong and the Czech Republic have been injecting dollars into the markets. Bloomberg's analysis Bloomberg calculates that global foreign exchange reserves have fallen by 1 trillion to 12 trillion since the start of the year, only about half of which is due to a rising dollar, with the other half coming from dollar sales. We are seeing more and more countries standing up to national currencies in an attempt to contain inflation. If this trend continues to gather momentum, multiple streams promise to become a full-flowing river, raising the overall level of dollar liquidity. Check out our comment on RBA: Interestingly, the trend towards defensive interventions is detrimental to Fed policy, so the latter can only strengthen and extend its active steps to tighten monetary policy. And this game is against the interests of the majority in the world, so developments promise to be fascinating. Even if a host of smaller central banks fail to prevent the Dollar from renewing the highs reached at the end of last month, further US currency growth promises to be much more complex and slower. The 16-month dollar growth trend promises to stop being a one-way street.

On Friday, the USD/JPY pair reached the resistance of the embedded price channel line (145.29), and this morning it went above it. Now the price has opened the 147.30 target, determined by the upper embedded line of the price channel. Currently, the line of the Marlin Oscillator is moving sideways in the positive area, just above the zero line. When the price reaches the level of 147.30 with the oscillator, a divergence may form, which will become a signal and a condition for the trend to reverse into a deep correction (or a reversal of the medium-term trend). The price has already consolidated above the 145.29 level on the 4-hour chart, which is also the October 3rd high. Marlin is in the positive area. We are waiting for the development of an upward trend.   Relevance up to 04:00 2022-10-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323786

USD/JPY: The chart shows the movement of USD/JPY in the 30-minute (M30) chart. The current scenario in which the inclined solid line is approaching the resistance level of £145.81 and could possible intersect with it forms a divergence area where three movements could develop. First is a rise towards £145.81, then a reversal to £144.92. Second is moving to the support level of £145.81, a breakdown, then a rush towards £147.30. Lastly is a rebound towards £144.92 without reaching £145.81. Good luck!   Relevance up to 16:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323887

The USD/JPY currency pair, after consolidating above the nearest embedded price channel line on the daily chart, accelerated its growth towards the next target line in the area of 147.30. Here, according to the main scenario, we expect a divergence to form with the Marlin Oscillator and a reversal into a deep correction, presumably to the MACD line (143.00). If the price settles above 147.30, the dollar's growth may become extreme - up to the next line of the price channel in the area of 150.00. On the 4-hour chart, the price is accelerating growth supported by a strongly rising Marlin Oscillator. The price, at first and second glance, is not holding back from moving towards the target of 147.30.   Relevance up to 04:00 2022-10-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324033

Looming intervention from Japan, economic fears cited by BOE’s Bailey, IMF keep bears hopeful. Yields grind higher as London/Tokyo struggle to defend respective currencies. Chinese shares lead bears, KOSPI fails to justify BOK’s rate hike. Asian stocks hold lower grounds, led by China, as economic slowdown fears join pre-Fed Minutes anxiety during early Wednesday. Even so, sluggish yields and an absence of major data/events restrict immediate moves. That said, MSCI’s index of Asia-Pacific shares outside Japan renews the 30-month low, down 0.75% intraday by the press time, whereas Japan’s Nikkei 225 remains mostly steady around a one-week low. Earlier in the day, USDJPY crossed the 145.90 level and pushed the Japanese policymakers to defend the domestic currency. Following the same, Japan’s Chief Cabinet Secretary Hirokazu and Finance Minister Shunichi Suzuki crossed wires while showing readiness to tame the price move, if needed. Elsewhere, China’s firmer determination to defend the zero-covid policy joins the recently gradual fall in the domestic currency to renew fears of the People’s Bank of China (PBOC), which in turn led the markets in Beijing towards witnessing more than 1.0% daily loss. While following the same, New Zealand’s NZX 50 drops 1.0% but Australia’s ASX 200 prints mild gains as Reserve Bank of Australia (RBA) Assistant Governor Luci Ellis mentioned, that the central bank’s policy is no longer in an expansionary place. However, comments like, “The neutral rate was a moving target and hard to determine at any stage in time,” seemed to have weighed on the Aussie stocks. South Korea’s KOSPI prints 0.25% intraday gains even after the Bank of Korea announced a rate hike while Indonesia’s IDX Composite traces Chinese equities to drop 0.65% at the latest. On a broader front, S&P 500 Futures remain sidelined around monthly low but the Treasury bond yields are mostly firmer, despite the latest inaction, which in turn portrays the market’s rush towards risk safety. Moving on, Federal Open Market Committee (FOMC) Meeting Minutes will be eyed for clear directions amid hawkish Fed bets. Also important will be the moves by the British and the Japanese policymakers to defend the GBP and the JPY respectively.

We are only Wednesday, and the Bank of England (BoE) already intervened twice this week, to cool down the unbearable negative pressure on the British sovereign bonds. But the BoE Governor Bailey’s lack of tact sent all efforts up in smoke. The UK sovereign and sterling remain under a decent selling pressure. All eyes are on FOMC minutes and the US inflation data Beyond Britain, all eyes are on FOMC minutes and the US inflation data. Today, the minutes from the FOMC’s latest meeting will reveal if some Federal Reserve (Fed) members are concerned about going ‘too fast’ in terms of rate hikes. US will also reveal the latest producer price index for the month of September. The US factory-gate prices are expected to have slowed from 8.7% to around 8.4%. Then tomorrow, we will have a better insight about the situation in consumer prices. The headline CPI is expected to have slowed from 8.3% to 8.1%, but core inflation may have spiked higher, which is bad news for those praying for the Fed to slow down the pace of its rate tightening. Elsewhere, the IMF cut its global growth forecast for next year to 2.7%, from 2.9% in July, and from 3.8% in January, and said that there’s 25% probability that growth will slow to less than 2%. In the euro area, the GDP could rise just 0.5% next year. Forex Market The EURUSD remains under a decent pressure of the strong dollar, and only a soft inflation data from the US could help the euro bears take a pause. In Japan, things are not necessarily better. The USDJPY spiked above the 146 level for the first time in 24 years, and investors couldn’t trade the 10-year JGBs for three days, because the BoJ broke the system by buying just too much of the 10-year bonds to conduct a yield curve control strategy. Swap traders are now betting that the BoJ can’t carry on with abnormally low interest rates for so long, and will be forced to hike its rates at some point. Watch the full episode to find out more! 0:00 Intro 0:37 It’s not time for a gaffe, Mr. Bailey! 3:31 Jamie Dimon sees another 20% drop in S&P500 4:23 But it all depends on US inflation and the Fed policy! 6:27 Intel crops jobs 7:32 IMF cuts global growth forecast 8:04 EURUSD under pressure 8:38 US crude slips below $90pb 8:47 BoJ will soon be forced to act on rates to stop yen depreciation Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #UK #GBP #gilt #Bailey #Liz #Truss #sovereign #crisis #FOMC #minutes #USD #inflation #PPI #CPI #crude #oil #Intel #IMF #growth #forecast #JPY #BoJ #FTSE #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH

On Wednesday morning, the Japanese currency was covered by a strong tsunami caused by the USD. Paired with the dollar, the yen crossed the red line at 145.90 and collapsed to a new 24-year low. The dollar has dispersed Today's culminating event in the foreign exchange market should be the release of the minutes of the September FOMC meeting. Recall that last month, as part of the current tightening cycle, the US central bank raised the interest rate by 75 bps for the third consecutive time and signaled the continuation of an aggressive course in order to curb inflation faster. Now traders hope that the Federal Reserve's minutes will shed light on the central bank's future plans regarding rates. If the report turns out to be more hawkish, it will strengthen expectations for another increase in the indicator by 75 bps. This development is an excellent driver for the yield of 10-year US government bonds. Ahead of the release of the FOMC minutes, the indicator soared to a 14-year high at 4.006%. The jump in yields contributed to the dollar's growth in all directions. At the start of Wednesday, the DXY index rose by 0.16% and tested a 2-week high at 113.54. At the same time, the greenback showed the best dynamics against the yen, which is absolutely logical. Among all the currencies of the Group of 10, the JPY is particularly sensitive to the growth of long-term US bond yields, since the same Japanese indicator is still near zero. The growing monetary divergence of Japan and the United States has led to the fact that this year the yen has sunk against the dollar by more than 20%. And this morning, the yen set another anti-record. The USD/JPY pair jumped by more than 0.3% and touched the level of 146.35. The last time the quote was traded at this level was in August 1998. Is the intervention close? Of course, the fact that dollar bulls crossed the red line again further increased the risk of repeated currency intervention by the Japanese authorities. Recall that the Japanese government intervened in the market for the first time in 24 years three weeks ago, when the USD/JPY pair reached the level of 145.90. Now, when the quote turned out to be much higher than this level, many traders are afraid of a repeat of the September scenario in the near future. However, this time Japanese politicians will most likely not focus on any particular red line. At this stage, the more important indicator will be the rate of change in the exchange rate. This was announced this morning by Japanese Finance Minister Shunichi Suzuki. "If the yen falls rapidly, it will force the Japanese government to push the red button again," Commonwealth Bank of Australia strategist Joseph Capurso shared his opinion. Meanwhile, many analysts warn that in the short term, the dollar's growth may accelerate significantly on all fronts, including against the yen. Today's FOMC minutes is far from the only obvious driver for the dollar. The real rocket fuel for the USD may be tomorrow's release of statistics on inflation in the United States for September. If the market sees that consumer price growth is still steady, it is likely to reignite a wave of speculation about an even sharper rate hike in America. In this case, the dollar may demonstrate another parabolic growth. Then Japan will simply have no other choice but to re-intervene. The yen is doomed anyway According to Kapurso, the Japanese government will intervene in the market by the end of this week. However, as in September, the effect of the intervention will be short-lived. Any fluctuations caused by the intervention of the USD/JPY pair will stop within a few weeks, the analyst is certain. The quote will be able to recover fairly quickly, since the dollar now has very strong support: the Fed's November meeting is ahead, which means the next round of rate hikes. The asset has excellent growth potential in the longer term. Even if in the future the Fed starts to slow down the pace of tightening its monetary rate a bit, the Bank of Japan policy will still remain ultra-soft. This should support the US currency. We expect that the dollar will remain strong at least until next spring, and we maintain our 3-month forecast for the USD/JPY pair at 147.00, Rabobank analysts said.   Relevance up to 09:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324071

USDJPY in steepest trend in 30+ years is facing strong resistance at 147.65, peak from 1998. Trend is stretched and USDJPY is forming a rising wedge top and reversal pattern  USDJPY Earlier this week buyers manage to break and close above the resistance at 145.145 was the 1.618 projection of the July correction.At the time of writing USDJPY is breaking above the peak of the very volatile trading day 22nd September. The energy from that day suggests USDJPY could move to the Fibonacci projection 1.382 at 148 but 1.618 projection at around 149.34 is not unlikely. If that scenario unfolds USDJPY will be testing the upper trendline in what looks like a rising wedge pattern (two black rising lines). Short-term uptrend is a bit stretched indicated by divergence on RSI but the uptrend is intact.   However, as can be seen from the monthly chart there is strong resistance at 147.65. 147.65 is the peak in 1998 and within few cents also the length of the 3rd vawe from 2012 to 2015. The uptrend since 2021 is the steepest and fastest the past 30+ years and it is quite stretched. There is still no divergence on RSI however, but since October is still not over the jury is still out. A possible scenario could be for USJPY to spike above the 147.65 to 148-149 and then exhaust. If USDJPY closes below the lower trendline of the rising wedge on the daily chart it is a strong indication of trend reversal. Break out for wedges usually occurs 2/3 of the way to the apex (where the two lines meet) and we are approximately 60% of the way.If USDJPY closes above the upper trendline this Wedge reversal scenario has been demolished.        Source: https://www.home.saxo/content/articles/forex/ta-usdjpy-12102022

Summary:  Japan’s relaxation of border curbs and reopening this week is well timed for a potential year-end tourism boom, with upswing in both domestic and international travellers likely. Pent-up demand and a weak yen further help to improve Japan’s position as an attractive destination, although the lack of Chinese tourists will mean that a full recovery has to wait for much longer. Still, there appears to be potential investment opportunity in key travel and tourism related stocks and sectors such as airline, transit services, travel agencies and hotel REITs. The mega border reopening Japan is reopening its borders after three years, allowing visa-free and agent-free travel. Effective 11 October, the Japanese government has effectively removed all border controls that were in place since the Covid outbreak. These include: No visa requirements for foreign nationals entering Japan for business/employment for less than three months, short-stay tourism, and long stays. Visa exemptions will resume for 68 countries/regions No testing or quarantine requirements for visitors from most countries Removed the daily entry cap on new visitors, which was adjusted from 20,000 to 50,000 on 7 September Started to allow unguided package tours for visitors from all, as against only packaged tours that were allowed since June These measures will open the doors to Japan tourism for a world of travellers, especially ahead of the key upcoming year-end travel season. The only obstacle now remaining is potentially proof of vaccination that is still required to enter Japan, while many European countries have removed that requirement as well. Still, given high levels of vaccination rates globally, it is a small obstacle and the intent is clear with PM Kishida pursuing a “living with COVID” policy of weathering the surge in Covid cases without imposing restrictions on businesses or mobility. Domestic tourism to provide a boost There are still a few considerations for Japanese tourists to travel abroad, and the authorities are positioning well to take advantage of that as well. Japanese people are faced with the high cost of travel due to the weak yen and high fuel costs, and the conservativeness makes them hesitant as well with borders just opening up. The government had previously launched a prefectural discount program to promote travel within one’s own prefecture, but from 11 October it has expanded that to a national travel discount program to stimulate nationwide domestic tourism demand, as well as an event discount program that lowers the cost of entrance to events. These two new discount programs are scheduled to run through late December. Pent up demand and weak yen make Japan an attractive tourist destination Even almost a year after Asia started to open up from the pandemic curbs, there is still pent-up demand as most people took the first trip back home and are now waiting to explore. Japan remains the top travel destination for Singaporeans, according to a May 2022 survey by YouGov. Moreover, with the Japanese yen near 24-year lows against the US dollar, and SGDJPY at record highs above 100, the destination is even more attractive for bargain hunters especially with airline prices catching a bid from high demand and high fuel prices. Bank of Japan’s policy divergence to the Fed suggests the weakness in the yen can continue as US yields continue to push further higher this quarter. It is worth noting that Japan’s visitor arrivals tripled to 32 million in 2013-19, when the yen fell more than 20%. Investment opportunities in Asia’s Q4 tourism boom In 2019, Chinese visitors to Japan were almost 10 million, around 30% of the total. Therefore, in the absence of a Chinese border reopening, a full recovery may be some time off. But a weak yen can prop up duty-free spending, covering up for some of the shortfalls created by the lack of Chinese tourists. An overall pickup in travel spending is also likely to be seen in Asia, with many other countries taking mini-steps towards living with Covid and a full reopening. For Japan, this brings investment potential in a range of different businesses. Airport terminals like Tokyo Narita and Haneda can tap into a large share of domestic and international travellers. The Haneda terminal also has a high domestic traffic mix and a 50% or more local resident international passenger base, which can benefit from Japan's pent-up travel demand. Airlines such as ANA and Japan Airlines, as well as railways such as JR West and JR Kyushu could also witness increased passenger traffic, while travel agencies like HIS and entertainment facilities like Oriental Land which operates the Tokyo Disney Resort may benefit as well. Higher hotel occupancy could mean potential upside for hotel REITs such as Japan Hotel REIT. Retail and restaurant chains such as Pan Pacific, Takashimaya, Isetan Mitsokoshi, as well as consumer goods companies such as Shiseido , Kao, Kose may potentially need to wait for the return of the Chinese tourists. Source: https://www.home.saxo/content/articles/equities/japan-potential-tourism-boom-could-bring-investment-opportunities-12102022

USD/JPY oscillates near the 147.00 shore as the risk-off impulse is extremely quiet. Fed minutes and the money market have given a green signal for a third consecutive 75 bps rate hike. Apart from the US CPI, investors await fresh impetus on BOJ’s intervention plans. The USD/JPY pair is displaying a lackluster performance in the Asian session as investors are awaiting the release of the US Consumer Price Index (CPI) data. The asset is oscillating in a narrow range of 146.67-146.90 and is expected to continue the rangebound performance. The risk profile is turning quiet amid the absence of volatility in the market. The US dollar index (DXY) has recovered its morning losses and is attempting to extend its recovery above the day’s high at 113.35. The mighty DXY is expected to remain in the grip of bulls as odds for a fourth consecutive 75 basis points (bps) by the Federal Reserve (Fed) are escalating with sheer momentum. Money market bets indicate that the probability of a 75 bps rate hike announcement is 84%. Wednesday’s keen-jerk reactions by the DXY were comfortably absorbed by the market participants after the release of the Fed policy minutes. Fed policymakers found favoring the continuation of the current pace of hiking interest rates to achieve the agenda of price stability. Also, reaching the targeted terminal rate and sticking to it for an uncertain period is critical to contain the mounting price pressures. On the Tokyo front, odds for intervention in the currency market by the Bank of Japan (BOJ) are skyrocketing. The verdict has strengthened as Japanese Finance Minister Shunichi Suzuki said on Thursday that the government will take decisive action in the FX market if speculative moves are observed in the yen. He further added that volatility is in the consideration of Japanese officials rather than a specific dollar/yen level. Well, volatility in the asset cannot be ruled out as escalating anxiety ahead of the US inflation data will explode and wild moves will be witnessed by the market participants.  

The Japanese currency in a perfect storm    The yen continues to experience the most dramatic fall since 1998. On Thursday night, JPY collapsed against the dollar to almost 147. It was pushed to a new low by a dovish speech by the head of the Bank of Japan. The Japanese currency is once again caught in a perfect storm. On the one hand, the yen is now under strong pressure from expectations of more hawkish actions from the Federal Reserve, and on the other hand, the usual dovish mantras of the BOJ. Yesterday, the JPY fell against the greenback to a new 24-year low at 146.80. The release of the US producer price index for September weighed on the dollar-yen pair. The statistics The statistics did not justify the forecasts of economists, who expected an increase of 0.2%. In reality, the PPI rose more - by 0.4%, which increased traders' fears about a more sustainable growth in consumer prices. US inflation data for last month will be released today. The consumer price index for September is expected to show a slight slowdown (to 8.1% year on year). However, let's not forget about the unexpected turn of events last month, when the statistics for August turned out to be worse than expected. This significantly strengthened the hawkish determination of the Fed and caused a jump in the USD/JPY pair. "If the US CPI rises above economists' estimate again, selling of the yen could pick up, making intervention more likely," said Yoshifumi Takechi, an analyst. Recall that in September the Japanese government intervened in the market for the first time since 1998, when the JPY fell against the dollar to 145.90. Yesterday, the yen fell well below this red line and set a new anti-record, but there was no intervention. Now the Japanese authorities have chosen a different tactic, focusing not on a certain price threshold, but on the speed of the JPY fall. US dollar growth is a global problem This was announced on Wednesday morning by Japanese Finance Minister Shunichi Suzuki, and a little later his words were confirmed by BOJ Governor Haruhiko Kuroda. In addition, Kuroda stressed yesterday that the widespread growth of the dollar is a global problem that needs to be addressed together. According to Kuroda, many economies have already come to an understanding of this and are ready to discuss this issue at the meetings of the G20 and the International Monetary Fund, which are taking place these days in Washington. In fact, Kuroda hinted at the possibility of a coordinated intervention against the dollar, but the market ignored his threat. After Kuroda's speech, the US currency, on the contrary, received an even more powerful impetus. By trying to support the yen, the official only made things worse as he couldn't help but make dovish comments. The discrepancies in the monetary policy The head of the BOJ once again confirmed his commitment to an ultra-soft monetary policy and keeping interest rates at an ultra-low level. The main arguments in favor of a dovish strategy are still the same: the Japanese economy has not yet recovered to its pre-pandemic levels, and inflation in the country is still relatively modest compared to the stalemate in the West. Kuroda's comment once again convinced traders that the discrepancies in the monetary policy of the Fed and the BOJ will grow, especially since now the markets expect an increase in rates in America by at least 150 bps by the first quarter of 2023. The Fed will continue its aggressive fight against inflation, and this will help further strengthen the already strong dollar this year. USD/JPY now On Thursday night, the yen hit a low of 146.98 against the dollar, but USD/JPY sank slightly in the morning. At the time of writing, the asset fluctuated within a narrow range of 146.67-146.90. Amid the expectation of a key inflation report in the US, the USD/JPY pair remains upward, but fears of a potential intervention by the BOJ are forcing traders to be cautious. In any case, analysts predict increased volatility of the asset in today's trading. The main target for the bulls will be the level of 147, while the bears need to fall below 146.66 to seize the initiative.   Relevance up to 08:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324191

Today's release of US inflation data for September may be the one the markets have been waiting for, since the beginning of the week. In light of these expectations, the situation on the Japanese yen, which has weakened once again to levels not seen in 24 years, seems to be shaping up interestingly, with only a trace left on the USD/JPY chart after the Bank of Japan's latest intervention. Yen exchange rate The Japanese yen has weakened towards JPY147 per USD, being close to the levels of August 1998. The recent weakness of the Japanese currency may be due to the statements of the Bank of Japan Governor, who confirmed the maintenance of loose monetary policy in Japan to support the economic recovery. Haruhiko Kuroda added that Japan's economy is still recovering from the pandemic, and that the Bank of Japan's goal is to keep inflation stable in the region of 2 percent. This approach may mean that Japan and the United States may present two very different approaches to monetary policy. In the U.S., interest rates may continue to be raised, while in Japan they may remain unchanged, close to zero. Source: Conotoxia MT5, USDJPY, MN Another Bank of Japan intervention after inflation data release? Japanese Finance Minister Shunichi Suzuki reiterated today that the government is ready to take "decisive" action to counteract the yen's steep decline, but added that the issue is the dynamics of exchange rate movements, not a specific level. As a result, it is the volatility on the USD/JPY pair that may determine interventions, not where the exchange rate of the pair might be . Nevertheless, with today's release of inflation data from the US, volatility could be elevated. This, in turn, could favor the Japanese authorities' decision to intervene. The Japanese intervened in the currency market last month for the first time since 1998, when the yen weakened to levels not seen in 24 years. The intervention, from which there is no trace now, was expected to cost nearly $20 billion, according to Bloomberg data. US inflation data in focus According to market consensus, US inflation in September on a m/m basis was expected to rise by 0.2 percent, while core inflation was expected to rise by 0.5 percent. Meanwhile, on an annual basis, price growth was expected to be 8.1 percent for CPI inflation and 6.5 percent for core inflation. It is the latter reading that may be particularly important. While CPI inflation may have peaked at 9.1 percent in June, the peak for core inflation at 6.5 percent may be surpassed today. Publication today at 14:30 GMT+2. Daniel Kostecki, director of the Polish branch of Conotoxia Ltd. (Cinkciarz.pl investment service)The above commercial publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of April 16, 2014. It has been prepared for information purposes and should not constitute the basis for making investment decisions. Neither the author of the study nor Conotoxia Ltd. are responsible for investment decisions made on the basis of the information contained in this publication. Copying or reproducing this work without the written consent of Conotoxia Ltd. is prohibited. Read article on Conotoxia

More u-turns incoming? Equity markets in Europe are marginally higher as bond market concerns ease and we await the latest inflation data from the US. The Bank of England bond market intervention deadline is looming which in recent days has made investors very nervous about a potential sequel to the mini-budget doom loop that forced the central bank to respond initially. Those fears have eased slightly after the BoE made its biggest emergency purchase so far on Wednesday, totalling more than £4.5 billion, in a sign that pension funds are doing as instructed and reducing risk. That comes after the first couple of weeks in which the uptake was very low, prompting some to speculate that this Friday’s deadline would trigger another frenzy. No one is calm yet and I have no doubt that the central bank will step in again if we get a repeat. The view of many though is that we shouldn’t be waiting for that cliff-edge moment, that the central bank should leave the backstop in place until the budget at the end of the month at which point a sticking plaster will hopefully no longer be necessary. What may make things easier for the BoE is more u-turns from the government ahead of the budget and that is what is reportedly being discussed today. There have been rumours of a meeting between number 10 and the Treasury to discuss possible u-turns including on corporation tax which would be another humiliating climb down, albeit one that is boosting the pound which now trades almost 1.5% higher against the dollar today. UK yields are also in retreat on the back of those rumours. US inflation in focus The spotlight will shift from the UK back to the US shortly as we get the latest CPI reading from the world’s largest economy. The FOMC minutes on Wednesday had a slightly dovish tone to them, an indication that some policymakers are becoming less comfortable with the scale of tightening, the economic consequences and perhaps even the risk of overcorrecting. That’s not entirely surprising after numerous very large rate hikes but it does represent a slight shift which will intrigue investors. Coupled with a weaker inflation number today – in particular an improvement in the core reading – investors may sense the end of the tightening cycle is nigh. Policymakers have made clear that it will take more than just one number to sway them but investors have never been ones to wait that long. Despite repeated setbacks, they’ve continued to jump at the first opportunity and I’d be amazed if the same isn’t true today, should the data be favourable. More intervention on the way? Japanese Finance Minister Shunichi Suzuki once again sought to reassure the markets overnight that they remain ready to take decisive action in the FX markets, as the yen trades around 147 to the dollar. This is above where the last intervention took place and marginally below the previous high in 1998. While they continue to stress that it’s about volatility and not price levels, nothing has improved on either front since the last intervention which makes you wonder how long they’ll wait and how forceful they’ll be. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Another wild session - MarketPulseMarketPulse

The quote of the USD/JPY pair reached the target level of 147.35 (the price peaked at 147.67), but a distinct divergence with the Marlin Oscillator on the daily chart did not have time to form. This suggests that the price may continue to rise, and the next target at 150.00 is the next price channel line of the monthly timeframe. On the four-hour chart, the price showed the greatest volatility directly at the level of 147.35. Marlin is declining, but in the form of a corrective structure from growth since October 5th. There is a potential for price growth and indicators. We are waiting for further advancement of the USD/JPY pair towards the target of 150.00.   Relevance up to 04:00 2022-10-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324284

Japanese Chief Cabinet Secretary Hirokazu Matsuno said that “North Korea launched one ballistic missile early Friday.” Additional comments “I believe North Korea would engage in further provocative behavior, possibly a nuclear test.” “Japan will continue to work closely with the US and South Korea to accomplish North Korea's total denuclearization.” Market reaction USD/JPY is trading better bid around 147.25 so far, shrugging off the geopolitical risks surrounding North Korea

Yesterday, the foreign exchange market experienced a strong storm. At first, the dollar took off like a rocket in all directions, and then it also sharply sprung back. But it still looks good against the yen. The bouncing dollar On Wednesday, the US currency showed another parabolic growth against all its major competitors. The springboard for the greenback was the shocking data on inflation in the United States. Statistics for September showed that consumer prices in America rose more than expected. On a monthly basis, the indicator rose by 0.4% against the forecast of 0.2%. As for the annual dynamics, inflation also exceeded the preliminary estimate of economists and amounted to 8.2%. This is only 0.1% lower than the value recorded in August. The market saw that the growth of consumer prices in the United States is still stable, despite the aggressive anti-inflationary campaign launched by the Federal Reserve this year. This significantly increased traders' expectations about the continuation of the hawkish course in America and the next increase in the interest rate by 75 bps. Moreover, the hot inflation data again provoked a wave of speculation about a possible rise in the indicator in November by a full percentage point. The probability of such a scenario has increased to 13.4%. Optimism about a more aggressive tightening served as an excellent springboard for the dollar. Literally overnight, the DXY index jumped by more than 0.5%. One of the most productive majors was the USD/JPY pair. The quote soared by 0.7% and set another record at 147.665. The last time the dollar traded against the yen at this level was in 1990. However, the USD/JPY pair did not stay at the 32-year high for long. Shortly after the release of the consumer price index, the large-scale triumph of the greenback was replaced by an epic failure of the same power. Analysts explain this by the fact that the market has already fully embedded in the value of the dollar expectations about sustained inflation and its impact on the future course of the Fed. Now a new trigger is needed for the USD to grow steadily, and we will get it soon. Now everyone's focus is switching to the Fed's monetary policy meeting next month. As we approach the moment X, the dollar will grow on strong US economic data. The yen is an obvious loser Despite its recent rebound, the USD/JPY pair still maintains a strong upward mood. This morning, the asset is staying near the 32-year peak reached a day earlier. Even the growing risk of currency intervention cannot weaken the grip of dollar bulls. At the start of Friday, the Japanese government again threatened to intervene in the market if there is a rapid fall in the yen. Recall that last month, for the first time since 1998, Japan intervened in support of its national currency, when it fell against the dollar below the level of 145.90. Given the recent statements of Japanese officials regarding the intervention, it can be assumed that now they will not protect any specific levels. The other day, the Japanese Finance Minister and the head of the Bank of Japan stressed that at this stage the focus is shifted to the rate of change in the exchange rate. According to analysts, this approach can keep dollar bulls only from sudden movements, but in general USD/JPY will remain in a bullish trend. In the future, the asset will move to new price highs quietly for several weeks. Perhaps at some point it will get bogged down in consolidation again, but the upcoming rate hike in the US will not allow it to go into suspended animation for a long time. The monetary divergence of America and Japan, which has already collapsed the yen against the dollar by almost 28% since the beginning of the year, will continue to intensify and put pressure on the JPY. This week, BOJ Governor Haruhiko Kuroda once again reaffirmed his commitment to a dovish monetary exchange rate. He again stressed that he does not consider the current inflation a reason to raise rates, especially since the Japanese economy has not yet recovered from the COVID-19 pandemic and still needs incentives. Kuroda's comment further aggravated the divergence in the policy of the BOJ and the Fed, especially amid the fact that the market is now expecting further tightening in America. This suggests that the yen's downward trend against the dollar will not change in the near future, even if the threat of further interventions will contribute to slowing the growth of the USD/JPY pair.   Relevance up to 09:00 2022-10-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324310

USD/JPY continues to move edge higher and is up 1.6% this week. In the European session, USD/JPY is trading at 147.67, up 0.25%. The Japanese yen is once again on a downswing, after hugging the key 145 line. The dramatic intervention by Japan’s Ministry of Finance (MoF) in September stemmed the yen’s bleeding, but this move by Tokyo appears to have had a very short shelf-life, as the yen fall to new 24-year lows. Intervention anyone? The burning question is with the yen currently lower than when the MOF stepped in, will it again intervene to prop up the Japanese currency? The first intervention clearly didn’t achieve its desired effect of stabilizing the yen below 145 and Japan’s foreign reserves fell by a record amount in September, around 2.8 trillion yen. The game of cat-and-mouse between the MOF and speculators betting against the yen continues, and another currency intervention could be in the works, but it would likely have to be much larger than the first intervention. The MOF could try to send a stronger warning to the markets, but it’s questionable whether unilateral action by Japan will be enough to change the yen’s downtrend. The Bank of Japan has no intention of capping JGB yields and with the Fed likely to deliver another oversize rate hike in November, the US/Japan rate differential will continue to widen and likely weigh on the Japanese yen. The US posted another hot inflation report for September. Headline inflation ticked lower to 8.2%, down from 8.3% but above the consensus of 8.1%. Core inflation rose to 6.6%, up from 6.3% and higher than the forecast of 6.5%. Inflation clearly is yet to peak despite monetary policy becoming restrictive, and the inflation data cements expectations for a 75 basis point hike at the November meeting. . USD/JPY Technical USD/JPY is testing resistance at 147.50. Above, there is resistance at 148.32 There is support at 147.50 and 146.04 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Japanese Prime Minister Fumio Kishida had to make an appearance on Monday, as the USD/JPY rally appears unstoppable. He said that they “will take steps against speculative FX moves as needed.” “Rapid forex moves undesirable,” he added.

USD/JPY retreats from intraday high, prints the first daily loss in nine around 32-year high. Japan PM Kishida assures taking steps to limit speculative FX moves, begin search for replacing BOJ Governor Kuroda. Pullback in yields, light calendar tease sellers around multi-year high. USD/JPY bulls take a breather at the highest levels since 1990, printing mild losses near 148.50 during the early hours of Monday’s European session. In doing so, the yen pair prints the first daily loss in nine amid fears of Japan government’s intervention, as well as amid the Treasury bond yields’ retreat. Recently, Japanese Prime Minister Fumio Kishida mentioned that they “will take steps against speculative FX moves as needed.” Japan PM Kishida also added that rapid forex moves are undesirable. Earlier in the day, the Japanese leader mentioned “Will consider a successor to BOJ Governor Kuroda, taking into account monetary policy foreseeability, coordination with the government.” With this, Japan’s Kishida indirectly strikes the Bank of Japan’s (BOJ) easy money policies and suggests a dislike for the USD/JPY run-up. Also exerting downside pressure on the USD/JPY prices could be the sluggish US Treasury bond yields and the broad US dollar pullback amid a sluggish start to the week. Elsewhere, cautious optimism about the UK’s economy, due to the latest shuffle in the PM’s team, as well as the absence of the market’s wagers on the Fed’s 1.0% rate hike also keep the USD/JPY sellers hopeful at the multi-year high. It should be noted that the Japanese intervention appears imminent and can trigger the much-needed pullback from the highest levels since 1990. However, the pace of the fall depends upon the size and timing of meddling. Even so, the divergence between the monetary policies of the Fed and BOJ can keep the USD/JPY bulls hopeful. Technical analysis A clear pullback from the three-month-old ascending resistance line, at 149.10 by the press time directs USD/JPY sellers towards a three-week-old ascending support line, at 146.30 as we write.

Red lines- bullish channel Black lines- bearish RSI divergence USDJPY is trading around 148.87 making new weekly and 2022 highs. Trend remains technically bullish as price continues making higher highs and higher lows. The RSI is providing us with a very important warning. The up trend is weakening according to the RSI. A pull back at least towards the lower channel boundary is justified. A pull back towards 141 is very possible. Bulls need to be very cautious. Traders need to have patience. The RSI bearish divergence is only a warning and not a reversal signal. Relevance up to 13:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297101

A humiliating blow Another turbulent start to the week, albeit a positive one broadly speaking with equity markets around 1% higher in Europe after a decent start to the week in Asia. Since Liz Truss became UK Prime Minister, uneventful days have eluded us and this week has also got off to another hectic start. While the Prime Minister had every intention of making waves in her first weeks in charge, she clearly didn’t anticipate the storm that was brewing and I’m sure she more than anyone at this point would do just about anything for a more peaceful few weeks. Read next: Netflix Stock Price May Tumble Tomorrow! What Can We Expect From NFLX Earnings? | FXMAG.COM Assuming she lasts that long, of course. The u-turn this morning was even more historic than the initial mini-budget. A humiliating moment after a chaotic period for Truss in which confidence in her in the markets, the public and her own party, it seems, has been decimated. That said, we are seeing some improvement from a market perspective. It just took reversing almost all of the unfunded tax cuts to achieve it. Who’d have thought? The job isn’t done yet though, the new Chancellor has done what was necessary now but the harder decisions arguably come later this month in the budget. How low can it go? The yen is continuing to slide against the US dollar, hitting 148.89 this morning and trading beyond the level the country intervened at in 1998 and, of course, last month. We’ve had the usual plethora of commentary from various officials overnight; “high sense of urgency”, “ready to act” etc. It does seem only a matter of time until we get another powerful intervention in the FX markets, it’s just a question of what they’ll do differently this time as doing the same again every few weeks simply isn’t sustainable. The question is whether the yen will surpass 150 against the dollar first. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. The mother of all U-turns - MarketPulseMarketPulse

The yen continues its movement to the target level of 150.00, formed by the price channel line of the higher (monthly) timeframe. A divergence is almost formed with the Marlin Oscillator. Even if the divergence intensifies a bit, the price still has the opportunity to reach the intended target. In general, the current technical picture tells us about the depletion of the USD/JPY pair's potential for growth. The Marlin Oscillator could no longer withstand the growth on the four-hour chart and rolled back down. This creates a basis for the formation of a divergence, for which the price should grow a bit more. So, the 150.00 growth target remains, the target levels of 147.38 and 145.30 are waiting.   Relevance up to 02:00 2022-10-19 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324556

Here is what you need to know on Tuesday, October 18: The US dollar resumes its bearish momentum on Tuesday, having lost the recovery momentum in the Asian session, as risk flows extend into the second straight day following the UK's dramatic U-turn over the tax-slashing mini-budget. The US S&P 500 futures, the risk barometer, is gaining roughly 1.70% so far while the Asian indices rally 1.20% to 1.80%, led by the rebound in the Chinese stocks. In early dealing, China’s stocks turned south after the country’s junk dollar bonds dropped to a record low, as a property market crisis sparked by a crackdown on excessive borrowing. Meanwhile, Chinese traders digested comments from US Secretary of State Antony Blinken. The US official said on Monday, China has made a decision to seize Taiwan on a “much faster timeline” than previously thought. Across the fx board, the Kiwi dollar emerges as the strongest heading into the European open, followed by its Antipodean partner, the aussie. Meanwhile, the yen pulled away from 32-year highs above 149.05 against the US dollar, dragged lower by weaker Treasury yields and Japanese verbal intervention. Top Japanese officials continued their jawboning, reiterating that they are ready to take necessary steps to avoid undesirable, as they watch the FX price action with a sense of urgency. USD/JPY was last seen trading around 148.85, consolidating the upside before the next push higher. NZD/USD surges over 1% to challenge 0.5700, as hotter New Zealand’s Q3 Consumer Price Index (CPI) ramped up bigger RBNZ rate hike expectations. NZ inflation rose by 2.2% QoQ in the third quarter, beating expectations of a 1.6% increase. Meanwhile, the annualized inflation eased from a 32-year high of 7.3% to 7.2%, although outpaced expectations of +6.6%. Hawkish comments from RBA Assistant Governor Michele Bullock and RBA minutes underpin the sentiment around the AUD/USD pair, as they suggest the need for more rate increases in the coming months. EUR/USD also capitalized on retreating Treasury yields and a renewed broad-based US dollar selling, having recaptured the 0.9850 barrier. Although bulls remain cautious ahead of the German and Eurozone ZEW sentiment surveys. Germany’s Economy Minister Robert Habeck said on Monday that “with fiscal policy in place, they can avoid deep recession in Europe without fuelling inflation.” GBP/USD is fading an uptick above 1.1400, as investors assess the Financial Times (FT) report that stated the Bank of England (BOE) is set to delay quantitative tightening (QT) worth £838bn until bond markets calm. The report comes after the new UK Chancellor Jeremy Hunt ditched almost all of the mini-budget announced by PM Liz Truss on September 23. The gains in cable appear short-lived, as PM Truss braces for political challenges, with Tory backbenchers preparing to oust her. Gold is holding its recovery momentum above the $1,650 barrier but is likely to remain in a defined range until buyers reclaim the critical $1,670 hurdle. The softer dollar keeps lending support to the metal. Bitcoin price is gradually pushing higher while above $19,500 but bulls stay cautious amid a wall fall of healthy resistance levels on a daily timeframe.

Despite the current overbought conditions in USD/JPY, a test of the 150.00 still remains on the cards, note UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia. Key Quotes 24-hour view: “Yesterday, we held the view that ‘overbought advance in USD could extend above 149.00 but major resistance at 150.00 is unlikely to come into view’. USD subsequently rose to a high of 149.08. While upward momentum has improved, the advance in USD has moved deeper into overbought territory. However, as long at 147.75 is not breached (minor support is at 148.30), USD could continue to rise. That said, the major resistance at 150.00 is still unlikely to come into view (minor resistance is at 149.50).” Next 1-3 weeks: “There is not much to add to our update from yesterday (17 Oct, spot at 148.50). As highlighted, conditions are deeply overbought but further USD strength to 150.00 is not ruled out. Overall, only a breach of 147.20 (‘strong support’ level was at 146.60 yesterday) would indicate that USD is unlikely to strengthen further.”

China's 20th Party Congress remains in focus - delays to data  In this article Macro outlook What to look out for: RBA minutes and China's Communist Party Congress Source: shutterstock Macro outlook Global markets: US stocks erased their losses from Friday’s session, opening higher and then trading quite flat until the close. The S&P500 rose 2.65% and the NASDAQ was up 3.43%. Falling bond yields may have helped restore some confidence, and this may have been helped by tailwinds from the UK Gilts market, where new Chancellor, Jeremy Hunt, took an axe to the previous mini-budget and put the UK’s finances on a sounder footing. 30Y UK Gilt yields fell 40.2bp, the 10Y dropped 35.7bp and 2Y Gilt yields declined by 33.3bp. 10Y European government bond yields declined by about 8bp on average, while the 10Y US Treasury yield was down just 0.8bp. Equity futures suggest that the positive tone will persist into today’s trading, and this could help lift the EUR further. EURUSD rose to 0.9843 yesterday from about 0.972 and could be buoyed further if risk sentiment holds up. The AUD is trading just below 63 cents, after touching 0.6189 briefly yesterday. Cable has recovered all the way to 1.1356, though it looked as if it might hit 1.145 at one point yesterday. But the JPY seems to be looking at further weakness, missing out on the G-10 rallies, and edging ever closer to 150. The BoJ will be getting anxious after their recent jawboning seems to have fallen on deaf ears.  Asian FX has lagged behind the G-10 rally, and will likely pick up the slack today. Yesterday, the VND was the weakest of the Asia pack, dropping as the central bank widened the trading band to 5% (from 3%) on either side of the fixing rate. G-7 Macro: It is very quiet on the G-7 calendar today. Germany’s ZEW business survey is probably the main pick of the day. The expectations component of the survey is not far above the Global Financial Crisis low of -63.9, and could well push below that today. The consensus expects it to fall to -66.5. China: There are some delays to the economic data scheduled for release during the Party Congress. These include the customs export and import numbers, which were scheduled for release yesterday, as well as GDP, retail sales, industrial production, and fixed asset investment, which were previously scheduled for release today. We aren't concerned that the release in the data is because it is particularly weak. Although we don’t expect it to paint a particularly positive picture of the Chinese economy when it is eventually released. Rather, the delay suggests that the government believes that the 20th Party Congress is the most important thing happening in China right now and would like to avoid other information flows that could create mixed messages.   What to look out for: RBA minutes and China's Communist Party Congress New Zealand inflation (18 October) Australia RBA minutes (18 October) China GDP and activity data (18-31 October) US industrial production (18 October) Malaysia trade balance (19 October) US building permits and housing starts (19 October) Fed’s Bostic and Kashkari speak (19 October) Japan trade balance (20 October) Australia labour market data (20 October) China loan prime rate (20 October) Taiwan export orders (20 October) Bank Indonesia policy meeting (20 October) US initial jobless claims (20 October) Fed’s Evans, Bullard and Kashkari speak (20 October) New Zealand trade balance (21 October) Japan CPI inflation (21 October) South Korea advance trade data (21 October) Fed’s Jeferson, Cook and Bowman speak (21 October) TagsEmerging Markets Asia Pacific Asia Markets Asia Economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

USD/JPY has edged higher today and is currently trading at 149.17. The yen has fallen for eight straight sessions, losing 500 points in that time. Yen slide continues The yen continues to set new 24-year-old lows as the dollar/yen has pushed above the 149 line. This is a higher level than when the government intervened last month, which marked the first intervention since 1998. Officials have reacted to the yen’s latest slide with familiar verbal rhetoric. Bank of Japan Deputy Governor Masazumi Wakatabe has said that the yen’s recent fluctuations were “clearly too rapid and too one-sided”. Wakatabe added that there was no contradiction between currency intervention to prop up the yen and the BoJ’s ultra-low interest rate policy, which has been the driver of the yen’s poor performance this year. Prime Minister Kishida said on Saturday that the BoJ would have to maintain policy until wages rose, and the BoJ has not shown any signs of rethinking its policy, even with the yen sliding and inflation remaining above the central bank’s target of 2%. Japan’s core CPI rose 2.8% in August, the fifth straight month that it has exceeded the 2% level. The key question is whether the government again step in and intervene in the currency markets. The first intervention clearly didn’t achieve its desired effect of stabilizing the yen below 145 and Japan’s foreign reserves fell by a record amount in September, around 2.8 trillion yen. The game of cat-and-mouse between the government and speculators betting against the yen continues, and another currency intervention could be in the works, but it would likely have to be much larger than the first intervention in order to have a more lasting effect. . USD/JPY Technical USD/JPY faces resistance at 150.04 and 151.32 There is support at 148.85 and 147.58 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Asian stocks were flashing green on the second day of trading, while Europe is poised to open in a similarly positive manner as sentiment continues to improve, albeit from very low levels. There’s still a strong feeling of a bear market rally about trading over the course of the last week. From the post-US-inflation rebound to what has now been a strong start to the week – in part driven by the UK’s decision to no longer shoot itself in the foot – nothing about this screams sustainable. Of course, the last couple of months have been tough for equity markets since peaking towards the end of the summer and a rebound of some kind was going to happen eventually. I’m just not convinced there’s much substance behind it as the economic landscape looks treacherous and we don’t even know if we’re at peak inflation and interest rate pricing yet. Those are substantial headwinds that will make any stock market rebound extremely challenging. RBA concerned about the outlook as it slows the pace of tightening The RBA minutes, along with comments from Deputy Governor Michele Bullock alluded to the outlook as contributing to the decision to slow the pace of tightening at the last meeting to 25 basis points. While the central bank will continue to hike rates in order to fight inflation – highlighting the broad-based pick-up in prices and higher wages – it’s clearly uneasy about the economic consequences and the lags in policy after hiking rates 2% over the course of four months since the summer. The Aussie dollar has not performed well in that time, falling around 15% from its June highs against the greenback, although it has rallied a little overnight. When will Japan intervene again? The yen remains under pressure despite desperate attempts by Japan to influence the currency markets through direct and verbal intervention. Last month’s intervention was substantial but short-lived and the commentary before and after has fallen on deaf ears. Overnight there was more of the same – “a high sense of urgency”, “will take appropriate action decisively” – and even a refusal to comment on whether the Ministry of Finance is conducting “stealth FX intervention”. If it is, it isn’t working particularly well, with the yen now very close to 150 against the dollar, a level that may make traders a little nervous. Another big intervention may soon be on the cards, although Japanese officials may be uneasy about the limited effectiveness of the last. What more can and will they do? The environment remains challenging Bitcoin has its sight set on $20,000 once more as it continues to bounce back from last week’s plunge. The sell-off occurred around the release of the US CPI data which could have sent it spiralling lower but risk appetite more broadly quickly bounced back and so did bitcoin. Whether it can continue to do so unless sentiment improves more sustainably is another thing. It continues to show resilience around $18,000 – $20,000 where it’s traded for most of the last couple of months but that may not be enough if risk appetite worsens again. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Summary:  We have seen some wild swings in risk sentiment in recent days, with the USD first jerked one way and then the other, all while the JPY continues to fall broadly and set new lows versus even a shaky US dollar today as it appears Bank of Japan governor is willing to go down with the YCC ship and longer US treasury yields remain pinned near the cycle highs. Elsewhere interesting relative moves in Aussie and kiwi overnight on dovish RBA minutes and a hot NZ CPI print. FX Trading focus: Whiplash for USD traders, JPY continues plunge. Yesterday saw a bizarre melt-up in risk sentiment that took the USD down a few notches. There was no readily identifiable trigger for the sentiment shift yesterday, which could be related to heavy derivatives exposure and stretched sentiment. Even for the relatively near term, it is hard to see a meaningful USD turnaround without anticipation that the Fed is set to ease up on its tightening message, with the chicken-and-egg dilemma that it will likely only do so once employment indicators (badly lagging) are headed clearly south. A considerable portion of the USD weakness yesterday was against sterling, with GBPUSD managing to back all the way up above 1.1400 in late trading. Sterling even made a bid at breaking through pivotal levels in EURGBP, although that move has been corralled for now (low near 0.8575 – trading well above 0.8700 as of this writing). It is interesting to see headlines attributing the latest sterling surge to FT sources indicating that the Bank of England will delay any attempt to do QT for now (The BoE pushed back against that story this morning). Sure, the recent sterling recovery was achieved as the new UK Chancellor reversed most of Truss’ budget-busting initiatives, and on the Bank of England bringing emergency liquidity and indicating it would be will to hike as much as necessary to stabilize markets at the next meeting. When you ease the liquidity crisis in the proverbial burning theater, sterling can stabilize. Stabilization will not necessarily lead to a strong new rally. As for the QT, it would be a sign of ongoing fragility if the BoE was to fail to carry out any QT for now, not a source of sterling strength. We may have seen the top in GBPUSD here unless this strange melt-up in risk sentiment extends. Elsewhere, interesting to note that despite a weak US dollar yesterday and into this morning, the Japanese yen remains resolutely weak, with new highs in JPY crosses and even USDJPY again today (although possible signs of intervention as I am writing today’s report – more in the chart discussion below). Bank of Japan governor Kuroda remains unmoved, arguing for no change in policy once again overnight and saying that inflation would eventually fall back even if currency weakness risked aggravating inflation levels and telling a lawmaker who asked that he resign that he has no plans of quitting. Have to believe the next round of intervention may be coming up soon for JPY crosses, but speculators may be smelling blood after the prior round failed to impress beyond a few hours, as noted below. Chart: USDJPYIn posting a USDJPY chart today, I was originally going to ask whether intervention is on the way, given we were posting new highs in USDJPY this morning and nearing the 150.00 level. Then, what might be intervention or what might be a nervy market over-reacting to large transactions materialized suddenly, with all JPY crosses dipping suddenly and violently, only to recover much of the lost ground within minutes. Official intervention would more likely have driven a larger move. Let’s recall what happened the last time the BoJ intervened a few weeks ago, when USDJPY challenged above the important 145.00 area resistance at the time: an initial low was posted within an hour just below 141.00 and then a few hours later that low was slightly exceeded before the rebound back to more or less unchanged within two days. Working against the intervention efforts was a fresh rise in global bond yields at the time – a factor that will continue to overwhelm any intervention efforts as long as long yields stay here or run higher still. But safe to say that the threat of official intervention makes tactical trading a risky business. Source: Saxo Group An interesting session overnight for AUDNZD as the RBA minutes highlighted concerns that the steep pace of rate tightening in this cycle will heavily impact the Australian consumer, particularly as floating rate mortgages reset in the months ahead. In New Zealand, the release of the much hotter than expected Q3 CPI data jolted RBNZ rate expectations sharply higher, with solid odds now for the first 75 basis point move for the cycle from the RBNZ next month. AUDNZD pounded lower overnight, trading well below 1.1100 at times, but I wonder how much more the market can get out of this correction. I still see the relative current account trajectory as an important factor – will look for support to come in soon as the rate spread likely can’t get much more stretched in the kiwi’s favour and shouldn’t matter that much in the mix anyway. Table: FX Board of G10 and CNH trend evolution and strength.Awaiting the USD status again after this latest sell-off as the secular rally remains intact – would have to see above 0.9900 and even parity in EURUSD and USD weakness elsewhere to suggest a larger scale consolidation afoot. Note the CNH level in USDCNH terms as the action remains pinned in the 7.20+ area there and USDJPY applies further pressure to USD/Asia. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Interesting to see if GBP rolls over now to weakness in GBPCHF, EURGBP and GBPUSD terms. GBPUSD just flipped to positive as of yesterday’s close, but hasn’t broken above 1.1500 resistance – the chart is neutral within this range and tilts more negative back below 1.1000 again. Elsewhere, NOKSEK could be set for a challenge lower after an interesting sell-off today – trend is neutral and awaiting new momentum. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1215 – Canada Sep. Housing Starts 1315 – US Sep. Industrial Production 1400 – US Oct. NAHB Housing Market Index 1600 – ECB's Schnabel to speak 2130 – US Fed’s Kashkari (voter 2023) to speak Source: FX Update: Whiplash for USD traders, JPY remains in dumps. | Saxo Group (home.saxo)

Technical analysis: USD/JPY has been trading upside as I expected and the price is heading towards first upside objective at 150.00/ Trading recommendation: Due to the strong upside pressure and the breakout of the most recent range, I see potential for bigger growth. Watch for the potential buying opportunities on the intraday dips with the upside objectives at the price of 150 and 159 Stochastic oscillator is showing fresh bull cross, which is strong sign that buyers are in control. Key support is set at the price of 148.70   Relevance up to 06:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297393

The Bank of Japan (BOJ) board member Seiji Adachi is back on the wires this Wednesday, noting that “recent yen fall are very rapid,” which “could heighten uncertainty for firms planning capex.” Additional comments “Japan's consumer inflation may accelerate quite rapidly in Oct.” “Japan's inflation to remain high for some time early next year.” “Don't see immediate need to take additional steps to address worsening functioning of JGB market.” Market reaction These comments have little to no impact on the Japanese currency, as it resumes its drop versus the US dollar in early Europe. The pair is trading modestly flat at around daily highs of 149.30, as of writing.

Summary:  Better-than-expected corporate results boosted US stocks for the second day. Afterhours Netflix shares rose 14% on reporting better than expected results. Oil prices fell 3% with the US said to release more strategic petroleum reserves on supply concerns. Gold advanced. Floods hampered commodity production numbers in Australia. RBA notes loan arrears and insolvencies are rising. Mercedes-Benz launched new EV models that rival Tesla’s Model Y. Rio Tinto sees lithium tightness. What’s happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) indices rally for the second day  US stocks extended their gains in choppy trading, with the S&P500 gaining 1.1% and now up 3.8% in two days after continuing to rebound from nearly oversold levels, before closing at 3,719.98 points (its highest level in 8-days) on better-than-expected corporate results. All 11 sectors of the S&P500 gained, with Industrial, Materials, Utilities, and Financials leading. Defense giant, Lockheed Martin (LMT:xnys) shares gained the most since 2020, up 8.7% after its earnings per share topped estimates. Goldman Sachs (GS:xnys) rose over 2%, with stronger trading results helping the investment bank beat quarterly earnings and revenue expectations. Goldman’s results continued a strong stretch of bank earnings, including beats from Bank of America (BAC:xnys) and Bank of New York Mellon (BK:xnys) on Monday, with the financial sector outperforming on Tuesday. Meanwhile, Afterhours, Netflix (NFLX:xnas) shares rose 14% after reporting better than expected results, adding 2.4 million customers in the 3Q, beating expectations. The rally was also supported by the Bank of England calming nerves saying, the funds whose vulnerabilities also fueled the rout in UK markets have now raised tens of billions of pounds in capital, and as such are on a more sustainable footing. U.S. treasury (TLT:xnas, IEF:xnas, SHY:xnas) ended Tuesday little changed Treasuries finished a choppy session with yields largely staying near the levels from the day before. The 2-year yield was 1bp richer at 4.43% and the 10-year yield was unchanged at 4%. U.S. economic data were mixed with stronger industrial production in September but a below-expectation read in the NAHB Housing Market Index. Contrary to a Financial Times report suggesting the Bank of England would delay its quantitative tightening program, the U.K. central bank announced later in the day that it will start bond sales on Nov 1 but not including long-dated bonds initially. Australia’s ASX200 (ASXSP200.1) rises 0.3%, with lithium stocks charging, while energy companies retreat after the oil price fell 3%. The Australian share market trades 0.3% higher on Wednesday (1.5 hours into the seesion) with lithium stocks like Pilbara Minerals, (PLS), Allkem (AKE) up over 3% (for more on lithium see below). Meanwhile, the energy sector is capping broad market gains, with selling in oil stocks taking the energy sector down 1.6% after the oil price fell 3.1% to $82.82, with the US said to release emergency crude on supply concerns. Meanwhile losses in oil stocks are somewhat limited with OPEC+ members defending their supply cuts, saying they are justified by the growing risk of a global recession. Woodside (WDS) trades 1.7% down. Beach Energy (BPT) is down the most in the sector, 4.6%, after reporting production dropped amid flooding. The best performing stock on the ASX this year, Whitehaven (WHC) trades 2.2% lower today after announcing production fell 37% last quarter, with total equity sales down 32% compared the June quarter. Whitehaven Coal’s CEO said he sees demand for high quality coal continuing to outstrip global supply, which will likely continue to support coal prices. The coal price has fallen 3% this month, and is now down 15% from its all-time high. Meanwhile, gold stocks are also in focus after Gold prices steadied after the US dollar continued to fall. However St Barbara (SBM) shares are 6.2% lower after the miner cut its gold output forecast for the year, which disappointed analysts. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Hong Kong stocks rallied, with Hang Seng rising 1.8%, following the move higher in U.S. equity index futures on reports that the Bank of England was delaying its quantitative tightening due to start at the end of October. The Bank of England denied the story later. HSBC (00005:xhkg) and Standard Chartered (02888:xhkg) gained more than 2.5%. BYD (01211:xhkg) surged 6.4% after the leading EV maker said its Q3 profit was set to rise as much as 365% Y/Y, lifting most other EV makers 3%-5% higher in share prices as well. Healthcare names surged again, with Ali Health (00241:xhkg) up 9.4%, Hansoh Pharmaceutical (03692:xhkg) up 5.9%, CSPC Pharmaceutical (01093:xhkg) up 4.5%, Sino Biopharmaceutical (01177:xhkg) up 4% and some biotech stocks soared more than 10%. Chinese airlines stocks gained from 2% to 3% after some Chinese airlines, including China Eastern Airlines and China Southern Airlines, announced the resumption of some more international flights. CSI300 ended a choppy session losing 0.2%. USDJPY climbed to 149.37, the highest level since 1990, and oil price fell to USD83.70 The Yen weekend to 149.37 with the 150 figure in sight. EURUSD, at 0.9850, and GBPUSD, at 1.1330 were little changed from Monday. NZDUSD was the notable outperformer among the G10 currencies, rising to 0.5690 while USDCAD underperformed as oil prices slumped, WTI crude fell 2% to USD83.70 on the report that the Biden administration has approved to release of more strategic petroleum reserves. What to consider? Stronger-than-expected industrial production but a softer NAHB Housing Index U.S. September industrial production came in at +0.4% M/M, (vs consensus: 0.1%, Aug: -0.1% revised) and capacity utilization increased 0.2pp to 80.3%. NAHB Housing Market Index fell to 38, below 43 expected and 46 in August. RBA sounds alarm that rate hikes could soon pause with loan arrears and insolvencies rising The Aussie dollar rose for the 3rd day after the after the USD continued to lose strength when the UK re winded some tax cuts. However, the outlook for the Australian dollar against the US remains restricted, with the RBA noting loan arrears and insolvencies have picked up in Australia. Yesterday's RBA Meeting Minutes highlighted the RBA has little room to rise rates, without compromising the health of the economy. The RBA was only able to raise rates by 0.25% this month, as business insolvencies had picked up, plus a low level of loan arrears were seen, while housing loan commitments declined -  ‘demonstrating the effect of high interest rates on housing’. Lithium sector news; Mercedes-Benz launches new EV that rivals Tesla’s Model Y. Rio Tinto sees lithium tightness Mercedes-Benz (MBR) broadened its electric vehicle range on the eve of the Paris car show; unveiling a new sporty vehicle that’s US$4,300 cheaper than Tesla’s Model Y, with Mercedes selling the EQE SUV later this year for US$68,000. The new sporty EV Merc also has a 590 kilometres range, means it travels 76 kilometres more than Tesla’s Y Model. Mercedes also plans to offer EV versions of all of its vehicles by the end of this year. And aims to only sell EVs by 2030, particularly in markets phasing out fuel engines. Also in Lithium news yesterday, Rio Tinto (RIO) said the lithium market is experiencing tightness, while demand continues to strengthen from government policies, and EV producers rolling out new models. Lithium carbonate prices remained elevated in the quarter after Power rationing in China’s Sichuan province (a key lithium supply hub) also led to production cuts. Also, Australia’s biggest pure play lithium company Pilbara Minerals (PLS) sold spodumene concentrate at a new record high price, equating to $7,830 a ton.     For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-19-oct-19102022

JPY continues to slowly but surely fall in price against the USD. The risk of intervention keeps the dollar bulls from sharp movements so far, but soon the yen may be in the epicenter of a hellish funnel. The dollar is pushing Since January, the yen has fallen against the US currency by more than 23%. The reason for such a sharp drop lies on the surface: the Bank of Japan remains true to the dovish policy, and the Federal Reserve has taken an active hawkish stance this year. To curb the record high inflation that hit America, the Fed has already held 5 rounds of interest rate hikes since March. Moreover, the indicator was raised by 75 bps three times. In light of the latest higher-than-expected US inflation data, the market expects the central bank to announce another 75 bps rate hike in November. The probability of such a scenario is estimated by traders at almost 100%. This provides strong support for the greenback, especially when paired with the yen. The Japanese currency looks very hurt right now, as it feels additional pressure from the BOJ. The head of the BOJ literally drowns the yen every day with his marginal comments. This happened yesterday as well. BOJ Governor Haruhiko Kuroda once again confirmed his determination to stick to an ultra-soft policy, despite the total tightening trend. He stressed that the central bank will maintain its status quo until the nature of inflation in the country becomes stable. The combination of hawkish sentiment from the Fed and dovish statements from the BOJ pushed the USD/JPY pair to a new record. On Wednesday night, the dollar tested another 32-year high against the yen at 149.395. Japan clenching its fists The main goal for dollar bulls right now is the key mark of 150. However, as we approach it, the risk of foreign exchange intervention by the Japanese authorities increases significantly. Not a day goes by without Japan accusing speculators of overshooting the yen and threatening them with re-intervention in the market. Recall that in September, the Japanese government for the first time in 24 years decided to support its national currency and carried out a large-scale intervention. Some analysts believe that fear of a repeat of this scenario is keeping dollar bulls from hitting the psychologically important 150 threshold. According to many traders, the red line is at this level. However, the Japanese authorities have repeatedly stated that they will be forced to press the button not by any specific mark, but by the rapid fall of the yen. Be that as it may, the 150 barrier still remains unassailable for bulls on the USD/JPY pair. And there is one curious opinion why this happens. Currency strategists at Bloomberg suggest that it is not at all the caution of investors who fear repeated intervention. The reason for this is the covert interventions that Japan is already carrying out with might and main. Experts were prompted to such an idea by sudden surges in the strengthening of the yen, which have already been noted twice in the past few days. For example, yesterday the JPY showed a slight recovery for no particular reason. Analysts believe that this was the result of the intervention. Recall that last month Japan's Vice Minister of Finance for International Affairs Masato Kanda warned of possible covert interventions. Such a move usually involves intervention in the market on a smaller scale, which is difficult to detect. USD can no longer be contained Hidden or officially recognized, insignificant or as large as last time, any intervention from Japan is no longer able to change the downward trend in the yen. Traders are well aware of the strong bilateral support the dollar currently has against the Japanese currency: the BOJ continues to go dovish, and the Fed may well accelerate even more on its hawkish path. That is why many analysts do not even doubt that in the next few days the USD/JPY pair will finally break through the resistance at around 150. And as we approach the Fed's November meeting, the asset is likely to open a new breath. If the market's hawkish expectations rise, the yen risks entering another tailspin.   Relevance up to 07:00 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/324712

Summary:  Today we look at another choppy US equity market session, with a fresh rally attempt in late trading on far better than expected Netflix results and guidance. That rally is unlikely to persist as long as US treasury yields continue to set new highs for the cycle, as they did briefly this morning. The very weak JPY and fresh CNH weakness are key topics in FX as we also look at the key earnings coming up on our radar, especially Tesla. This and much more on today's pod, which features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-oct-19-2022-19102022

USD/JPY continues to inch upwards and is trading at 149.69, up 0.31%. Yen closing in on 150 The yen hasn’t managed a winning session since October 4th and it’s looking likely to breach the symbolic 150 level, perhaps before the week is over. The yen hasn’t traded at such low levels since 1990 and a turnaround from its prolonged slide doesn’t appear likely. The Bank of Japan has been under pressure to rethink its ultra-loose policy, as the yen has plummeted and inflation has climbed above the Bank’s 2% target. Earlier today, BoJ member Seiji Adachi poured cold water on hopes that the BoJ will change course, saying that risks to the economy and volatile financial markets precluded any shifts towards monetary tightening. Governor Kuroda echoed this stance, saying that the weak economy required massive stimulus. The BoJ has fiercely defended its yield curve control, maintaining a cap of 0.25% on 10-year government bonds. What about the yen’s downturn? With the BoJ defending its policy, the ball is in the court of the Ministry of Finance (MoF). The MoF dramatically intervened in late September to prop up the yen after it fell below 145, but the move did little more than slow the yen’s descent for a few days. Another intervention is possible, but it would have to be on a larger scale to have any substantial effect on the exchange rate. Finance Minister Suzuki has warned that the government would “properly respond” in the currency markets, but increasingly, the verbal bullets out of Tokyo are being viewed as blanks. Japan releases Core CPI for September, which is expected to rise to 3.0%, up from 2.8% in August. Inflation has been moving steadily higher, but the release is unlikely to have any effect on the BoJ’s monetary stance. . USD/JPY Technical USD/JPY is putting pressure on resistance at 149.81. Above, there is resistance at 151.32 There is support at 149.09 and 147.58 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Trading is mixed in Europe on Wednesday, with Wall Street eyeing a slightly stronger open amid bumper Netflix earnings. Netflix is a hit Netflix results are expected to be a hit on Wall Street when the bell rings on Wednesday, with pre-markets pointing to a more than 13% rally in the stock. The streaming company reported revenues and earnings that comfortably surpassed expectations, while subscriber growth more than doubled forecasts. That was largely driven by the Asia-Pacific region which will become increasingly important for growth in the coming years. The company will continue to crack down on password sharing going forward, while the ad-supported plan will hope to draw in additional subscribers. After a tough year, things may be looking up for Netflix. UK inflation back in double-digits Inflation in the UK surpassed 10% again in September, slightly beating market expectations and further fueling concerns about the cost of living crisis and the role of the Bank of England in reining in rapid price increases. Naturally, all of this has been complicated by the political soap opera over the past few weeks, something the new Chancellor, Jeremy Hunt, has sought to calm by abandoning almost the entire controversial mini-budget. But inflation is still a problem, regardless, and the BoE will have to be very aggressive at upcoming meetings in order to try and get a grip of it. Markets are now undecided between a 75 and 100 basis point hike on 3 November but are quite confident that Bank Rate will end the year at 4% either way. With inflation now broad-based and fuel even offsetting some of the larger price increases, the worry is that these forecasts may prove too optimistic. ​ Intervention talk ramps up as USDJPY nears 150 Japan remains in focus as the dollar closes in on 150 against the yen. The threats of intervention have been coming thick and fast and many are wondering if 150 could be the point at which the Ministry of Finance pushes back once more. The last intervention wasn’t particularly successful, with the benefits unwinding in a matter of days. The question now is when they’ll jump back in and how forceful they’ll be. The message is clearly falling on deaf ears at the moment. Continuing to fluctuate Bitcoin continues to consolidate, with the recent rebound failing once more around $20,000. That level was once believed to be hugely significant as support but the reality is that it has simply become the point at which the price fluctuates around. That will change eventually but we’re now two months into that broadly being the case so there’s little to suggest it’s imminent. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The yen hit an important target at 150.00 (this morning's actual high of 149.96). In addition to being a round number, the target is defined by an embedded monthly timeframe price channel line. Above it are levels with increased frequency, approximately every 80 points. There were rumors again on the market that the Bank of Japan is preparing another intervention. The technical component also indicates to us a high probability of a price reversal during the formation of a divergence with the Marlin Oscillator. We believe that this is the main scenario for further developments. The nearest target in this case will be the price channel line in the area of 147.40. A divergence is also preparing to form on the four-hour chart. We will find out later this evening whether the reversal will take place or not.     Relevance up to 04:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324785

This morning, reports from Asia and the Pacific appeared. Traders also are now looking at macro data from the US - Philly Fed Manufacturing Index, the usual weekly data on initial unemployment claims, and data on existing home sales. Japanese Trade Balance (Sep) Japan provided data on exports and imports, and thus on its balance sheet, at the start of the day. The current reading is positive and shows an improvement in the trading result. The current reading is higher than the pronosed -2.167.4B and is at the level of -2.094.0B. For more than a year, Japan has been importing more than exporting, and since May the situation has worsened significantly. The balance then decreased from the level of -842.8B to the level of -2,384.7B. In the following months, the result was above the level of 1,000.0B. This situation is unfavorable for the country, so the current positive reading has a significant impact on the Japanese currency (JPY). Source: investing.com This positive trade result was largely influenced by the positive export performance. The published report shows that exports increased from 22% to 28.9%. He was taller than expected. This is the lowest result during the year. Source: investing.com Australia labor maket reports Australia today presented the result on the appearance of the labor market. The number of employees and the unemployment rate are instances of the country's conditions in this sector. Despite a rebound from the negative area in the previous reading, the number of people employed in September fell to 0.9K. The index scores for the year are generally in a downward trend. The decline will begin in the first half of the year, and the lowest level was in April at 4.0K. It then doubled and the annual peak was at 88.4K. The unexpected drop below zero occurred in the month following the highest score. Therefore, the positive reading from the previous period was significant for the economy. The current reading may weaken not only the economy but also the Australian dolar (AUD). Source: investing.com People's Bank of China Loan Prime Rate The positive news for the Australian labor market is that the unemployment rate remains at 3.5%. Another reading showed that this indicator holds up once again. People's Bank of China Loan Prime Rate will remain at 3.65% for the third time. EU Leaders Summit The most important event of the day for europe is Leaders Summit . The Euro Summit brings together the heads of state or government of the euro area countries, the Euro Summit President and the President of the European Commission. This meetings provide strategic guidelines on euro area economic policy. The comments made at this meeting may give a signal about future decisions, which at the moment are very important not only for the economy but also for the market. US Initial Jobless Claims Every weekly report on the number of individuals who filed for unemployment insurance for the first time during the past week will appear at 14:30 CET. Another increase is expected. The projected number of applications is at the level of 230K. This means that the indicator will be in an uptrend for the second week in a row. Philadelphia Fed Manufacturing Index The Philadelphia Federal Reserve Manufacturing Index rates the relative level of general business conditions in Philadelphia. The last picture of conditions is negative. It has been at a very low level since May, falling below zero levels. The latest reading was at -9.9, expected to rise to -5.0. This is a small but important improvement in conditions. The general appearance is negative. US Existing Home Sales Another important report for the US market is the change in the annualized number of existing residential buildings that were sold during the previous month. The outlook for this indicator is pessimistic. The number is expected to drop from 4.80M to 4.70M. Despite the economic situation, the index remained above 5.0M for a significant part of this year. The first drop below this level took place in July (4.81M). In August, it fell slightly to the level of 4.80M. Another decline may signal a deepening of the downward trend. This means that home sales deteriorate significantly. Source: investing.com Summery 1:50 CET Japan Exports (YoY) (Sep) 1:50 CET Japan Trade Balance (Sep) 2:30 CET Australia Employment Change (Sep) 2:30 CET Australia Unemployment Rate (Sep) 3:15 CET PBoC Loan Prime Rate 12:00 CET EU Leaders Summit 14:30 CET US Initial Jobless Claims 14:30 CET Philadelphia Fed Manufacturing Index (Oct) 16:00 CET US Existing Home Sales (Sep) Source: https://www.investing.com/economic-calendar/

Gold rose during today's Asian trading session. This bullish momentum can be taken as basis when entering the market. Since a three-wave pattern (ABC) developed, where wave "A" represents the buying pressure, traders can enter the market by taking long positions to the 50% retracement level. Stop loss could be set at 1624, then exit the market on the breakdown of 1635 and 1683. This reversal is not accidental, but caused by USD/JPY testing the important psychological level of 150, which was prompted by the currency intervention of the Bank of Japan. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324831

USD/JPY continues to gain ground USD/JPY is almost unchanged today but hit a milestone in the Asian session as it briefly darted above the 150 line, which has psychological significance. This marked the yen’s lowest level since August 1990 as the currency continues to slide. The yen hasn’t recorded a winning session since October 4th and has plunged about 600 points during this period. Later today, Japan releases Core CPI for September, which is expected to rise to 3.0%, up from 2.8% in August. Read next: Tesla Does Not Say Much Directly About The Demand Situation, Ally Financial Sees A Slowdown In Car Loans| FXMAG.COM The Bank of Japan holds its policy meeting next week, but it seems unlikely that it will change its ultra-loose policy. The yen is sinking and inflation is above the Bank’s 2% target, but the central bank is fixated on continuing to provide massive stimulus in order to support the weak economy. Earlier today, Japan’s 10-year government bonds breached the 0.25% cap which the BoJ has fiercely defended, rising as high as 0.264%. The BoJ has responded with an emergency bond-buying package in order to bring yields back below 0.25%. With the BoJ defending its policy and ignoring the yen’s descent, the ball is in the court of the Ministry of Finance (MoF). The MoF dramatically intervened in late September to prop up the yen after it fell below 145, but the move did little more than slow the yen’s descent for a few days. Another intervention is possible, but it would have to be on a larger scale to have any substantial effect on the exchange rate. Finance Minister Suzuki has warned that the government would “properly respond” in the currency markets, but increasingly, the verbal bullets out of Tokyo are being viewed as blanks. With the Federal Reserve showing no signs of easing up on oversize rate hikes, the yen remains at the mercy of the US/Japan rate differential, which continues to widen. The yen’s prolonged downturn looks set to continue, with the currency likely to hit new lows. USD/JPY Technical USD/JPY is testing support at 149.81. Below, there is support at 149.09 There is resistance at 150.04 and 151.32   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY breaches 150 - MarketPulseMarketPulse

Summary:  Today we look at rising US treasury yields continuing to drive brutal headwinds for risk assets, even if the price action in equity markets was fairly sedate. Meanwhile, the currency situation is extremely spring-loaded around the 150.00 level in USDJPY, which traders are eyeing with concern on the risk of enormous volatility should we trade above that level - which US yields adding energy to upside pressure in the background. Today features Technical Strategist and chartist Kim Cramer Larsson, who takes us through the technical situation in US equities, the US 10-year treasury yield, USDJPY and more. John J. Hardy hosts. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-oct-20-2022-20102022

October 20, 2022  $USD, Australia, Canada, Currency Movement, Current Account, Japan, Turkey, UK, US Overview: China and Japan continue to struggle to stabilize their currencies, while global interest rates rise. The offshore yuan has fallen to new lows but in late dealings the onshore and offshore yuan have recovered. The dollar also traded above JPY150 for the first time since 1990 and the market knows it is on thin ice as with the threat of official intervention. A risk-off mood permeates. Equity markets have retreated in the Asia Pacific region and Europe. US futures are also trading lower. Benchmark 10-yields are 1-3 bp higher in Europe, and 10-year US Treasury yields reached a new high around 4.17% before steadying. The greenback is mixed. Among the G10 currencies, the Australian and Canadian dollars are firmer, while sterling, the Swiss franc, and Swedish krona are nursing small losses. Emerging market currencies are also mixed. Central Europe is outperforming East Asia. Gold recorded a new low for the month near $1622.50 before catching a bid. Initial resistance is seen near $1640. December WTI extended yesterday’s recovery and reached a new four-day high near $86.30. The nearby cap is seen in front of $88.00. Natural gas is snapping a four-day drop in both the US and Europe’s benchmark. Iron ore tumbled 2.4% to new lows below $90. However, copper is jumping back 1.4% in what could be its first gain in five sessions. December wheat, which has lost 2.3% over the past two sessions is recouping a little more than 1% today.  Asia Pacific The dollar rose above JPY150 for the first time since 1990 and there has been no sign of intervention. Ironically, the weaker yen is one of the factors pushing up Japanese yields, which in turn spurs BOJ purchases, which in turn underscore the monetary divergence that weighs on the yen. In regularly scheduled and unannounced purchases, the BOJ bought about JPY1.3 trillion today (~$8.5 bln). The yen's weakness aggravates the terms-of-trade shock in the first instance. Japan reported a slight narrowing of the September trade deficit to JPY2.09 trillion from JPY2.8 trillion. Export growth accelerated to 29% year-over-year from 22%, while import growth slowed to 45.9% from 49.9%. Tomorrow, Japan reports September CPI. The core rate, which excludes fresh food, is seen rising to 3%, while the measure that excludes both fresh food and energy may tick up to 1.8% from 1.6%. The BOJ meets next week. Its forecasts may change, but policy is a different story. Employment in Australia ground to a near halt in September, gaining less than 1000 jobs. This may overstate the case, a little. The loss of part-time positions more than offset the 13.3k increase in full-time posts. Still, the loss of momentum is clear. The three-month moving average of full-time posts is slightly negative the lowest this year. The other metric held in better. The participation rate was unchanged at 66.6%, and the unemployment was steady at 3.5%. The Reserve Bank of Australia meets on November 1 and is expected to hike the target rate 25 bp to 2.85%. The dollar poked above JPY150 in early European turnover and quickly fell back to about JPY149.70. It just as abruptly snapped back to the JPY149.90 area. The market knows it is tempting official action and is skittish. Indeed, the entire session range was set in a little more than 30 minutes. Without international cooperation, we see BOJ intervention most likely confined to Tokyo hours and that the second operation will not yield the same results as the first. Late September's record intervention immediately knocked the dollar back about 5.5 yen. Follow-through selling initially saw the Australian dollar fall to a three-day low near $0.6230 before bouncing back to new session highs in the European morning near $0.6280. The intraday momentum indicators are getting stretched, suggesting a run to yesterday's highs around $0.6325 may be too much. The dollar traded to CNY7.2480 today, its highest level since late September. It pulled back a little away from the CNY7.25 level and is trading near CNY7.2360 in late turnover. The prime lending rates were left unchanged today. Even without the latest weakness of the yuan, a cut was not expected. The PBOC lifted the dollar's reference rate to CNY7.1188. That puts the upper end of the 2% band a little above CNY7.26. The greenback reached CNH7.2790 against the offshore yuan, a new high. It has pulled back to below the CNH7.2550 area. Europe Out of the frying pan, into the fire. So goes the UK Prime Minister whose honeymoon may be measured in hours. Her tenure is still be debated. It is not about economic policy so much anymore, as Truss has accepted the reversal of her fiscal experiment. She did not win the leadership challenge among the Tory parliamentary members, but their job was to narrow the field to two candidate and let the rank-and-file decide. And chose they did. Now, a new effort by the MPs to force her out short of an election, which polls say the Conservatives are sure to lose. Meanwhile, Home Secretary Braverman was forced to resign after violating cabinet confidentiality. Braverman was a candidate herself party leader but was knocked out early. Her resignation letter was also a biting criticism of Truss. Ironically less than 24 hours earlier, in a rhetorical flourish, Braverman called the Labour Party and the Lib Dems, a "coalition of chaos, it's the Guardian-reading, tofu-eating wokerati."  Truss tried tightening the screws on a vote on fracking, Tory MPS were threatened with expulsion from the party if they voted against the beleaguered government and controversial issue even in some strong Tory districts. The Chief whip, the parliamentary enforcer resigned as did her deputy. And then in a dramatic reversal, it appears Truss persuaded them to retract their resignations to end a dramatic day. The eurozone reported a 26.3 bln euro August current account deficit. Like, Japan, the eurozone has experienced a significant terms-of-trade shock and a marked deterioration of its external balance. Consider that last August, the EMU recorded a 17.1 bln surplus, or that this year it has recorded an average monthly deficit of 9.2 bln euros compared with an average surplus of 28.3 bln euros in the first eight months of last year. The euro initially extended yesterday's losses to about $0.9755 before recovering to almost $0.9800, where options for nearly 2 bln euros expire today. We suspect that they have largely been neutralized, but today's high is about $0.9795. The intraday momentum indicators suggest there may be a little more upside potential, but the $0.9820 area looks like the best that can be hoped for today, barring new developments. Sterling has sulked to almost $1.1170 in the European morning. On the downside, there are options for GBP480 mln at $1.1145 that roll off today. If Truss does step down, we suspect sterling can bounce initially. While we suspect a major low is in place, a move above $1.15 would add credence to this view. More immediately, the $1.1250 area looks to offer the initial cap. Lastly, Turkey's experiment is set to continue. Despite CPI above 84%, the central bank is expected to cut its one-week repo rate by 100 bp (to 11%) for the third consecutive move. The lira is off about 28.5% this year, of which about 5% has been recorded in the past three months. America The Beige Book was unexpectedly dour. However, it did not deter the surge in US interest rates. The anecdotal report prepared for the November 1-2 FOMC meeting gave an overall sense of slowing activity and easing of some price pressures. Businesses were worried about demand. Several districts reported easing of labor market conditions. In broad strokes, here is a scenario, which seems to be gaining credence:  Q3 growth is a bit of catch-up the first half and most of the payback will be from trade. The US economy may nearly stagnate or worse over the next few quarters. Monetary and fiscal brakes are being slammed. Inflation is high but the year-over-year comparison has too long of a memory, as it were. US headline CPI rose at an annualized rate of around 10% in Q1 and Q2. It slowed to 2.0% in Q3. The Fed, as Bullard suggests, may front load more hikes this year and ratify market expectations (that he helped shape), meaning 75 bp moves in November and December. Frontloading takes on new meaning if one is in a hurry to get inflation down, so it is in a better position to act if when the economy warrants. The implied yield of the December 2023 Fed funds futures is about 17 bp below the implied yield of the September 2023 contract.  September housing starts reported yesterday were weaker than expected, slowing after jumping almost 14% in August. Existing home sales are on tap for today and they are expected to have continued to fall. January was the last month-over-month increase. Mortgage demand has cratered as one would expect. Also, the drying up of the refinance market also cuts into a source of income (consumption?) as previously, owners were often tempted to take out equity. Also, weekly initial jobless claims are rising again but the levels are modest. Still, looking ahead, it seems reasonable to assume the labor market conditions are likely to weaken. The October Philadelphia Fed survey may confirm the weak sentiment seen in the Empire State survey last week. The price sub-indices draw attention given the market's sensitivity to inflation. Four Fed officials have scheduled appearances, but only Hacker (around midday ET) may address the economic issues. Canada's CPI was stronger than expected and this sparked a new appreciation for the risks that the Bank of Canada delivers another three-quarter point hike next week. The headline rose slightly, and the market had expected a small decline. The year-over-year rate eased to 6.9% from 7.0%., not quite as much as expected. That said, the pace of inflation stopped cold in Q3. Consider, and CPI rose at an annualized pace of more than 13% in Q1 and almost 12% in Q2. Q3? Minus 0.4%. The average of the core rates was little changed because of the upward revision to the August series. In the swaps market the odds of a 75 bp move surged from almost 25% to 85%. That failed to give the Canadian dollar traction as the risk-off (proxy S&P 500) was the flavor of the day. For the third session, the US dollar has found offers above CAD1.38 that caps the greenback. A close below CAD1.3720, where the 20-day moving average is found, would be a cautionary note for the greenback. This moving average has not been violated on a closing basis for over a month. Without new US dollar strength, the 5-day moving average can fall below the 20-day moving average early next week. It would be the first time in two months. The greenback firmed to a marginal new high for the month yesterday against the Mexican peso near MXN20.1760. With a few exceptions, the MXN20.20 area has capped the dollar since mid-August. For those needing to buy peso, this area may be attractive. Initial support today is seen near MXN20.05-MXN20.10.    Disclaimer

USD/JPY picks up bids to renew intraday high near the multi-year top marked on Thursday. Yields remain firmer amid fears of high inflation, and recession. Japan’s Core CPI jumped to the highest in eight years, stronger for the sixth consecutive month. BOJ again plans for emergency bond buying but policymakers resist meddling in the market and defend buyers. USD/JPY stays mildly bid as it pokes the 32-year around 150.25-30 during Friday’s Asian session. In doing so, the yen pair rises for the consecutive 13 days while poking the highest levels since 1990 amid strong yields and the Bank of Japan’s (BOJ) defense of the easy money policy. It’s worth noting that Japan’s inflation data refreshed a multi-year high earlier in the day, which in turn exerted more pressure on the policymakers to intervene in the markets and safeguard the yen. That said, “Japan's core consumer inflation rate accelerated to a fresh eight-year high of 3.0% in September, exceeding the central bank's 2% target for the sixth straight month as the yen's slump to 32-year lows continues to push up import costs,” said Reuters. Following the data, Japanese Finance Minister Shunichi Suzuki said on Friday that authorities were dealing with currency speculators "strictly", as an extended sell-off of the yen kept markets on heightened alert for further dollar-selling intervention by Tokyo. Also, the BOJ announced emergency bond-buying operations for a second consecutive day and increase the amount of bonds it is buying for its scheduled operations, per Reuters. Elsewhere, US Initial Jobless Claims eased to 214K for the week ended on October 07 versus 230K expected and a revised down 226K prior. Further, Philadelphia Fed Manufacturing Survey Index dropped to -8.7 for October versus the -5 market consensus and -9.9 previous reading. Additionally, US Existing Home Sales rose past 4.7M expected to 4.71M but eased below 4.78M prior. Recently, Federal Reserve Governor Lisa Cook mentioned that ongoing rate increases will be required. Amid these plays, the US 10-year Treasury bond yields refreshed a 14-year high the previous day, around 4.22% by the press time. Also, the two-year US Treasury yields rose to the highest levels since 2007 before recently taking rounds to 4.62%. Further, Wall Street closed in the red following an initially upbeat performance while the S&P 500 Futures extend the previous day’s losses with 0.50% intraday downside at the latest. It should be noted that the escalating hawkish Fed calls, versus the BOJ’s dovish done, also underpins the USD/JPY pair’s upside momentum. That said, the CME’s FedWatch Tool suggests a near 98% chance of the Fed’s 75 bps rate hike. Moving on, any market meddling from the Japanese policymakers will be closely eyed and can trigger the USD/JPY sell-off. Until then, the bulls could keep the reins. Also important to watch will be the last dose of the Fed speakers’ comments before the blackout period preceding November’s Federal Open Market Committee (FOMC) meeting. Technical analysis Unless declining back below the six-month-old support line, around 149.70 by the press time, USD/JPY remains bullish.

Summary:  Equity markets feebly attempted another rally yesterday, but the headwinds of seemingly ever-rising yields proved too strong, sending the indices sharply back lower to the lowest close in three days. This is still a relatively firm performance, given the scale of the rise in yields. Elsewhere, the USDJPY 150.00 level only proved a barrier for about a day, as the weight of rising yields saw the price action spilling higher above this level, with no signs yet of fresh official intervention against JPY weakness.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Yesterday saw a session relatively like the prior one, as an early rally simply failed to find sustenance in the face of the ongoing grind higher in US treasury yields. Still, market sentiment seems remarkably quiet despite the strong headwinds of the 25-basis point jump in longer Treasury yields this week. Next week is an important one for equities as the earnings season hits its peak with most of the megacap companies in the US reporting earnings, with the price action currently buried in the middle of the two-week range ahead of today’s session. Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Hang Seng Index and CSI300 fluctuated in a narrow range and were down modestly. In Hong Kong, Chinese developers and China Internet stocks bounced. In mainland bourses, solar, wind power, education, nuclear power, and properties outperformed. General market sentiment is weak as U.S. bond yield risen to new highs and investors pondering the policy implications from the Chinese Communist Party’s National Congress. USD finds stride again on higher Treasury yields, USDJPY spilling above 150.00 The US dollar behaved rather oddly in recent sessions in trading sideways even as US treasuries continue to provide strong support for the currency. Hesitation yesterday from USD bulls may have been on concern that official intervention and choppy price action across USD pairs might await if USDJPY attempted to trade above the psychological 150.00 level. But that level fell late yesterday without any real fuss, trading nearly to 150.50. Still, while USDJPY moves are heavily correlated with the fresh rise in US Treasury yields, it’s interesting that another 50 basis point jump in long US treasury yields to new 14-year highs has not seen new cycle lows in EURUSD and many other USD pairs. Crude oil (CLZ2 & LCOZ2) Crude oil is among just a handful of commodities trading higher in a week that has seen another sharp jump in US bond yields drive down growth expectations. Crude and its related fuel products however continue to be supported by the risk of tightness driven by a period of supply uncertainty in the coming months as OPEC+ cuts supply, and the EU implements sanctions on Russian oil. In addition, uncertainty over Chinese demand as the zero Covid tolerance is being maintained and further incremental SPR sales of 15 million barrels will continue to weigh on prices in the short term. All developments, however, that are likely to keep crude oil rangebound for now, with Brent finding support below $90. Focus next week being earnings from six Big Oil companies, led by Exxon, Chevron and Shell. Gold (XAUUSD) Gold trades down 1.5% on the week close to key support at $1617, the September low and 50% retracement of the 2018 to 2022 rally. A second week of weakness being driven by an across the curve surge in US treasury yields with the ten-year yield rising 23 basis points on the week to 4.25%. Hawkish Fed comments and no signs of economic data showing the much-needed slowdown, has seen the market price in a Fed funds rate above 5% by early next year. The exodus from bullion backed ETFs has gathered pace this week as investors instead focus on increasingly attractive bond market yields, not least the two-year yield at 4.6% yield. Gold will likely continue to struggle until we reach peak hawkishness and/or the dollar starts to weaken. US treasuries (TLT, IEF) US treasury yields lifted all along the curve again yesterday, posting new highs for the cycle, with rises at the long end outpacing those at the short end, with the 2-10 inversion up to –37 basis points versus the cycle low below –50 bps in Sep and earlier this month. Traders are perhaps awaiting incoming data before trading shorter yields, now that the market has priced the Fed funds rate to reach above 5.00% by early next year (priced to do so at the March 2023 FOMC meeting). What is going on? UK Prime Minister Liz Truss resigned in a short statement yesterday … becoming the shortest serving Prime Minister in Britain’s history. She will stay in power until a new leader of the Conservative party can be chosen. The leading candidate is former Chancellor Rishi Sunak and other top contenders include Boris Johnson as the Conservative party has fallen to a record low in the polls against Labour. Japan inflation hits 3%, update to CPI forecasts expected next week Japan’s core inflation touched 3% levels for the first time in over 30 years, matching expectations. Headline inflation came in higher-than-expected at 3.0% y/y while core-core ex fresh food and energy) measure was up at 1.8% y/y from 1.6% y/y previously. The stark yen weakness can prompt further import price pressures in Q4 as well, and demand is likely to push higher as well with Japan reopening its borders from the pandemic restrictions. Bank of Japan meets next week, and while policy change is hard to expect, it is expected that the central bank will raise the CPI forecast for fiscal 2022 (year ending March) from 2.3% to high-2% range. UK Retail Sales volumes slide badly again in September Real (volume-based) sales were down for a second consecutive month at –1.4% MoM and –6.9% YoY, with the ex Petrol sales at –1.5% MoM and –6.2% YoY. China is considering reducing inbound quarantine The Chinese authorities are considering reducing the current 7 days in hotel plus 3 days at home quarantine requirement for people travelling into China to 2 days in hotel plus 5 days at home. While the move may be small in magnitude, and still not confirmed by the authorities, it may have signaling power in terms of more flexibility in the day-to-day implementation of the zero Covid policy which is constraining consumption, investment and tourism.Snap earnings send tech earnings fear soaringSnap (SNAP:xnys) plunged 26.5% in the after-hour trading, following the company reported Q3 revenues growth at 6% Y/Y, largely in line with street estimates, but said its internal forecast for the Q4 revenues growth is decelerating to about flat year on year (vs market expectations of +6% Y/Y). The social media company said that they are finding “advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven pressures, and rising costs of capital.” Gas prices in Europe and US see steep weekly declines US natural gas futures are heading for their longest stretch of weekly declines since 1991 as stockpiles continue to build at a faster than expected pace ahead of winter. The November (NGX2) front month contract trades down by 18% on the week and down 44% since the August peak, driven by mild autumn weather and rising production. In addition, the Freeport LNG export terminal explosion on June 8 has reduced exports, and the terminal will open in November at 85% capacity. In Europe, the TTF price trades down 10% has bounced strongly after almost reaching €100/MWh earlier in the week, a level we do not expect to be challenged until later in the winter when demand becomes more visible. With prices falling and almost full inventories, the political resolve to introduce a price cap has faded, hence the bounce. What are we watching next? US is considering national security reviews of Elon Musk business activities ... according to unnamed sources in a Bloomberg story. These would include the acquisition of Twitter and SpaceX’s Starlink satellite network. Musk has expressed his view on the war in Ukraine and investors in his Twitter takeover include Saudi and Chinese individuals. Tesla also has a strong presence in China, an awkward situation as the US has moved recently to cut off China’s access to advanced semiconductor tech. Market Fed rate expectations reach 5%, can they continue to rise? Early 2023 Fed rate expectations have now reached over 5%, with the Fed funds rate now fully pricing in a 75bps rate hike for the November meeting and a strong probability of another 75bps rate hike at the December meeting. While the Fed has reiterated it will continue to hike more next year before it pauses, market pricing is now running higher than the September FOMC dot plot forecasts. Some Fed speakers are starting to turn slightly cautious looking at the market pricing, with Charles Evans last night saying that if the Fed pushes its policy rate much further than planned it could start to weigh on the economy and says he is worried that at some point rate increases could have a non-linear impact with businesses becoming more pessimistic. Harker (2023 voter) and Cook reasserted that the Fed needs to continue to hike but will noted that the Fed can pause sometime next year to assess the impact of its tightening on the economy. Another fall in weekly jobless claims for the Oct 15 week continued to suggest labor market strength despite the disruptions from recent hurricanes. Earnings to watch Today’s earnings included the report from the world’s largest battery market CATL overnight, with a focus in the US session on consumer demand and consumption patterns in today’s American Express earnings report as well as the largest US oilfield services company Schlumberger. Today: CATL, American Express, Schlumberger, Verizon Communications, HCA Healthcare, Sika Economic calendar highlights for today (times GMT) 1230 – Canada Aug. Retail Sales 1340 – US Fed’s Evans to speak 1400 – Euro Zone Oct. Consumer Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-21-2022-21102022

Core CPI hits 3.0% Inflation in Japan continues to rise. Core CPI rose to 3.0% YoY in September, its highest level since August 1991. This was up from 2.8% in August and marks the sixth consecutive month that the indicator has been above the Bank of Japan’s target of 2 per cent. The 3.0% figure matched the consensus, and the response of the Japanese yen has been muted. The yen breached the symbolic 150 level on Thursday for the first time since August 1990, and barring another intervention from the Ministry of Finance (MOF), the downturn will likely continue. Finance Minister Shunichi said on Thursday that “excessive volatility in the currency markets must not be tolerated” and the government “remains committed to taking firm action against these moves.” This has all been heard before and these warnings are increasingly falling on deaf ears. The MOF did back up its rhetoric with action last month and intervened when the yen breached 145. The bold move did little to slow down the currency’s slide, however, and here we are at the 150 level. The Bank of Japan isn’t showing much interest in the yen’s fall, as it is committed to an ultra-loose policy in order to stimulate the weak economy. Governor Kuroda said on Wednesday that the yen’s rapid fall was “undesirable”, only to step in with an emergency bond-buying package the very next day in order to cap yields on Japanese government bonds. With moves like these, it’s hard to take Kuroda’s remarks about the yen seriously. Kuroda has insisted that the Bank will not alter its monetary policy until it is convinced that inflation is not transitory, and as we saw with other major central banks, that could take a long, long time. USD/JPY Technical USD/JPY is testing monthly resistance at 150.27. Next, there is resistance at 1.5132 There is support at 149.27 and 147.58 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen steady as inflation hits 31-year high - MarketPulseMarketPulse

Kyodo News Agency reports, citing sources, Japan aims to get cabinet approval for an economic stimulus package spending plan on October 28. The Japanese government and ruling coalition are considering state outlays of more than JPY20 trillion to fund the economic stimulus package, Kyodo reported. Market reaction Amidst the latest Japanese fiscal headlines and renewed US dollar strength, USD/JPY is seeing a fresh leg towards 151.00, fresh 32-year highs. The pair was last seen trading at 150.85, adding 0.48% on the day.

Summary:  After the last Japanese intervention, which coincided with the previous Bank of Japan (BOJ) meeting in September, eyes are on the next central bank meeting which is scheduled for next week. The tug of war between FX traders expecting no change in BOJ policy and bond investors continuing to test the central bank’s patience is in full swing. However, the expectation of peak Fed hawkishness makes BOJ’s choice easier. The pressure on Japanese yen There is unrelenting pressure on the Japanese yen, despite an official intervention from the authorities in September and constant verbal intervention. USDJPY rose past 150 for the first time since August 1990, and is on its way to closing the gap to the 160 high seen in April 1990. While intervention chatter remains loud, authorities have stayed away from claiming their presence in the markets given the limited impact their efforts are having. Market participants would likely be encouraged to challenge the yen further if it was confirmed that BOJ was intervening, and it isn’t having much of an impact. Further intervention fears will pick up as we head into the week of Bank of Japan meeting on 28 October and the FOMC meeting in the following week on 2 November. Not just USDJPY, but EURJPY and GBPJPY are also above the levels at which we saw previous yen intervention on September 22 (last BOJ meeting). The yen is only stronger against the AUD since that day. We have discussed here how intervention expectations can be traded in USDJPY or the other yen crosses. The pressure on Japanese bonds Meanwhile, bond investors continue to test BOJ’s commitment to yield curve control policy and are hedging by positioning on the short side in Japanese government bonds (JGBs). Ten-year swap rates, a key tool for international funds to express a view on Japanese yields, are more than 30bps higher than the BOJ’s 0.25% cap on 10-year yields and at 8-year highs. Officials have pushed back on “speculative” attacks on Japanese bond markets, and the rise in 10-year yields above the 0.25% cap, with a series of unscheduled asset purchases. September CPI surge to 3.0% y/y on the core measure was the highest in over 30 years, and more gains can be expected into the end of the year and weak yen continues to propel import price pressures and mobile phone fees will rise as well. This will also continue to pile in pressure on the BOJ to follow the global tightening wave, but will continue to be discounted to be energy-driven. BOJ faces a conundrum If BOJ wants to stop yen depreciation, it will need to adjust the yield curve control (YCC) policy such as raising its yield target or widening the movement range around it. Any of such moves would effectively be viewed as a hawkish pivot or a rate hike and would roil not just Japan’s domestic bond markets but also global as yields could see a fresh surge. Even hints of a policy review could send expectations of a BOJ pivot roaring, and mark a strong recovery in the Japanese yen. However, if the BOJ remains committed to YCC and supports the bond market, the next level to watch in USDJPY is 153, but there still remains potentially more room on the upside as long as the Fed hiking cycle continues. This may be accompanied by a huge intervention effort which could knock down USDJPY and other yen crosses by 2-5 big figures, but the move will still likely be reversed. In summary, between the integrity of YCC and JPY, something has to break. Admittedly, pressures will rise ahead of BOJ’s Oct 27-28 meeting and expectations are for an unchanged policy stance. Peak Fed hawkishness A pivot on the YCC by the BOJ sounds complicated. It would mean a significantly higher cost of servicing debt for Japan, which will mean fiscal pressures – something like what happened in the UK but with a much higher magnitude. Japanese households will face a significant stress, with about two-thirds of Japanese mortgages on variable rate, and loan repayments could shoot up substantially. The fate of the yen will then remain in PM Kishida’s hands, and it is well understood that large amounts will need to be spent and it will be a drain on their FX reserves. Authorities have been hinting at using the weak yen as a tool to their benefit, but pledging support to 10,000 companies, reshoring manufacturing, and focusing on inbound tourism. The only option then seems to be is status quo, and waiting for the peak Fed hawkishness. With US 10-year Treasury yields above 4.25%, the room on the upside is getting rather limited. If we assume peak Fed hawkishness to play out in Q4 or early Q1, then the pressure on JGBs and the Japanese yen would ease and all the BOJ needs to do is to wait it out. Source: https://www.home.saxo/content/articles/forex/bank-of-japan-what-to-expect-at-the-october-28-meeting-21102022

Stock markets turned red again on Friday after spending the earlier part of the week in recovery mode, with yields around the world once again on the rise. The recovery never looked sustainable and that’s how it’s proving to be. There is still huge uncertainty over the economy, inflation and where interest rates will end up and none of that is conducive to a strong sustainable stock market recovery. The situation in the UK looks particularly bleak and that’s before you consider the fact that the Conservative party is looking to elect a new leader less than two months after appointing the last. I’m not sure anyone is particularly confident that we’re suddenly going to see stability in government. The fact that Boris Johnson could make a spectacular return to number 10 pretty much sums up how messed up the situation is. Investors appear to share that pessimism as is evident in the performance of the pound which is down 1% against the dollar again this morning. That’s naturally not been helped by another dreadful retail sales report, with volumes dropping 1.4% last month after a decline of 1.7% the month before. That further supports the view that the economy is probably already in recession and those pressures will only intensify in the coming months as the Bank of England accelerates its tightening cycle. Although Ben Broadbent did seek to reassure markets, suggesting they were pricing too aggressively which led to expectations being pared back a little. Yen slides further as BoJ conducts more purchases The Bank of Japan was active again overnight as it sought to stop the yield on the 10-year JGB from breaking above its 0.25% upper band. This is the second day it has conducted unscheduled purchases in response to market pressures, piling further misery on the yen which has smashed through 150 against the dollar. There’s still no intervention though from the Ministry of Finance though, despite more warnings overnight. It seems the urgency with which they’re monitoring the situation isn’t in fact that urgent at all. Although considering how ineffective the last intervention was, they may be wondering what exactly the correct policy response is. Sitting and waiting for the dollar to fall isn’t working either though. And it seems the BoJ is in no mood to tweak its yield curve control targets, despite inflation remaining at 3% and core rising to 1.8%. Bitcoin slipping amid risk aversion Bitcoin is also in the red at the end of the week, tracking moves in other risk assets. Bitcoin is off around 1.5% compared with losses of more than 2% in Europe and more than 1% in US futures. Still, it’s slipped below $19,000 this morning although that does little to change the outlook. It’s fluctuated around $20,000 for the last couple of months and this morning doesn’t really change that. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Ending the week in the red - MarketPulseMarketPulse

The USD/JPY pair collapsed almost 600 points at the end of the trading week. The multi-week upward trend was expected to end with a collapse. Bulls on the pair updated the 32-year price high on Friday, getting close to the boundaries of the 152-th figure. And, apparently, this target fulfilled the role of the notorious "red line" for the Japanese authorities: they decided to conduct a currency intervention again. By and large, there was no doubt that the Japanese government would react to the rapidly falling yen. The only question was at what stage of USD/JPY growth the Ministry of Finance would intervene in the situation. In the previous month (and before that – in 1998), the red line corresponded to the 146 mark. However, this time the Japanese authorities decided to show restraint, observing the process of devaluation of the national currency. The fact is that the effect of the September intervention was short-lived. The USD/JPY pair collapsed by 500 points, but regained some of the lost positions on the same day. Traders took advantage of the downward pullback of the price and opened long positions en masse. The result was not long in coming: in less than a month, the pair "walked" a thousand points, breaking both the marks of 146-147, and even the mark of 150. Judging by yesterday's dynamics of the USD/JPY price (in the first half of the day), many traders tried to have time to "jump into the last car of the departing train." But after overcoming the 150.00 mark, any open longs resembled a lottery bet rather. Obviously a losing lottery, given the previous warnings of the Japanese authorities that the government may conduct a second currency intervention. Just yesterday morning, a few hours before the collapse of USD/JPY, Japanese Finance Minister Shunichi Suzuki expressed concern about the sharp weakening of the national currency, expressing readiness to intervene to support the yen. However, this hint, which was more than transparent, "did not reach the addressee." The pair rose to the level of 151.96 in a few hours – this is a new high since 1990 (by the way, over the past 12 months, the Japanese currency has depreciated by more than 30%). However, during the US session on Friday, the yen unexpectedly strengthened by 600 points, giving rise to rumors of another currency intervention. It is noteworthy that the Japanese authorities decided not to officially explain the reasons for the sharp strengthening of the national currency. Answering a direct question from journalists, Minister Suzuki told reporters that he would not comment on whether the intervention took place or not. His deputy, Masato Kanda, answered the journalists' question with a similar phrase: "I cannot comment on this information." However, insider information published by the Nikkei agency suggests that the Japanese authorities did indeed conduct currency interventions – however, it is unknown how much. However, there is no doubt that the collapse of USD/JPY was due to the intervention of the authorities. The question is different: is it possible to trust the downward momentum of the pair, given the September experience? At the very least, the fact that the bulls regained some of the lost positions on the same day is alarming. Thus, yesterday's low was fixed at 146.22, while the trading day ended at 147.66. It is likely that if it were not for the end of trading, traders would have entered the area of the 148th figure. Here it is necessary to recall the September events. Immediately after the decline, the USD/JPY pair stabilized, but at the same time, traders did not dare to cross the 146.00 mark for some time (or rather, consolidate around the 146th figure). Market participants expressed very well-founded fears that the Japanese authorities may repeat the intervention if the pair approaches the 147.00 target. It is likely that this time the market will react to the current situation in a similar way. Only now the "red line" will be 150.00 – again, only for a certain period of time. The discrepancy between the super-soft monetary policy of the Bank of Japan and the expectations of the tightening of the Federal Reserve's monetary policy will continue to push the pair up. Only now a kind of price "ceiling" in the form of the 150th price level will operate. This assumption is consistent with the USD/JPY technical picture. The daily chart shows that the pair failed to overcome the middle line of the Bollinger Bands indicator within the framework of the downward movement. At the same time, the upper line of this indicator just corresponds to the level of 150.20. Apparently, this target will serve as the upper limit of the price range within which the pair will be traded in the medium term. The lower boundary of this echelon will be the middle line of Bollinger Bands on D1, which corresponds to 146.50.   Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325032

On Friday, the yen made its way to strengthening from peak to peak of 575 points after an emergency intervention by the Bank of Japan. But the BOJ can also be understood, since in the morning the yen lost 2 figures and showed an extreme of almost 152 yen per dollar, having overcome the 1998 peak (147.71). This morning the price is tearing up again, having reached the range of two price channel lines at 145.55-150.00. But now we are waiting for the market to cool down, the price will initially fall below 147.50, then to 145.55. The technical reason for this is a divergence forming with the Marlin Oscillator on a daily time scale. The signal line of the oscillator is currently experiencing resistance to falling from its own zero line. In the near future, we expect the oscillator to move into the territory of a downward trend. The price consolidated below the MACD line on the four-hour chart, and the Marlin Oscillator also firmly settled in negative territory. We are waiting for the price to return under 147.50 and further advance to 145.55.     Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325062

    Relevance up to 07:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297960

Here is what you need to know on Monday, October 24: As investors prepare for the highly-anticipated central bank decisions later this week, major currencies stay relatively quiet at the start of the new week except for the Japanese yen. The US Dollar Index moves sideways at around 112.00 and US stock index futures trade flat on the day. S&P Global will release the preliminary October Manufacturing and Services PMI data for Germany, the euro area, the UK and the US. Federal Reserve Bank of Chicago's National Activity Index will also be looked upon for fresh impetus later in the day. During the Asian trading hours, the data from China revealed that the Gross Domestic Product grew at an annualized rate of 3.9% in the third quarter. This reading came in better than the market expectation for an expansion of 3.4%. Retail Sales in China, however, rose by 2.5% on a yearly basis, falling short of analysts' estimate of 3.3%. The Shanghai Composite fell sharply following mixed data and was last seen losing more than 2% on a daily basis. USD/JPY The USD/JPY pair climbed toward 150.00 in the first hours of trading early Monday but lost over 400 pips in a matter of 10 minutes. Japan’s top currency diplomat Masato Kanda refrained from clarifying whether they intervened in the market but reiterated that they will continue to take appropriate action against excessive, disorderly market moves. Following the sharp decline witnessed in the Asian session, the pair recovered to the 149.00 area, where it's up around 1% on the day. EUR/USD EUR/USD trades in a relatively tight range near mid-0.9800s following Friday's rebound. Business activity in the euro area's and Germany's manufacturing sectors are expected to continue to contract in early October.  GBP/USD GBP/USD trades in positive territory and continues to edge higher toward 1.1400 in the early European morning on Monday. Former British Prime Minister Boris Johnson announced that he ended his big to replace Liz Truss. Meanwhile, former chancellor Rishi Sunak has reportedly 165 supporters ahead of Monday's nomination deadline and remains the clear favourite to become the next PM. Gold Following Friday's impressive upsurge, gold climbed to a fresh 10-day high near $1,670 early Monday but struggled to preserve its bullish momentum. At the time of press, XAU/USD was little changed on the day at $1,657. Meanwhile, the 10-year US Treasury bond yield is down nearly 2% on the day, helping gold hold its ground for the time being. BTC Bitcoin climbed toward $20,000 on Sunday but lost its traction before reaching that level. As of writing, BTC/USD was down 1% on the day at $19,350. Ethereum ended up gaining more than 4% last week and seems to have gone into a consolidation phase above $1,300 early Monday.

The USD/JPY pair went into a turbulence zone. The pair has been fluctuating wildly for a second consecutive session. For how long will this roller coaster continue and where will it bring the pair? USD pressured by FX interventions Last week, USD/JPY surged amid a growing gap between the rate policies of the US and Japan. This resulted in a spectacular rally of the pair. In just a few days, the greenback strengthened against the yen by more than 1% and broke through the psychological level of 150. It continued to advance supported by the hawkish plans of the Fed. In the early session on Friday, USD considerably accelerated growth and jumped to a fresh 32-year high of 152. This was the last straw for the Japanese government that has repeatedly warned it would have to intervene again if the yen continued to fall. Yet, given the failure of the previous intervention, the dollar bulls downplayed these warnings and had to regret this later. At the end of the previous week, JPY unexpectedly surged by 4% in just a few hours and reached the mark of 144.50. This jump had no fundamental ground which is why traders suspected another intervention by the Bank of Japan. Although Japanese monetary authorities declined to comment, most analysts are sure that these were the measures that helped the yen recover. According to estimates, the BoJ spent around $30 billion on currency interventions which is $10 billion more compared to the previous round. Moreover, some analysts are sure that the regulator made another intervention this morning when the US dollar headed for the key level of 150 against the yen. A rapid fall in the US dollar may serve as proof of this assumption. The greenback dropped sharply without any obvious reason. "It's blindingly obvious that the BOJ is intervening," Ray Attrill, head of FX strategy at National Australia Bank in Sydney, said. Storm alert for USD/JPY However, interventions are becoming less effective with time. At the moment of writing, USD managed to recover back to 149 and settled there. The US currency is regaining ground at a fast pace, driven by the growing gap between monetary policies of the Fed and the BoJ. More than a week is left until the next Fed meeting where the regulator is expected to raise rates once again. As this event is approaching, hawkish expectations will rise, thus boosting the growth of the US dollar. In addition, traders are waiting for the report from the BoJ. The regulator is widely expected to maintain its current monetary policy and leave the rate unchanged. If so, the greenback may get another strong driver while the yen will depreciate further. But will Japan's monetary authorities put up with this? Most likely, they will continue to intervene. Japan's top currency diplomat Masato Kanda said this morning that authorities were ready to take tough measures to tackle speculations against the yen. Analysts assume that Japan may introduce more interventions in the coming days. This means that USD/JPY will be extremely volatile this week. So, traders should be very cautious when dealing with this instrument. At the same time, experts note that interventions may have limited effect on the yen. As long as the Fed is aggressively hiking the rate, the BoJ is unlikely to halt the rally of the US dollar. Only a change in the BoJ's policy may stop the downtrend in the yen. Yet, there are no signs of such a change which means that USD will keep strengthening against the yen despite all attempts by the BoJ.   Relevance up to 10:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325116

Summary:  Today we look at the zany session that developed on Friday across not just USDJPY but all markets in the wake of apparent heavy official intervention from Japan, although sources there are playing coy with their communication on the issue. We also discuss a vicious further slide in the Hang Seng index as investors vote no confidence in the signals emanating from the CCP party congress ahead of Xi's third term. A look at natural gas, copper, earnings season hitting fever pitch this week, the macro calendar for the week ahead and more in today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-24-2022-24102022

The Japanese yen is sharply lower today, as USD/JPY has climbed 1.2% and is trading at 149.41 in Europe. The yen continues to exhibit strong swings for a second straight session. The yen started the week with sharp gains and jumped to 145.28, but the dollar has recovered and pushed the yen back above 149. This is a repeat of the whipshaw we saw on Friday, when the yen traded in a range of almost 600 points. MOF apparently intervenes to boost yen The wild price action is most likely a result of intervention by Japan’s Ministry of Finance (MOF), although Japanese authorities are staying mum. Prime Minister Kishida said today that the government would not tolerate excessive currency moves based on speculators, but this rhetoric is nothing new.  The yen hit a new 32-year high of 151.95 on Friday, and the MoF may have decided to take off the gloves and has intervened for a second straight day. Will the stealth intervention succeed in propping up the yen? The move did the job on Friday, with USD/JPY falling 1.7%, but the dollar has recovered most of those losses on Monday. The harsh reality is that the widening rate differential between Japan and the US will make unilataral intervention unlikely to succeed. The Fed continues to ramp up interest rates while the Bank of Japan zealously has capped rates on JGBs. This included an emergency bond-buying package last week to keep yields on 10-year bonds below 0.25%. The yen has plunged a staggering 22% against the dollar in 2022, and speculators are betting that the yen’s slide will continue. The BoJ meets for a two-day meeting on Thursday and Friday. If the Bank maintains its dovish policy stance and refuses to provide the yen with a lifeline, the currency is likely to fall even further. . USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

On Friday, September 21, during the late afternoon hours in Europe and, in turn, the evening hours in Japan, there was a sharp plunge in the USD/JPY exchange rate. Quotations plunged from around 151.50 to 146 yen per dollar. The market was expected to see another intervention by Japanese authorities after the yen had previously weakened to levels last seen 32 years ago. Is the yen sinking in strength? Japanese Finance Minister Shunichi Suzuki said Monday that the government is trying to confront currency speculators as the yen continues to fluctuate widely. The systematic weakening of the currency prompted another Bank of Japan intervention on Friday. Suzuki assured that the ministry is monitoring the currency market, BBN reported. In turn, Japanese Deputy Finance Minister for International Affairs Masato Kanda added that the government "will continue to take appropriate measures against excessive disorderly movements in the market." Source: Conotoxia MT5, USD/JPY, H1 Statements by Japanese authorities Masato Kanda also told reporters that Japan cannot tolerate speculators who significantly alter currency rates and have a negative impact on people's lives and the global economy. Meanwhile, Japanese Prime Minister Fumio Kishida issued a new warning on Saturday against excessive yen movements in the currency market, saying the country will not hesitate to take "appropriate" measures when necessary. In turn, Bank of Japan Governor Haruhiko Kuroda said the central bank must support Japan's economic recovery from the pandemic. The BOJ  would do everything to achieve stable inflation supported by wage growth. The rapid weakening of the yen is becoming a factor in lifting inflation, according to quotes published by Bloomberg. Will the Bank of Japan fight the Fed? It appears that the main factor that may be behind the yen's weakening in recent months is the divergence in the monetary policy pursued by the Fed and the Bank of Japan. The Fed has opted for an unprecedented pace of interest rate hikes, while the Bank of Japan persists with loose monetary policy. As a result, the U.S. dollar is increasing its interest rate in favor of the Japanese yen, and capital seems to be flowing to where it can get more interest. Source: Conotoxia MT5, USD / JPY, MN. Nonetheless, current Japanese actions seem to indicate that the finance ministry  would try to chase away those who gamble on further JPY weakness. If this is indeed the case, it seems  that Japan  believes the Fed is indeed close to moving away from the pace of 75 bp hikes every meeting. With the BOJ poised to maintain ultra-low policy at this week's meeting, the only hope for lasting relief for the yen should come from the other side of the Pacific. If that doesn't happen, however, it seems that the only result Japan might achieve, would be a decline in foreign exchange reserves. Did you know that CFDs allow you to trade on both falling and rising prices?Derivatives allow you to open buy and sell positions, and thus invest when quotes rise as well as fall. At Conotoxia, you can choose from CFDs on more than 100 currency pairs. Wanting to find a CFD on USD/JPY, for example, you just need to follow 4 simple steps: To access Trading Universe - a state-of-the-art hub of financial, information, investment and social products and services through a single Smart account, register here. Click "Platforms" in the "Invest&Forex" section. Choose one of the accounts: demo or live On the MT5 or cTrader platform, search for the CFD currency pair you are looking for and drag it to the chart window. Use the one-click trading option or open a new order with the right mouse button. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.21% of retail investor accounts lose money when trading CFDs with this CFD provider. Consider whether you understand how CFDs work and whether you can afford the high risk of losing your money. Read the article on Conotoxia.com

USD/JPY is continuously auctioning below 149.00 as investors await more clarity on BOJ’s intervention. S&P500 futures have recovered their morning losses which indicates that the risk-on impulse could rebound. Japanese importers have been hit hard by the sliding yen to the lowest levels in 32 years. The USD/JPY pair is displaying a lackluster performance below the critical hurdle of 149.00 in the Tokyo session. The asset has turned sideways following back-and-forth cues from the US dollar index (DXY). The juggling of the DXY below 112.00 indicates that the market mood is extremely quiet. S&P500 futures have recovered their marginal losses recorded in early Tokyo. Also, the 10-year US Treasury yields have extended their losses to near 2.21%, which could bring a rebound in the risk-on impulse ahead. Knee-jerk reactions in an asset usually turn the asset into a sideways trend. The Bank of Japan (BOJ)’s stealth intervention in the currency markets against disorderly FX moves to safeguard the weakening yen has kept investors on the sidelines. The weakening of the domestic currency due to speculative moves has harmed the spirits of Japanese investors. BOJ Governor Haruhiko Kuroda, a Japanese government official said that “the recent sharp, one-sided yen weakness is not good for the economy.” Japanese officials are paying ‘full attention’ to market volatility. The Tokyo government is continuously intervening in currency markets after yen recorded its lowest levels in 32 years. The impact of the deteriorating yen is impacting the importers badly. From the purchase of oil to foodstuffs, Japan has a constant demand for dollars, that is sensitive to yield differentials, expectations from monetary policy, and technical levels reported Bloomberg. On the US front, investors’ focus has shifted to the US Gross Domestic Product (GDP) data, which will release on Thursday. . The annualized GDP is expected to improve significantly to 2.4% vs. a decline of 0.6% reported earlier.

The Japanese yen is almost unchanged today, after being whipsawed over the past two sessions. In the European session, USD/JPY is trading at 1.48.93, down 0.06%. It’s been a roller-coaster ride for the yen, as USD/JPY rose 1.7% on Friday and declined by 0.9% on Monday. It’s clear that the driver behind this volatility has been intervention by Japan’s Ministry of Finance (MOF), although officials in Tokyo are keeping mum. The MOF intervened in late September, at a cost of around 2.8 trillion yen ($19.8 billion). Friday’s intervention was about double the size, and Monday was likely about the same. This means that the MOF is delivering a more powerful punch to deter speculators from betting against the yen. The interventions may have slowed the yen’s descent but it’s doubtful the moves will reverse the downward trend. Japan’s current policy mix is contradictory and likely unsustainable – the MOF is intervening in the currency markets while the Bank of Japan has intervened in the fixed-income markets and capped yields on Japanese government bonds. Markets eye BoJ meeting With the Federal Reserve widely expected to deliver another 0.75% rate next week, the US/Japan rate differential continues to widen, which will weigh on the yen. The MOF’s intervention and the subsequent volatility have heightened the interest in the BoJ’s meeting on Wednesday and Thursday, which some are calling a ‘do or die’ moment for the Japanese yen. If the BoJ continues its dovish policy and doesn’t provide the yen a lifeline, the yen is likely to fall even further. Japan’s core inflation rose to 3.0% in September, its highest level in eight years. This follows the 2.8% gain in August and matched the consensus, and the yen’s reaction has been muted today. . USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Despite being hit by heavy selling USDJPY stays the course and could move higher towards 160. 145 support could be key  USDJPY spiked to 151.94, which is the 2.0 projection (200%) of the volatile market 22nd September, before hit by heavy selling. Possible instigated by the Japanese Central Bank, sending the pair down below 146, spiking below the peak from then last time USDJPY got hit by heavy selling resulting in extreme volatility. Strong rebound followed and USDJPY is crawling back higher.RSI is still bullish without divergence suggesting we could see higher levels on USDJPY.However, the spike low at 145.29 should be observed. If USDJPY breaks below it could drop to around 140 Monthly chart shows how the 5th extended in USDJPY has almost reached the 2.0 projection of the 4th corrective vawe which is 152.90. If USDJPY reaches 157 it is the same distance as the 3rd vawe. However, no strong resistance until around 160. RSI is at extreme level above 82 with no divergence indicating higher levels. The uptrend is very stretched however, and more volatility should be expected, both due to Central Bank intervention and profit taking.     Source: https://www.home.saxo/content/articles/forex/ta-volatile-usdjpy-resume-uptrend-after-heavy-selling-25102022

The USD/JPY pair fell by 105 points yesterday, but this movement was under pressure from the rest of the market (the dollar index lost 1.00%), so it's impossible to speak about the price's intention to turn into a medium-term weakening, even if the price divergence with the oscillator intensifies. Moreover, the signal line of the oscillator has the risk of an upward reversal from the zero line. For now, we can hope for the price to overcome the nearest support at 147.52 and reach the lower level around 145.55. The MACD line is approaching this level. If growth develops, the first target will again be the price channel line around 150.00. The price is developing between the support at 147.50 and the MACD line on the four-hour chart, which tends to the resistance at 150.00. The range of uncertainty is wide, but it is created by investors' worries about tomorrow's European Central Bank meeting and even more about the elections to the US Congress, after which, if the Democrats lose, the stock market could collapse, and with it the USD/JPY pair.   Relevance up to 04:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325319

A week of silence before the Fed meeting on November 2 helped reduce volatility in markets. Then, weaker macroeconomic data from the US strengthened confidence that the Fed will slow the pace of growth of interest rates. This is also why stocks continued to rally despite weak data and some deterioration in corporate earnings. Pound also rose after Rishi Sunak became the new prime minister of the UK. However, quotes are likely to move sideways starting today. USD/CAD Inflation in Canada turned out to be higher than expected in September even though it fell from 7% to 6.9% (6.8% was expected). Meanwhile, the core index rose to 6%, instead of falling from 5.8% to 5.6% as predicted. Clearly, price pressure continues to spread, capturing wider sectors of the economy. Although gas prices fell by 7.4%, rising prices in the service sector more than offset the decline. A week ago, markets expected the Fed rate to increase by 50 basis points. But now they are counting on a 75 basis point hike, and some even anticipate as much as 100 points, which, of course, is unlikely, but clearly indicates a slight panic in the markets. If the Fed press conference today is hawkish, and the November meeting hint at a potential 50bp rate hike in December, the situation will shift in favor of the loonie, which will eventually lead to a reversal of USD/CAD. Although it is too early to talk about this, the Bank of Canada will most likely act more cautiously. So far, according to the latest CFTC report, the net short position in CAD decreased by 363 million to -1.5 billion. But positioning remains bearish despite the slight adjustment. The estimated price is above the long-term average and is directed upwards, which gives reason to expect USD/CAD to continue growing. If the BoC shows firmness today, the pair is likely to fall towards the support level of 1.3510/20. But more realistic is the resumption of purchases, followed by a transition to a sideways range in anticipation of the Fed meeting on November 2. USD/JPY Yen broke the psychological level of 150 and flew to a new multi-year record, which led to an emergency intervention by the Bank of Japan. This caused USD/JPY to drop to a low of 146.23, the same magnitude as during the last intervention on September (£145.90 to £140.26). The exact amount of the intervention will be known after the Ministry of Finance publishes its report on October 31, but it is clear that it was no less than that of the previous intervention. There was another intervention on Monday, but it did not lead to the expected result. It seems that Japan is losing capital, and its foreign investment income is not enough to cover the deficit. Most likely, this will continue as long as the Bank of Japan carries on its ultra-soft policy. According to the latest CFTC report, the net short position in JPY rose by 1.267 billion to -7.9 billion. The positioning is steadily bearish, and there are no signs of a reversal. USD/JPY will continue to rise until the Bank of Japan changes its monetary policy. Perhaps, the meeting on Friday will give some news, but interventions will not be able to block growth.   Relevance up to 07:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325331

Thursday's economic docket highlights the release of the Advance third-quarter US GDP report, scheduled at 12:30 GMT. The world's largest economy is expected to have expanded by a 2.4% annualized pace during the third quarter. This would mark a sharp reversal from the 0.6% fall in the previous quarter and the 1.6% decline registered in the first three months of the year. Economists at Société Générale offer a brief preview of the key macro data and write: “We calculate a 3% gain for real GDP, the key economic release of the week. We think that it could be even higher. What does that do for recession calls? Temporary reconsideration is our answer. Companies are becoming more conservative as compensation pressures build.” How Could it Affect USD/JPY? Ahead of the release, the emergence of some US dollar buying assists the USD/JPY to rebound swiftly from the vicinity of the 145.00 mark, or a nearly three-week low touched earlier this Thursday. A stronger GDP print will pour cold water on expectations that the Fed will soften its hawkish stance amid signs of a slowdown in the US economy. This, in turn, will lift bets for more aggressive Fed rate hikes in future and provide a fresh lift to the greenback, setting the stage for some meaningful upside for the major. Conversely, a weaker reading would add to growing market worries about a deeper economic downturn and prompt fresh selling around the buck. That said, a big divergence in the monetary policy stance adopted by the Fed and the Bank of Japan might continue to act as a tailwind for the USD/JPY pair. Investors might also refrain from placing aggressive bets ahead of the BoJ meeting on Thursday, suggesting that the immediate market reaction is more likely to be limited. Key Notes   •  US Q3 GDP Preview: Dollar bears to retain control on weak GDP print   •  US GDP Preview: Forecasts from eight major banks, strong rebound to break two quarters of negative growth   •  USD/JPY bounces off multi-week low, finds decent support ahead of 145.00 mark About US GDP The Gross Domestic Product Annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better-than-expected number is seen as positive for the USD, while a low reading is negative.      

USD/JPY is showing little movement today, after gaining 1% on Wednesday. In the European session, USD/JPY is trading at 146.15, down 0.16%. Earlier in the day, USD/JPY touched a low of 146.11, its lowest level since October 7th. Yen is on a roll, but for how long After falling close to the 152 line last Friday, the Japanese yen has turned things around. Japan’s Ministry of Finance (MOF) intervened on Friday and Monday, in what has been described as “stealth intervention” as the MOF has refused to comment.  The MOF has engaged in sharp rhetoric against the yen’s prolonged slide, and Finance Minister Shunichi Suzuki has been blunt, saying that the government was “facing off with speculators via markets.” The currency intervention appears to have worked, with the yen improving to around 146. This latest round of interventions is much larger than the one in September, which only slowed the yen’s decline for a few days. Still, I remain sceptical about whether unilateral action such as intervention is the answer to the yen’s woes. Japan has maintained a monetary policy mix that is contradictory and likely unsustainable. The Bank of Japan has kept its ultra-loose policy, in order to support the fragile economy. This has meant intervening in the fixed-income markets in order to cap yields on 10-year JGB at 0.25%. The price for this policy has been a tumbling yen, as the US/Japan rate differential continues to widen as the Fed continues its aggressive tightening. The MOF has thrown a lifeline to the yen by intervening, but it’s far from clear that this will be an effective policy. This sets the stage for a key Bank of Japan meeting today and Friday, and the meeting could well be a “do or die” moment for the Japanese yen. If the BoJ’s message to the markets is business as usual, the yen will likely be under pressure, and the ball could revert back to the MOF and the possibility of further intervention if the yen sags and approaches the 150 line. USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen hits 3-week high as BOJ meets - MarketPulseMarketPulse

On Thursday, the yen strengthened against the dollar by 0.11% against the growth of the dollar index by 0.79%. It is also symptomatic that USD/JPY fell amid a 0.61% decline in the S&P 500 - this shows, albeit in part, the yen's reaction to speculators' withdrawal from risk. The growth of the stock market is in doubt, as yesterday the indices fell on data on US GDP growth for the 3rd quarter by 2.6% y/y. Technically, the price develops between the price channel lines at 145.55 and 147.54. Overcoming the resistance may still extend the rise to 150.00, but a breakthrough below 145.55 will open the first stage of decline to the MACD line of the daily scale around 144.25. Breaking the MACD line will open the 141.62 target. The Marlin Oscillator is declining in negative territory, which increases the likelihood of a downside scenario. The trend is fully downwards on the four-hour chart. The main obstacle for the bears is the support level of 145.55. It is necessary to settle below it, and then other bears will join them.     Relevance up to 05:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325582

USD/JPY is in positive territory today. In the European session, the yen is trading at 146.94, up 0.47%. BoJ maintains policy All eyes were on the Bank of Japan, which wrapped up a crucial 2-day policy meeting on Friday. The meeting came just days after Japan’s Ministry of Finance (MOF) intervened in the currency markets after the yen had fallen close to the 152 line, a new 32-year low. Finance Minister Shunichi Suzuki would not confirm that the MOF had intervened for the second time in two months, but issued a blunt warning, declaring that the government was “facing off with speculators via markets.” This set the stage for today’s BOJ meeting. In the end, it was business as usual, as the Bank maintained ultra-low interest rates and kept its dovish guidance. The BoJ remains an outlier with its loose policy, as most other major central banks are tightening in order to curb inflation. What was noteworthy was that the central bank revised upwards its inflation forecast for fiscal 2023. Headline inflation was raised to 1.6%, up from 1.4% in July, and core inflation to 2.9%, up from 2.3% in July, with the BoJ warning that risks were skewed to the upside. The Bank also lowered its growth forecast for fiscal 2022 and 2023. Inflation has pushed above the BoJ’s target of 2%, but BOJ Governor Kuroda has insisted that he will not consider tightening policy until it is clear that inflation is sustainable. There was a hint from the Bank that this may not be so far off, as today’s BOJ quarterly report, noted that rising inflation is expected to “lead to sustained price rises accompanied by wage gains”. The yen has paid the price for the BoJ’s ultra-loose policy, tumbling some 20% against the dollar this year. With the BoJ making it clear that it won’t be throwing any lifelines to the yen, the currency will be under pressure from the widening US/Japan rate differential, unless the MoF continues to intervene in the currency markets. . USD/JPY Technical USD/JPY faces resistance at 147.50 and 148.59 There is support at 145.23 and 143.14 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Today, the Bank of Japan has once again confirmed its status as an outsider among global central banks. Despite the global tightening trend, the BOJ has decided to maintain ultra-low interest rates. No changes on the Japanese front At the end of the week, traders on the USD/JPY pair are focused on the BOJ meeting. At the start of Friday, the central bank issued its verdict on the further monetary exchange rate. As expected, the BOJ did not present a hawkish surprise. The central bank has maintained its policy guidelines: it left interest rates at -0.1% and promised to keep the yield of 10-year bonds at around 0%. The BOJ continues to follow the dovish route, even despite the next jump in consumer prices. The report published today showed that in October, annual inflation in the country increased at the highest rate since 1989. This month, the core CPI jumped to 3.4%, which is significantly higher than the BOJ target, which is at 2%. Nevertheless, the BOJ still considers the acceleration of inflation unsustainable. The central bank expects consumer price growth to slow down to 1.6% over the next 12 months, although it has raised its inflation forecast for the current fiscal year. According to BOJ estimates, the CPI will remain around 2.9% until March 2023, which is significantly higher than the previous estimate of 2.3%. Another argument in favor of maintaining a soft monetary policy of the BOJ is the slow recovery of the economy after the COVID-19 pandemic. Now the central bank is concerned that a total increase in interest rates in the world could trigger a global recession, which would negatively affect the state of the already fragile Japanese economy. Given this risk, the BOJ sharply lowered its economic growth forecast for the current fiscal year. Now the central bank expects GDP to rise not by 2.4%, as before, but by only 2%, followed by a slowdown to 1.9%. Such gloomy prospects are the BOJ's main obstacle on the way to normalizing its monetary policy. It forces the BOJ to take a marginal dovish position, which condemns the yen to further depreciation. What is happening with JPY now? This year, the yen is experiencing the worst drawdown in almost all directions in history, but most of all against the dollar. Since January, due to the strong monetary divergence of Japan and the United States, the JPY rate has fallen against the USD by more than 20%. Unlike the BOJ, the Federal Reserve has embarked on a hawkish track this year and has significantly outpaced other central banks in terms of rate hikes. In order to curb record high inflation in the country, American politicians have already raised interest rates five times during the year and are preparing to hold another round of hikes next week. Now the markets expect that in November the Fed will again increase the indicator by 75 bps, which is an excellent driver for the dollar, especially when paired with the yen. However, at the same time, most traders believe that by December, the US central bank may slow down the rate of tightening to 50 bps, as the American economy begins to show signs of slowing down. The emergence of speculation about the Fed's less hawkish policy caused the greenback to sharply weaken on all fronts this seven-day period, including against the yen. Recall that last week the dollar reached a new 32-year high relative to the yen, approaching the 152 mark. Since then, the USD/JPY pair has fallen by almost 4%. In part, the greenback's position was undermined by two cycles of interventions, which Japan is supposed to have conducted in support of the yen. But the main pressure on the dollar was still exerted by increased expectations of a slowdown in the pace of rate hikes in America. Now that the USD/JPY pair has received another powerful boost from the BOJ, analysts expect it to return to growth. At the time of preparation of the material, the yen really moved into the red zone and fell against the dollar by 0.35%. According to experts, in the short term, the yen's decline may accelerate significantly. Memories of last month are still vivid in the minds of many, when the dovish comments of BOJ Chairman Haruhiko Kuroda caused a sharp weakening of the yen. And just half an hour after Kuroda finished his speech, the Japanese Ministry of Finance conducted the first currency intervention in 24 years. Some analysts do not rule out that in the near future the market may catch deja vu. If the dollar bulls break loose again, the Japanese government will most likely not hesitate for a long time and press the red button.   Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325622

The Bank of Japan stands pat despite recent inflation hikes, while the government has introduced a larger-than-expected stimulus package. We doubt the combination of easing macro policies will be good for the economy in the long run. But authorities have made it clear they are not afraid of paying a high price to keep interest rates low – at least for now The Bank of Japan in Tokyo The Bank of Japan kept currency easing policy measures unchanged, as expected The Bank of Japan (BoJ) unanimously decided to keep its short-term and 10Y targets at -0.1% and 0.0%, respectively. The dovish forward guidance on the statement reiterated that the central bank will take additional easing measures if necessary. Meanwhile, the BoJ upgraded its inflation outlook for the next two years. Now, it expects core inflation to rise quite sharply to 2.9% in FY22, then drop to 1.6% in FY23 and FY24. This suggests that this year’s higher inflation is only transitory, and inflation will eventually return to below its 2% target. The BoJ has upgraded its inflation outlook Source: Bank of Japan Meanwhile, fiscal policy will play an important role in reducing the inflation burden The government unveiled an extra budget plan of 29.1 trillion JPY (5.3% of GDP) to curb inflation pressures. The government will extend fuel tax cuts until next year and subsidise electricity fees by about 20% to households. In addition, the government will provide incentive programmes to encourage companies to be proactive in raising wages. The subsidy programme could help the BoJ earn more time until it sees the long-awaited signs of wage growth. However, doing this will require the government to issue more debt, but at least domestic funding costs will be cheap, as long as the BoJ keeps its yield curve control (YCC) policy. Otherwise, when the time comes to raise rates, the government will see expensive paychecks, which can be even more painful. FX: Dovish BoJ undermines intervention efforts Unchanged and dovish BoJ policy will continue to undermine the Finance Ministry's FX intervention efforts to stabilise USD/JPY. One could argue that the government's fiscal stimulus package is also an acknowledgement that it cannot protect its consumers from a weaker yen and higher energy costs. On Monday, the Ministry of Finance should release statistics for the size of FX intervention for the month of October. This could be close to $40bn, following the $20bn of intervention in September. Japan has around $1.1trn of FX reserves, so there will be no question of Japan running out of FX reserves. For reference, the Czech National Bank has spent 20% of its FX reserves this year on defending the koruna. But Japan's FX reserves are not limitless and we would expect this FX intervention campaign to continue in a strategic and judicious manner. In practice and given our strong dollar view, we doubt Japanese authorities can prevent USD/JPY from retesting 150 later this year – and it could go even higher were the recent benign conditions in energy markets to take a turn for the worse. Read this article on THINK TagsJPY GDP Fiscal stimulus CPI Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

USD/JPY gains traction for the second successive day amid sustained USD buying. The Fed-BoJ policy divergence continues to undermine the JPY and offers support. The uptick lacks bullish conviction as the focus remains on the key FOMC meeting. The USD/JPY pair edges higher for the second straight day on Monday and looks to build on its recovery from the 145.00 psychological mark, or a nearly three-week low touched last Thursday. The pair stick to its modest gains through the first half of the European session and is currently placed near a multi-day high, just below mid-148.00s. The Japanese yen continues to be undermined by the fact that the Bank of Japan held interest rates at record lows on Friday and reiterated that it will continue to guide the 10-year bond yield at 0%. The central bank reaffirmed the need for accommodative policy amid economic headwinds stemming from the resurgence of COVID-19 cases in China and global recession fears. This, along with some follow-through US dollar buying interest continues to lend support to the USD/JPY pair. In fact, the USD Index, which measures the greenback's performance against a basket of currencies, extends last week's bounce from over a one-month low amid rising US Treasury bond yields. The prospects for another supersized 75 bps Fed rate hike move in November turn out to be a key factor pushing the US bond yields higher and lending some support to the greenback. The USD bulls, however, seem reluctant to place aggressive bets ahead of this week's key central bank event risk. The Fed is scheduled to announce its monetary policy decision on Wednesday and investors will look for fresh clues about the future rate-hike path. Hence, the focus will remain on the accompanying policy statement and the post-meeting press conference. This will influence the USD price dynamics and help determine the next leg of a directional move for the USD/JPY pair. In the meantime, elevated US bond yields should act as a tailwind for the USD amid absent relevant economic data.

USD/JPY ended last week with strong gains and the uptrend has continued today. In the European session, the yen is trading at 148.23, up 0.51%. Yen slips as BOJ stays the course All eyes were on the Bank of Japan rate meeting, which wrapped up on Friday. It was business as usual for the BoJ, which maintained its dovish stance. Governor Kuroda said that the BoJ had no plans to raise rates or shift policy “anytime soon”. The BoJ has maintained an ultra-loose policy for years, but there has been speculation that the Bank might make some changes, as the yen has tumbled and inflation is higher than it has been in years. Kuroda’s remarks poured cold water on any such thoughts, as the BoJ remains focused on supporting the weak Japanese economy by means of an ultra-accommodative policy. Clearly, the BoJ has no interest in raising rates to support the yen, although Kuroda paid the usual lip service to the yen’s descent, saying that its rapid fall was “negative and undesirable”. Investors were not impressed and the yen fell close to 1% on Friday. In the US, the Fed is widely expected to raise rates by 0.75% on Wednesday. Inflation has been falling slightly, but core inflation has been rising, which has put to rest hopes that solid data might induce the Fed to ease up on tightening. The Core PCE index, the Fed’s preferred inflation gauge, rose 5.1% in September, up from 4.9% in August and just shy of the consensus of 5.2%. The Fed continues to view inflation risks as weighted to the upside and is unlikely to ease rates unless it is satisfied that inflation has peaked.   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen falls to 148 - MarketPulseMarketPulse

Red lines- bullish channel Blue rectangle- resistance USDJPY is trading around 148.70. Price continues its upward bounce after the new lower low made last week around 145.10. The lower low in price was combined with a lower low by the RSI as well. This makes us believe that the upward move is most probably just a pause to the down trend. Trend remains bullish as price continues to trade inside the red upward sloping channel. Resistance is key at 148.90-149.40. Last time USDJPY visited this resistance area it got rejected. Bulls need to recapture this resistance area if they are to hope for more upside. USDJPY remains vulnerable to a move towards the lower channel boundary at 140.     Relevance up to 13:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299058

The USD/JPY pair rose 130 points yesterday, stopping in the middle of the way to 150.00 resistance. The stop was caused by a reversal of the signal line of the Marlin Oscillator on the zero line. The price is most likely to undertake a downward scenario, that is, it will overcome the support at 147.50 and then go down to the price channel line to the area of 145.45, where the MACD line is already striving. This is a key level, a breakthrough of which, or a reversal from which will determine the further medium-term price movement. At the moment, the option with a further advance to 141.50 has a slight advantage. On the four-hour chart, the price reversed from the resistance of the MACD line. Marlin also turns down and picks up speed. The first task is to settle under 147.50.   Relevance up to 03:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325854

USD/JPY has seen a nice three-wave rally from the 75.57 low. That low was printed back in October 2011. Now, 11 years later, we have just seen the top of wave C at 151.94 and should now be looking for a corrective decline towards strong support near 114.00. We do think that the decline from 151.94 will be in three waves and count as an X-wave and be followed by a new three-wave rally to the upside. In the short term, we are looking for a break below support at 145.48 to confirm that USD/JPY has peaked for now and the decline towards 114.00 is in progress.     Relevance up to 07:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299147

Technical analysis: USD/JPY has been trading downside and I found the breakout of the rising wedge in the background, which is sign that sellers are in control and that we might see further drop. Trading recommendation: Due to the breakout of the rising wedge pattern in the background, IO see potential for the further drop. Watch for the potential selling opportunities on the intraday rallies with the downside objective at the price of 145.20. MACD oscillator is showing fresh downside momentum, which is sign that sellers are taking control over buyers. Key resistance is set at the price of 148.85   Relevance up to 09:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299189

The level of uncertainty in the market is off the scale ahead of tomorrow's Federal Reserve meeting, which affects the current dynamics of the dollar-yen pair. What helps USD? The US currency regained its wings at the beginning of the week. Yesterday, the DXY index soared by almost 0.8% and hovered around a weekly high at 112. The fuel for the greenback was the strengthening of hawkish market expectations ahead of the Fed's monetary policy meeting. The event at which American officials are to announce their decision on interest rates will be held on Wednesday � November 2. Now most traders expect that the Fed will raise the indicator by 75 bps for the fourth time in a row. The probability of such a scenario is estimated at 89.2%. The market's confidence in the hawkish determination of the Fed has a positive effect on the yield of 10-year US government bonds. Yesterday, the indicator rose to 4.06%, which put strong downward pressure on the JPY rate. The yen, which is extremely sensitive to the difference in the yield of US bonds and their Japanese counterparts, fell by more than 0.8% against the dollar on Monday and approached a 30-year low at 149. The sharp drop in the JPY was also facilitated by the dovish decision of the Bank of Japan, which was adopted at the end of last week. Despite the acceleration of inflation in the country, the BOJ has maintained an ultra-soft monetary rate, which implies negative interest rates. The fact that Japan left the indicator unchanged, while America is preparing for the next round of rate hikes, further intensified the divergence in monetary policy of these two countries. Most experts believe that until the monetary divergence begins to shrink, the yen will remain in a downtrend. However, judging by the forecasts regarding the Fed's future course, this will not last that long. What prevents the dollar? Now the main obstacle to the strengthening of the US currency is the growth of speculation about a possible slowdown in the pace of interest rate hikes. We are not talking about the November Fed meeting, but about more distant prospects. Weak US economic statistics, which were published last week, significantly increased market concerns about the impending recession in America. Most analysts believe that signs of weakening economic growth may force the Fed to reduce the degree of aggressiveness towards interest rates. Goldman Sachs analysts predict that in December the US central bank will raise the indicator not by 75 bps, but by 50 bps. More slowdown is expected in February and March next year. According to experts, rates will be raised by only 25 bps during this period. A less hawkish long-term scenario severely limits the dollar's growth, even though the USD may receive another boost from the Fed tomorrow. This morning, the greenback sharply moved to decline in all directions, also against the yen. At the time of preparation of the material, the USD/JPY major plunged by more than 0.5% and fell below the 148 mark. Pessimistic expectations of key US economic data contributed to the rapid decline of the asset. Today traders will focus on the ISM index of business activity in the manufacturing sector for October. According to preliminary estimates, the indicator will decrease to 50.0 against the previous value of 50.9. Investors fear that, if this forecast is implemented, the Fed may indeed change its anti-inflationary plans to less hawkish ones. In this case, the differential in US and Japanese interest rates will begin to shrink, which will help the yen strengthen against the dollar.   Relevance up to 08:00 2022-11-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/325894

USD/JPY: The chart shows the movement of #USD/JPY on the hourly (H1) chart. There is a high chance for yen to rise against dollar. Quotes may hit £144.09 per dollar in the coming days, especially if the dynamic support level (yellow triangle area on the chart) within £147.12- £146.70 is broken. Otherwise, expect a decline in yen to the key resistance level of £148.72. Good luck!   Relevance up to 10:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326036

After yesterday's Federal Reserve rate hike by 0.75%, the dollar index rose by 0.54%, but the yen strengthened by 0.35%. We believe that the efforts of the Japanese authorities to attract investment to the country are beginning to show, and the yen is also slowly returning to the status of a safe-haven currency from turmoil in world markets. The S&P 500 was down 2.50% yesterday. Japan's balance of payments has been depressed for the past four months, balancing on the zero line. The August figure was 0.059 trillion yen, while in March it was 2.55 trillion yen. We believe that the September indicator, published next week, will show a more significant increase. For the development of a medium-term strengthening, the price must overcome the support of 145.50, which is approaching the MACD line of the daily scale. Settling below the level opens the way to 141.55. The Marlin Oscillator helps the price with all its strength. The price settled below the level of 147.50 on the four-hour chart. The price is preparing to overcome the support of the balance line, and the Marlin Oscillator is already in negative territory. We are waiting for further downward movement.     Relevance up to 04:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326104

USD/JPY staged a rebound late Wednesday and ended up closing the day flat near 148. Economists at TD Securities believe that the risk of intervention is high above the 150 level. USD/JPY may begin the process of forming a top “The combination of BOJ/MOF activity on intervention and suggestions that tweaks to YCC are possible if inflation and wages improve is a notable shift in rhetoric and may help the pair to begin the process of forming a top.” “A higher Fed terminal is a problem but we think MOF/BOJ is now the canary in the coalmine; given FX intervention has a poor track record generally, why bother employing it if you did not expect to make some policy shifts of your own.”  “We think intervention risk is very high above 150 in USD/JPY.”

The yen has been steady for most of the week and is hovering around the 148 line. In the North American session, USD/JPY is trading at 148.09, up 0.12%. Yen yawns after Fed rate hike The Federal Reserve’s rate meeting roiled the financial markets and sent the US dollar sharply higher against the majors, but the Japanese yen defied the trend and has held its ground. The recent interventions by Japan’s Ministry of Finance (MOF) appear to have chilled the appetite of speculators to test the yen, as the MOF may have drawn its ‘line in the sand’ at the 150 level. Still, USD/JPY has been on a prolonged descent, losing 22% of its value this year, and I would not be surprised to see the yen resume its downturn shortly. The Bank of Japan has shown time and time again that it is committed to an ultra-loose policy in order to support the economy, and has no interest in throwing a lifeline to the struggling yen, even with inflation rising. The US/Japan rate differential, which continues to widen, will weigh heavily on the yen, and unilateral currency interventions are unlikely to stem this downturn. After the dramatic FOMC meeting, the US nonfarm payroll report, which will be released on Friday, is almost a footnote. The consensus stands at a modest 200,000 new jobs for October, below the 260,000 reading in September. Investors will be keeping a close eye on wage growth, which came in at a strong 5.0% in September and is expected to drop to 4.7%. With the December rate hike currently a toss-up between 0.50% and 0.75%, a stronger-than-expected NFP would raise the likelihood of a 0.75% and boost the dollar. Conversely, a soft reading would reinforce expectations of the Fed easing to 0.50%, which would be bearish for the dollar. USD/JPY Technical USD/JPY is testing resistance at 148.08. Above, there is resistance at 149.76 147.43 and 145.16 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen holds own against dollar, NFP next - MarketPulseMarketPulse

USDJPY is oscillating above 148.00 as investors are awaiting the US NFP release for making informed decisions. Rising interest rates and weaker economic projections have impacted employment opportunities. An intervention in FX by the BOJ is expected as USDJPY has rebounded in the past few trading sessions. The USD/JPY pair is displaying a topsy-turvy performance above the critical support of 148.00 in the Tokyo session as investors have shifted their focus towards the release of the US employment data. The risk impulse is still favoring safe-haven assets as anxiety ahead of the US Nonfarm Payrolls (NFP) data is accelerating. S&P500 futures have hardly moved in the Tokyo session as investors have shifted to the sidelines. The US dollar index (DXY) is continuously struggling to surpass the immediate hurdle of 113.00. Meanwhile, the 10-year US Treasury yields have escalated to 4.16% as a hangover of hawkish guidance on the interest rates by the Federal Reserve (Fed) is far from over. Investors are in the mix on whether the Fed will pause its policy tightening measures after reaching the terminal rate proposed at 4.75% or will continue tweaking monetary policy as short-term inflationary expectations are still de-anchored. For December monetary policy decision, Friday’s NFP data will be very crucial. Continuous increments in interest rates are responsible for the postponement of expansion plans from corporate, which has trimmed the requirement for more candidates. Also, weaker economic projections have resulted in a halt in the recruitment process by various firms. It is also noticed that job additions are increasing but at a significantly diminishing rate from the past three months and October, month report is no new under the sun. As per the consensus, the US economy has added 200k jobs in the labor market vs. the prior release of 263k. Also, the Unemployment Rate is seen higher at 3.6%. On the Tokyo front, , investors are worried over Japan-North Korea renewed tensions after North Korea fired an unidentified ballistic missile over Japan, as broadcasted by NHK. For safety measures, Japan administration warned residents to take shelter from missile threats. Apart from that, a firmer rebound in the USDJPY pair has triggered expectations for repeat intervention by the Bank of Japan (BOJ) to support the Japanese yen against sheer volatility.

USDJPY comes under some selling pressure amid broad-based USD weakness. The mixed US jobs data does little to impress the USD bulls or lend any support. The risk-on impulse and the Fed-BoJ policy divergence should limit the downside. The USDJPY pair comes under some selling pressure during the early North American session and drops to a fresh daily low in the last hour. Spot prices, however, quickly recover a few pips from sub-147.00 levels, though remain in the negative territory amid the heavily offered tone surrounding the US Dollar. Read next: US Unemployment Rate Increased To 3.7%, UK Private Wealth Portfolios, PBoC Trying To Gain Access To Top Internet Companies Data| FXMAG.COM In fact, the USD Index retreats further from a two-week high touched the previous day in reaction to the mixed US monthly employment details, which, in turn, is seen exerting pressure on the USDJPY pair. The closely-watched NFP report showed that the US economy added 261K new jobs in October against the 200K estimated. Furthermore, the previous month's reading was also revised higher to 315K from the 263K. That said, a slight disappointment from the unemployment rate, which rose to 3.7%, overshadows the upbeat headline prints and weighs on the greenback. Furthermore, speculations that Japanese authorities might intervene again to soften any steep fall in the domestic currency contribute to offered tone surrounding the USDJPY pair. That said, the risk-on impulse - as depicted by a strong rally in the equity markets - should keep a lid on any further gains for the safe-haven JPY. Apart from this, a more hawkish stance adopted by the Federal Reserve should act as a tailwind for the greenback. This, in turn, should help limit the downside for the major and warrants some caution for aggressive bearish traders. It is worth recalling that Fed Chair Jerome Powell smashed expectations for a dovish pivot and said on Wednesday that it was premature to discuss a pause in the rate-hiking cycle. Powell added that the terminal rate will still be higher than anticipated, which remains supportive of elevated US Treasury bond yields. In contrast, the Bank of Japan, so far, has shown no inclination to hike interest rates and reiterated that it will continue to guide the 10-year bond yield at 0%. This results in a further widening of the US-Japan rate differential and favours the USDJPY bulls.

The USD/JPY pair is still developing according to our main scenario - it is declining. Friday's decline was 160 points towards the first and strong support at 145.45, determined by the embedded price channel line and MACD's indicator line of the daily chart. Today opened with a rising gap, which, if it closes later, will give the price additional technical conditions for further decline. Settling below 145.45 will open the way for the price to support 141.65. An alternative scenario suggests settling above 147.63 and rising to 150.10. On the four-hour chart, the price is developing below the balance lines (red) and the MACD line (blue), the Marlin Oscillator is in the downtrend zone. The situation favors a further decline. Target at 145.45. On this chart, the MACD line (148.00) is above the level of 147.63. Therefore, in order to develop the upward movement, it will not be enough for the price to overcome 147.63, it is also necessary to settle above the MACD line. In the previous two cases (marked with arrows on the chart), this line turned out to be an insurmountable resistance for the price.   Relevance up to 03:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326350

Technical analysis: USD/JPY has been trading sideways at the price of 147.45. I see potential for the breakout play. Trading recommendation: Due to the range condition, watch for potential breakout of the trading range to confirm further direction. In case of the upside breakout of the resistance at 148.80, watch for buying opportunities with the upside objective at 151.85. In case of the downside breakout of the support at 145.65, watch for selling opportunities with the downside objective at 141.85     Relevance up to 08:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/299866

USDJPY climbs above 146.80 as the traction is returning in the risk-off profile. US yields are advancing after hawkish commentary from Fed policymaker Barkin. Japanese administration is set to approve more stimulus and hike taxes for ultra-wealthy individuals. The USDJPY pair has given an upside break of the sideways profile in the Tokyo session. Earlier, the asset resurfaced from 146.40 in the early Tokyo session. The risk profile is turning sour as investors are turning cautious ahead of the outcome of the US mid-term elections. The mighty US dollar index (DXY) has refreshed its day’s high at 110.40 as the risk aversion theme is gaining traction. Mild gains recorded in the S&P500 futures have been eased as the risk appetite is shrinking. The 10-year US Treasury yields have reached 4.23% after hawkish guidance from Richmond Federal Reserve (Fed) President Thomas Barkin. Fed policymaker has contrary views to the chatters over a slowdown in the pace of rate hikes. Current interest rates are near the proposed one at 4.80% and smaller rate hikes will be witnessed ahead. Fed Barkin believes that the ongoing pace of rate hiking will continue as inflationary pressures have not displayed signs of exhaustion yet. The outcome of the US mid-term elections seems to favor the Republicans. A note from ANZ Bank states that “We regard a Republican-controlled Congress as the most likely scenario (55%). Not far behind, at 41%, is a split Congress, with a Republican-led House and a Democrat Senate.” An occurrence of the same could bring political instability to the economy. On the Japanese yen front, Tokyo bulls are facing pressure as Japanese Prime Minister Fumio Kishida is set to approve USD198 billion in the additional budget for the economic stimulus plan, as reported by Bloomberg. The government also “may opt to hike taxes on ultra-wealthy individuals with annual incomes of more than JPY1 billion ($6.8 million).”

USD/JPY: The chart shows the movement of #USD/JPY on the 30-minute (M30) chart. Seeing that quotes reached the support level of £146.05 yesterday, it is likely that a correction will take place. The theoretical target is the level of £147.69. There will be no correction if the support level of £ 146.46 is broken. Good luck! Relevance up to 08:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326492

Recently, the king dollar has increasingly begun to show signs of weakness, even paired with the main loser of the year - the yen. Does this mean that USD has already exhausted its bullish potential? The dollar's wings were clipped For almost the entire past year, the US currency has been the star of the foreign exchange market. Thanks to the Federal Reserve's aggressive policy, the greenback was able to strengthen significantly in all directions, but most of all against the yen. Since the beginning of the year, the dollar has risen in price against the JPY by more than 20%. Such impressive dynamics was facilitated by a sharp increase in the differential of interest rates in the United States and Japan. In order to curb record high inflation in the country, US officials have already conducted several rounds of rate hikes over the past eight months. Meanwhile, their Japanese counterparts continue to maintain an ultra-soft exchange rate and keep rates in negative territory. Last week, the divergence in the monetary policy of the Fed and the Bank of Japan escalated even more. The reason for this was the hawkish statement of the head of the US central bank. Fed Chairman Jerome Powell made it clear that the central bank does not intend to slow down the pace of tightening yet and the final level of interest rates in America may be significantly higher than previous estimates. Now most analysts expect that the indicator will reach 5.00% next year. Such a scenario assumes several more cycles of aggressive rate hikes, which should ensure a steady growth of the dollar for at least several more months. However, why does the US currency ignore Powell's hawkish comments now and weaken in all directions, including against the yen? Sluggish economic data is to blame for everything. The report on employment in the non-agricultural sector of the United States published last week showed that the unemployment rate in the country rose to 3.7%. This further increased traders' fears about the recession and its possible side effects. If the US economy continues to show signs of slowing down, the Fed may well reduce the degree of its aggressiveness towards interest rates, even despite the populist promises of Powell. The likelihood that the US central bank will move to less hawkish actions is a strong negative factor for the dollar, which now overshadows any positive catalysts. What can bring the dollar back to growth? Yesterday, the dollar experienced another loud sell-off in all directions, including against the yen. The intraday low for the USD/JPY pair was the level of 146.08, which is 1.9% lower than last week's high. At the start of Tuesday, it found the strength to return to growth again. But its dynamics looks modest: at the time of release, the quote rose by 0.1%. The dollar is growing ahead of the midterm elections to the US Congress. It is also slightly supported by news from Japan. This morning it became known that Japanese Prime Minister Fumio Kishida is going to approve an additional stimulus budget of $198 billion. In addition, a summary of the BOJ's opinions was published on Tuesday. The report showed that during the October BOJ meeting, 8 out of 9 members of the central bank's board stressed the importance of maintaining an ultra-soft monetary policy, since price growth in the country is not sustainable. Only one official said that further acceleration of inflation could not be ruled out, and therefore the central bank should be ready to adjust its monetary rate. As we can see, hawkish sentiments are beginning to appear in the ranks of the BOJ. But one opinion is clearly not enough for the BOJ to radically change the strategy it has been following for almost ten years. Some analysts believe that the central bank may move to normalize its policy in the second quarter of 2023, when the term of office of the current head of the BOJ, Haruhiko Kuroda, ends. He is due to leave office in April. As long as Kuroda's dovish stance remains at the helm, the BOJ's position will remain unchanged. This could further weaken the yen, especially if rumors of a possible slowdown in the pace of tightening in the US are not confirmed. We can see the implementation of such a scenario in the near future – after this week's release of US inflation statistics for October. If the consumer price index drops slightly, the market will regard this as another signal of the continuation of an aggressive anti-inflationary campaign in America. In this scenario, the dollar can get a powerful boost for growth. Otherwise, if the inflation data turns out to be weaker than forecasts, we may witness a further decline in the green currency and a strengthening of the yen.       Relevance up to 09:00 2022-11-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/326502

The Japanese yen continues to have a quiet week. In the European session, USD/JPY is trading at 146.34, down 0.18%. Household spending rebounds Japan’s household spending bounced back in September, with its first gain in three months. Household spending rose 1.8% MoM, despite higher inflation. This reading follows a strong retail sales report for September, with a gain of 1.1%. The sharp drop in Covid cases in September contributed to the strong numbers. The question is whether the uptick in household and consumer spending will last. Inflation hit 3% in September for the first time in over 30 years, and inflation above the 3% level starts to squeeze spending in real terms. The government is hoping that the finance package that was announced today will reduce inflation and boost growth. The Japanese yen has improved lately and joined the bandwagon on Friday, as the US dollar retreated after a mixed nonfarm payrolls report. Still, the outlook for the yen, which has plummeted about 20% this year against the dollar, does not look good. The Bank of Japan hasn’t budged from its ultra-loose policy, despite the declining yen and rising inflation. The Federal Reserve is far from winding up its aggressive rate policy, with inflation still running high. With the BoJ maintaining a cap on JGB yields, the US/Japan rate differential continues to widen, which is pushing the yen lower. At the BoJ’s meeting in late October, the BOJ maintained all policy settings as well as its dovish guidance. Essentially, it was more of the same from the BoJ, with a strong likelihood that the BoJ will not make any changes before Governor Kuroda ends his term in April 2023. USD/JPY Technical There is resistance at 147.07 and 148.45 145.28 and 144.20 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

USDJPY rebounds from a two-week low to print the first positive day in four. Treasury yields reverse the previous day’s losses as fears of US government gridlock join recession woes, China covid concerns. Japan’s current account surplus slumps in the H1 fiscal year but improved in September. US inflation, updates from mid-term elections will be crucial for near-term directions. USDJPY prints a mild recovery from a two-week low around 145.70-80 during early Wednesday morning in Asia. In doing so, the Yen pair snaps a three-day downtrend amid the market’s cautious mood. That said, sentiment fades the previous optimism as the latest updates from the US mid-term elections suggest the US government gridlock. With this, the fears of higher rates also gain attention amid the Republican push for increasing the debt ceiling. Elsewhere, the worsening coronavirus conditions in China also contribute to the latest risk-aversion, as well as to the USDJPY prices at a distance. China reports the highest levels of new COVID cases in six months, with the latest addition of 8,335 for November 08, while marking a fresh virus-led lockdown in Guangzhou’s second district. It should be noted that Japan reported a notable monthly Current Account surplus for September but failed to ignore the heaviest decline in the surprise when considered for the first half (H1) of the current fiscal year (FY) since 2008. Additionally, talks of Bank of Japan’s (BOJ) meddling and the recently softer US data joined mixed concerns at the Fed to escalate the US Treasury yields and the USDJPY prices of late. Amid these plays, the US 10-year Treasury yields regain upside momentum past 4.14% while the two-year counterpart also print mild gains near 4.66% level. It should be noted that the US stock future print mild losses while the Asia-Pacific equities closed in the red despite Wall Street’s three-day uptrend. Moving on, political and covid updates may entertain USDJPY traders ahead of Thursday’s US Consumer Price Index (CPI) for October. Technical analysis The 50-DMA defends USDJPY buyers around 145.50 but the recovery needs validation from a three-week-old resistance line near 147.45.

The yen has completed the minimum program in the game against the dollar - reached an important support - the area where the MACD indicator line intersects with the price channel line on the daily chart. The MACD line is now at 145.33, so in order to break through the price to reach the target of 141.70, it should settle below this level. If the idea fails, then with the price reversal from the achieved supports, we will see the development of resistance at 147.63. Today's economic data provided support for the dollar bears and yen bulls. Japan's balance of payments in September increased from 0.694 trillion yen (and significantly revised upwards from 0.059 trillion) to 0.909 trillion, bank lending in October increased from 2.3% y/y to 2.7% y/y. And in China, the CPI showed a decline (that is, normalization) from 2.8% y/y to 2.1% y/y. On the four-hour chart, the price is trying to go under the support of 145.33. The Marlin Oscillator is slowly but surely moving deeper into the bulls' territory. Advantages of the decline scenario.   Relevance up to 09:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326628

Covid cases rise in China to levels last seen in April, knocking sentiment and raising the spectre of lockdowns and supply disruptions again  Source: shutterstock Macro outlook Global Markets: US stocks made some unconvincing gains yesterday, recovering from a steep loss at one stage after pulling back from higher levels. Both NASDAQ and S&P500 were up about half a per cent at the close. Chinese stocks fell again, probably as covid cases pushed up to levels we haven’t seen since April (see also China section below). Despite all the positive talk about slowly unwinding zero-Covid and experimenting with bigger events, it looks as if more lockdowns might be on their way. US equity futures are still pointing to small increases at today’s open. EURUSD pushed a little bit further above parity, reaching 1.0078 now. The AUD has recrossed above 65 cents. Cable has risen to 1.1548 and the JPY has dropped back to 145.50. Asian FX was mostly positive across the board yesterday. The KRW was the main outperformer, dropping to 1385. Bond yields did at least stop rising, which means that the bond and equity/currency markets are more in synch than they have been in recent days. The 2Y US Treasury yield backed off by 7.1bp, while the 10Y yield came back by 9bp taking the yield to 4.123%. G-7 Macro: US Mid-term elections took place yesterday, though the absence of much on the newswires suggests that we still don’t have much idea what the outcome is going to be, though most observers are looking for Republican gains. Our US team will be posting updates as and when possible, so keep an eye out on https://think.ing.com/macro/north-america. Yesterday’s US October NFIB survey came in a little lower, but in line with expectations. There was a further small decline in the index for higher selling prices, which now sits right on 50% of firms. Eurozone retail sales yesterday were actually a little stronger than expected, but still fell 0.6% YoY. It is a very light calendar for macro releases today.  China: Covid cases have climbed. In Guangzhou city, and factory delivery is now being affected by restrictive land logistics, which could impact export delivery even though ports are currently operating “normally”. These effects should be reflected in the coming November export data.  October CPI should show inflation remaining very subdued due to weak consumption and as indicated by recent service sector PMIs even though the data is for October, the month of the Golden Week holidays. In contrast, PPI should be in year-on-year contraction but should show faster month-on-month growth from higher energy prices. Still, there is no inflation risk as producers cannot pass increased costs to consumers. Instead, this should result in thinner profit margins. Korea: The jobless rate stayed unchanged at 2.8% in October, which was slightly better than the market consensus of 2.9%. But we think the details were soft. Major industries such as manufacturing, whole/retail sales and transportation lost jobs. And only the hotel and restaurant sector saw an increase in employment. By employment type, the numbr of wage workers declined for a second month with temporary employment (less than one year of contract) down the most. This is probably because the public vocational program ends at the end of the year. Nonetheless, the labour market, especially services, seems like it is holding up relatively well despite higher interest rates and the slowdown in economic activity.  On the KRW, the last couple of days' price action shows why we call the KRW a high beta currency. The KRW is now around the 1380 level and we will probably see a stronger KRW for a while. However, it is still difficult to interpret this as a change of direction. Foreign investment returned back to local equity markets and credit stress has been relieved temporarily. But the dollar supply/demand conditions have not changed.  Until 1Q23, the  Fed’s tightening and the possibility of a further deterioration in the trade balance due to high energy demand over winter remain negative factors for the KRW. What to look out for: US midterm election results and China inflation South Korea unemployment (9 November) Japan trade balance BoP (9 November) China CPI and PPI inflation (9 November) US mortgage application (9 November) Fed’s Williams speaks (9 November) Philippines GDP (10 November) US CPI inflation and initial jobless claims (10 November) Fed’s Barkin, Logan and Waller speak (10 November) Japan PPI inflation (11 November) Malaysia GDP (11 November) US Univ of Michigan sentiment (11 November) Fed’s Mester and George speak (11 November) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Summary:  Market sentiment improved further yesterday before dipping slightly overnight, as China Covid cases are on the rise, pushing back against hopes for a lifting of Covid restrictions. In the US mid-term elections, Democrats are slightly outperforming expectations, possibly set to retain control of the Senate even if Republicans look set to take narrow control of the House of Representatives. FX Trading focus: Next test for struggling USD over tomorrow’s US CPI data. The US mid-term election results are still rolling in this morning in Europe, with the Republicans set to take a small majority in the House and the Senate outcome looking at risk of riding on the outcome of a Georgia run-off election on December 6th as neither candidate looks set to achieve the 50% required for elections there. Remember that we had a similar setup after the 2020 election when two Senate races in Georgia were only decided in a January 5 run-off. There are no real market conclusions from the outcome, even if the Georgia race gives the Republicans a majority in the Senate, as the only scenario that would have guaranteed dramatic potential for fiscal policy would have been the Democrats surprisingly retaining both houses. Other conclusions: Trump is a liability for the Republican party, which likely would have done far better without his involvement, and forensic studies of split-ticket voting will likely confirm this, and it will be interesting to see if this deters his possible renewed ambitions for the presidency. Finally: razor thin Georgia results keep alive the narratives around election fraud, etc. Can the US move beyond its dysfunctional elections by 2024 or will the republic face an existential test in that election cycle? Back to incoming data, with tomorrow’s US October CPI in focus. Let’s recall that the September CPI data point was a real shocker as many qualified slicers and dicers of the data were looking for a deceleration in the core data rather than the acceleration we got. That has me leaning for a slightly softer release tomorrow. But I am far more interested in the nature of the market reaction. As I have discussed the last couple of days on the Saxo Market Call podcast, I find the most interesting test for the US dollar one in which we see inflation decelerating and US treasury yields perhaps easing a bit lower, but in which we also see risk sentiment weak as equity and bond markets are starting to decouple, as equities begin to fret recession rather than being merely led around by the nose by the treasury market. If that is the scenario we get and the USD weakens, then I think USD weakness can extend a bit more forcefully for a time, if not, then the USD could yet reject this breakdown attempt. I withhold judgement for now, as the USD has not yet broken down. But the easiest thing to do is to simply judge what happens on the charts in the wake of the data release (not knee-jerk, but how the day closes), as we have a number of clear-cut levels in play for the major USD pairs. Chart: USDJPY USDJPY has traditionally been a strong focus over US data surprises over the years and will be in focus with the macro event risk of the week, if not the month, coming up tomorrow in the form of the US October CPI release. Reaction in yields and risk sentiment are both worth watching as I have cooked up some thoughts of late (see above) on whether US treasury markets and equity markets could move out of correlation, i.e., that risk sentiment may have a hard time celebrating a drop in treasury yields. So, a weaker than expected US CPI report together with falling treasury yields, but also together with weak risk sentiment could provide the strongest support for the JPY here in a broad sense, though it might be felt more forcefully in JPY crosses. Regardless, if the JPY finds bids tomorrow, the 145.00 level will be a huge focus in USDJPY. Table: FX Board of G10 and CNH trend evolution and strength.The USD is clearly down, but will only be out on sticking further weakness in the wake of the US CPI release tomorrow. Elsewhere, note the sterling momentum turning badly south and SEK trying to look higher, not a surprise given European equities having rallied vertically for weeks – looking a bit much. Table: FX Board Trend Scoreboard for individual pairs.EURGBP is one to focus on around the 0.8800 level. JPY crosses are interesting in places as well as yields have consolidated a bit lower – look at the 165 area in GBPJPY, for example. But it is all about key USD levels after the US data tomorrow, including 1.0100 in EURUSD, 0.6522 in AUDUSD, etc… Upcoming Economic Calendar Highlights 1200 – Mexico Oct. CPI 1300 – UK Bank of England’s Haskel to speak 1530 – EIA's Weekly Crude and Fuel Stock Report 1630 – UK Bank of England’s Cunliffe to speak 1700 – World Agriculture Supply and Demand Estimates (WASDE) 0001 – UK Oct. RICS House Price Balance 0100 – US Fed’s Kashkari (Voter 2023) to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-on-edge-ahead-of-the-us-cpi-data-tomorrow-09112022

The Japanese yen has steadied after posting strong gains on Tuesday. In the European session, USD/JPY is trading at 145.67, up 0.03%. Japan recorded stronger-than-expected gains in household spending and retail sales, but it’s questionable whether this positive trend will continue. Inflation hit 3% in September for the first time in over 30 years, raising concerns, but inflation is still at levels that other major central banks can only dream of.  The government is hoping that the finance package that was announced on Tuesday will reduce inflation and boost growth. Still, the outlook for the yen, which has been on a prolonged downturn against the dollar, remains grim. The Bank of Japan is unlikely to veer from its ultra-loose policy, despite the declining yen and rising inflation, unless inflation continues to rise. The Federal Reserve is expected to deliver additional oversize rate hikes, which will widen the US/Japan rate differential and likely push the dollar lower. At the BoJ’s meeting in late October, it was business as usual as policy makers maintained their dovish guidance. The BoJ remains an outlier amongst the major central banks, with a growing realization that any changes in policy will have to wait until Governor Kuroda’s term ends in April 2023. In the US, the dust from the mid-term election hasn’t yet settled. The Republicans are expected to retake the House, but with a very slim majority, while the makeup of the Senate is unlikely to be determined for several weeks. The election hasn’t had much impact on the movement of the US dollar, as investors are focussed on the US inflation report on Thursday.   USD/JPY Technical There is resistance at 147.07 and 148.45 145.28 and 144.20 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Summary:  When Sep CPI came lower than prior but higher than expected, S&P 500 index futures (ESZ2) had immediate reaction selling off ~3% and USDJPY - best carry trade among G10 yielding 5% - also rallied 100 pips so these two are expected to be most obvious ones to trade and show instant price action in terms of sensitivity to the data. First headline squawk highlighted in red that I saw this morning on my Bloomberg terminal was “BITCOIN DROPS BELOW $16,000…”. Last time Bitcoin (BTCUSD) dipped below $16,000 was 2 years ago and now it has fallen 77% from all time high $69,000 that was traded 1 year ago. Also to put this price action into perspective, Bitcoin/gold ratio has declined to just over 9 times compared to 35 times last year. When I checked on coinmarketcap.com, FTX - on the verge of potential bankruptcy - was the fourth biggest cryptocurrency spot exchange based on traffic, liquidity & volume, hence the risk-off sentiment has well and truly arrived as some of the notable crypto related stocks got hammered – COIN -10%, MSTR -20%, GLXY -16% while safehaven US dollar bid up broadly heading into October US CPI release tonight at 9:30pm. However we are yet to see significant systematic risk as VIX sitting at 26 with futures term structure of contango and high yield junk bond ETF (HYG) has not crashed trading 2.2% above recent low $70.40 as well as credit spread is also off 100bps below from the recent high 600bps. The current macro backdrop continues to focus and assess on the relative impact on inflation from rising real yield (10 year at 1.7%) or aggressiveness of interest rates hikes while Fed’s QT has been shrinking its balance sheet by about 3.2% from $8.9t to $8.6 in the last seven months. Even though last week’s unemployment rate looks to have bottomed from 3.5% to 3.7%, two of the mostly watched yield curves – 3m10y and 2y10y - still remain inverted at 9bps & 48bps respectively and we are not seeing substantial steepening happening yet therefore the futures implied terminal rate ~5% in 2Q next year may still have further rooms to move higher despite recent FOMC meeting’s down-shift signal and Powell’s cumulative tightening of 375bps, the most in one year since 1980.  The previous headline Sep CPI numbers 8.2% YoY showed major drivers were food, medical and shelter contributing nearly 1% each while energy and cars cooled. This time, energy may have gone up a bit and services would remain as a key area to watch as it has not stopped rising every month since Aug last year. The most recent PCE figures for Sep was 6.2% that is not only above Fed’s projection of central tendency 5.3%-5.7% but also far from its longer run target of 2%. After all, we have not seen sub 8% headline CPI since February number this year and actual result was less than estimate only once for July but given the estimate for tonight’s figures is anticipated at 7.9%, meeting this estimate may be sufficient for the equity market to find some relief rally. On 13 October, when Sep CPI came lower than prior but higher than expected, S&P 500 index futures (ESZ2) had immediate reaction selling off ~3% and USDJPY - best carry trade among G10 yielding 5% - also rallied 100 pips so these two are expected to be most obvious ones to trade and show instant price action in terms of sensitivity to the data. S&P 500 had a decent rebound last month digesting earnings as 456 companies have now reported with earnings surprise of 3% that is lowest in the last two years post Covid. S&P 500 forward earnings per share (EPS) estimated at 226 makes the PE ratio 16.6 times or 6% yield based on last night’s close 3,748 but again there-are-reasonable-alternatives (TARA) as 2 year treasury is at 4.6% and IG corporate bond ETF (LQD) giving nearly 6% with relatively lower implied volatility compared to SPY (13 vs 24). Lastly USDJPY is trading near a key level 145 that previously acted as resistance in September then turned into support level in the last two weeks. Correlation between USDJPY and US 2 year treasury yield remains high so the pair should be able to at least consolidate assuming 145 holds while long out-of-the-money call options could also work given 1 month implied volatility has fallen from 17 to 11 in recent weeks and 2 vol lower than realised volatility. Alternatively by taking more neutral to bullish view with possible Japan intervention, bull put spread (credit) could be considered using the same level 145 as the lower strike to long put and sell higher strike – say 148.50 that is half way between the recent high 152 and 145 – giving net premium of about 200 pips for one month expiry. Source: https://www.home.saxo/content/articles/forex/st-note---us-oct-cpi-preview-10112022

USDJPY comes under some selling pressure on Thursday amid a modest USD weakness. The Fed-BoJ policy divergence should act as a tailwind and help limit losses for the pair. Traders also seem reluctant and prefer to wait for the release of the crucial US CPI report. The USDJPY pair struggles to capitalize on the previous day's goodish rebound from the 145.15-145.10 support zone, or a nearly two-week low and meets with a fresh supply on Thursday. The pair remains on the defensive through the early European session and is currently placed near the daily low, just above the 146.00 round figure. A modest US Dollar downtick, amid some repositioning trade ahead of the key US macro data, turns out to be a key factor prompting some selling around the USDJPY pair. The downside, however, remains cushioned as traders seem reluctant to place aggressive bets ahead of the latest US consumer inflation figures, due later this Thursday. The crucial US CPI report will play an important role in determining the Fed's policy tightening path, which should influence the near-term USD price dynamics and provide a fresh directional impetus to the major. Nevertheless, the markets are still pricing in the possibility of at least a 50bps Fed rate hike move in December. In contrast, the Bank of Japan, so far, has shown no intentions to raise interest rates. Moreover, the BoJ remains committed to guiding the 10-year bond yield at 0%. In fact, BoJ Governor Haruhiko Kuroda reiterated on Thursday that the central bank must continue to underpin a fragile economic recovery with loose monetary policy. Kuroda added that economic uncertainty is extremely high and deeper negative rates are an option if needed. This marks a big divergence in comparison to a more hawkish Fed and supports prospects for the emergence of some buying around the USDJPY pair. Furthermore, the fact that the BoJ chief brushed aside hopes for any direct forex market intervention to safeguard the domestic currency adds credence to the positive bias. Hence, any subsequent slide might continue to attract some buyers and is more likely to remain limited, at least for the time being. That said, a convincing break below the 145.00 psychological mark will negate the constructive outlook.

After the most powerful currency intervention by the Bank of Japan over the past three weeks, USD/JPY stopped twice at the support level of 145. This was not in favor of buyers, but it indicated where their stop orders should be. Important data on inflation will be released in the US today, where many expect to see a decrease. In this regard, traders should enter the market by selling from current prices, aiming to update the level of 145. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326773

The Japanese yen has skyrocketed in today’s North American session. USD/JPY is trading at 141.81, down 3.1%. US inflation drags down the dollar The October inflation report was lower than expected, triggering a mass rush from the US dollar. The yen has jumped on the bandwagon and risen to its highest level since September 22nd. Inflation didn’t exactly tumble, but investors seized on the fact that both the headline and core readings were lower than projected, raising hopes of a soft landing for the economy. Headline CPI dropped to 7.7%, down from 8.2% in September and below the consensus of 8.0%. Core inflation slowed to 6.3%, down from 6.6% and lower than the forecast of 6.5%. The surprisingly low numbers have turned rate pricing on its head. Prior to the inflation release, the markets had priced in 55% for a 50 bp increase and 45% for a 75 bp hike. This has changed to 80-20 in favor of a 50 bp hike, which has sent the US dollar into a broad retreat. Despite the festive mood on Wall Street today, the Fed hasn’t turned dovish – a 0.50% rate hike is still a sizeable move, and the terminal rate could end up being as high as 5.50% The yen has steamrolled the dollar today, but will this be just a blip in the yen’s prolonged descent? Today was all about US dollar weakness rather than any newfound strength in the yen. The next Fed meeting is a month away, with additional inflation and employment releases prior to the meeting. If those releases are stronger than expected, expectations of a 0.75% hike will grow and the US dollar will likely move higher. The US/Japan rate differential continues to widen and will keep weighing on the yen, with no sign that the Bank of Japan will throw the currency any lifelines. The dollar may have taken a licking today, but tomorrow is a new day. USD/JPY Technical USD/JPY has broken below several support levels today. The next support level is 139.66 147.07 and 147.74 are the next resistance levels This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen soars after US inflation surprise - MarketPulseMarketPulse

The yen has finally decided to do what it has been preparing for for three weeks – to break into the support zone of the September consolidation. Yesterday's drop was 546 points (-3.71%). It stopped falling between the price channel lines marked at 139.70 and 141.70. At the moment, the price is above 141.70, but significant key targets have not been achieved, so we are waiting for the continuation of the selected movement. The targets are: an intermediate target (weak level) at 139.70, a stronger level at 138.45, the final target of the movement at 136.75 is the consolidation of the third week of August. On the four-hour chart, a powerful movement started from the MACD indicator line, after the third rebound from it (marked by arrows), so there is every opportunity to continue the short- and medium-term decline. We are waiting for the price to settle under the level of 141.70.  

The upbeat market mood remains intact on the last trading day of the week as investors cheer the soft inflation data from the US and news of China easing the Covid-related restrictions. The US Dollar Index continues to edge lower below 108.00 after having lost more than 2% on Thursday and global stock indices push higher. Bond markets in the US will be closed in observance of the Veterans Day holiday but Wall Street will operate at the usual hours. The US economic docket will feature the University of Michigan's Consumer Sentiment Survey (preliminary) for November and investors will keep a close eye on central bank speakers ahead of the weekend. The US Bureau of Labor Statistics announced on Thursday that inflation in the US, as measured by the Consumer Price Index (CPI), declined to 7.7% on a yearly basis in October from 8% in September. The Core CPI, which excludes volatile food and energy prices, fell to 6.3% from 6.6% in the same period. With both of these readings coming in below market expectations, the CME Group FedWatch Tool's probability of a 50 basis points Fed rate hike in December jumped above 80% from 50% earlier in the week. In turn, major equity indexes in the US registered impressive gains, the US Dollar suffered heavy losses and the benchmark 10-year US Treasury bond yield declined toward 3.8%, losing nearly 7% on the day. US Inflation Analysis: Hiking is hard in the fog, Dollar set to decline (until the next CPI). Earlier in the day, China's National Health Commission announced that they have decided to reduce the required quarantine times for travellers and people who had close contact with identified Covid cases. The Shanghai Composite Index was last seen rising nearly 2% on the day and Hong Kong's Hang Seng Index was up 6.8%. Reflecting the risk-positive market environment, US stock index futures are rising between 0.5% and 0.7%.  The UK's Office for National Statistics (ONS) reported on Friday that the Gross Domestic Product (GDP) grew at an annualized rate of 2.4% in the third quarter, compared to the market expectation of 2.1%. Other data from the UK showed that Industrial Production expanded by 0.2% on a monthly basis in September. GBPUSD largely ignored the latest data and was last seen moving sideways slightly above 1.1700. EURUSD registered impressive gains on Thursday and continued to edge higher during the Asian trading hours on Friday. The pair was last seen trading at its highest level since mid-August slightly above 1.0200. USDJPY lost more than 400 pips on Thursday and touched its weakest level in seven weeks near 140.00 before staging a rebound on Friday. At the time of press, USDJPY was up 0.5% on the day at 141.65. Fueled by plunging US Treasury bond yields, gold price rose nearly 3% on Thursday and registered one of its largest one-day gains of the year. XAUSD is currently trading above $1,750 and it's up nearly 5% since the beginning of the week. Bitcoin gained 10% on Thursday after having lost more than 20% in the first half of the week. BTCUSD, however, seems to be having a difficult time gathering bullish momentum early Friday as markets keep a close eye on developments surrounding the FTX drama. As of writing, Bitcoin was down nearly 2% on the day at $17,250. Ethereum trades in negative territory at around $1,250 early Friday following Thursday's 17% gain. California financial regulator announces FTX investigation. Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos bounce as FTX CEO vows to do right by investors.

Summary:  Equity and commodity markets seem to be on a risk-on frenzy for now, supported by the surprise weaker US CPI print, as well as China introducing 16 property stimulus measures at the weekend, following the easing of some Covid restrictions. However the market doesn’t have too far to look for the next catalysts that could continue the rally, stunt it, or see it take a haircut. Up next we watch US producer prices, and US retail sales, which may give the Fed further ammunition to slow down its pace of tightening if the numbers show the US economy is continuing to crack. UK’s outlook, Japan’s Q3 GDP growth rates, as well as China’s industrial production, retail sales, and fixed investment data are also key to watch. As well as corporate earnings from Nvidia and the Aussie dollar.   US eco data and news on tap; US producer prices, retail sales and big retail earnings Investors will be looking for further signs that point to a slowdown in inflationary pressures. In the October CPI release last week, we saw a fall in health insurance costs due to technical factors, which added to the slowing of the service component of core CPI. This is important to the calculation of core PCE, which the Fed watches most closely. As a result, this week investors will pay more attention to the October producer prices index (PPI) numbers on Tuesday, as they try to gauge if the service component of core inflation is slowing. Bloomberg consensus estimates PPI will rise 8.4% Y/Y and +0.3% M/M for core PPI or +7.2% Y/Y. If the numbers are weaker than this, it could provide further support to the equity market rally, as the Fed would garner more catalysts to slow its pace of hikes. Then on Wednesday, retail sales are on watch and are expected to have rebounded, rising 1% in October after stagnating the month earlier. On top of that, a bevy of large retailers, report earnings including Home Depot, Walmart, and Target, which will help investors gauge the health of the world's largest economy. Elsewhere in America, Canada will release inflation and housing starts data. Look for hints on the Fed’s hiking path in Fed speak this week Investors will get to gauge what the Fed’s latest thinking is, as we hear from a number of Fed officials this week, who will likely focus on the softer CPI print last week and if it’s changed their assessment of inflation and interest rate rates. Remarks from Fed Governor Christopher Waller will likely be a focus as Waller previously proposed not to pause, until core PCE falls below 3% on a monthly annualized basis. On top of that, speeches will be made from Neel Kashkari and Loretta Mester on Thursday G-20 meeting brings focus back on geopolitics and markets G-20 leaders will be meeting Bali, Indonesia this week on Tuesday and Wednesday, and the agenda is likely to be centered around geopolitical tensions and financial market risks. It is interesting to note that China has signaled the easing of its zero covid policy ahead of this event, despite the recent surge in cases. The meeting between Biden and Xi today will be key in the current cold war environment, especially with respect to the US tech controls and the stance on Taiwan. Other key areas of focus will be the Ukraine war, despite Putin’s lack of attendance at the event, as well as the global inflation concerns and what the global tightening wave means for financial markets. Lastly, climate change is likely to remain on the agenda, with progress stalling over the year as the focus shifted to meeting the world’s energy needs. Japan’s Q3 GDP and October CPI to see the drag from a weaker JPY Japan reports preliminary Q3 GDP on Tuesday, followed by the October CPI print on Friday. Growth is likely to weaken in the third quarter, with Bloomberg consensus looking at 1.1% QoQ print from 3.5% previously, mainly driven by a drag from net exports due to the surge in import prices. However, some support may be seen from private consumption with labor cash earnings and retail sales having stayed upbeat in the quarter. Meanwhile, business investment also likely improved, as suggested by large manufacturer’s Tankan report for the third quarter. The outlook also remains supported by the series of fiscal measures announced by the government, along with increased tourism. October CPI is likely to surge to fresh highs of 3.7% from 3.0% previously, with the core measure seen at 3.5% from 3.0% in September, but the outlook is likely improving as the Japanese yen recovers. UK’s medium-term fiscal outlook will be closely watched The UK updates markets on its fiscal plans in a week of reckoning following the collapse of Liz Truss’s administration. Chancellor of the Exchequer Jeremy Hunt on Thursday presents the medium-term outlook accompanied by updated economic forecasts. He’ll try to further restore investor confidence after his predecessor’s announcement of unfunded tax cuts created panic in markets, but spending cuts and tax rises remain on the horizon. While fiscal consolidation is still needed, excessive frontloading will mean more economic pain and backloading could impinge on government credibility. It’s a delicate balance, especially with double-digit inflation and recession concerns also on watch. China’s October activity data are expected to be weak October retail sales in China are expected to decelerate to +0.7% Y/Y according to the Bloomberg survey from +2.5% Y/Y in September as the surge in COVID cases and pandemic control restrictions took their toll on consumption. Industrial production is estimated to slow to +5.3% Y/Y in October from +6.3% Y/Y in September, amid Covid-related restrictions, slower auto production, and weak exports. Nvidia results in focus. Can its outlook and results continue to move its shares off its low? Nvidia (NVDA) is set to release third-quarter earnings on Wednesday, November 16 with analysts expecting revenue of $5.84bn down 18% y/y and EBITDA of $2.1bn down from $3.2bn a year ago and EPS of $0.71 down 30% from a year ago. Nvidia shares appear to be gaining traction of late, so its results will be watched closely, especially its outlook. If they are better than expected, you could see sentiment remain supported and it shares could continue to rebound. NVDA shares have risen about 40% in four weeks, but its shares are still down 52% from its high. Nvidia has been suffering amid restricted chip sales to China and declining PC demand. Pay close attention to if its results meet or exceed expectations, its outlook and what it sees as the potential full effects on the US/China chip restrictions. For detailed analyst, refer to Saxo’s Head of Equity Strategy, Peter Garnry’s note. AUDUSD is now up 9% from its low, gaining extra legs on China’ property rescue package  The Aussie dollar is gaining on the back of China's property sector rescue package. China introduced 16 property measures to address the developer liquidity crisis; from blanket debt extensions, to loosening down-payment requirements for homebuyers. On top of that that, China’s eased covid restrictions; shortening to five-day quarantines, which is aimed at reducing the economic impact of Covid Zero, rather than relaxing restrictions. While the market still awaits further easing developments, the market is buoyed on forward looking hopes that the AUD will continue to be bid on commodity demand picking up. As commodity hope-demand picks up, so have respective commodity prices; the iron ore (SCOA) price is back above US$90 after rising 6% last week, the copper price lifted about 5% last week, and the lithium price is also higher, with carbonate prices up 118% year-to-date. The next key event to watch for the Aussie dollar is the RBA meeting minutes; released Tuesday November 15, which should give more clues on the course of the central bank’s hikes after it made a lower-than-expected 25bps rate hike this months. Major China Internet companies are scheduled to report this week Meituan (03690:xhkg) kicks off the busy earnings calendar of  China Internet companies on Monday, followed by Tencent (00700:xhkg) on Wednesday, Alibaba (09988:xhkg) on Thursday, and JD.COM (09618:xhkg) on Friday. Analysts estimates for top line growth in Q3 are subdue on weak consumption recovery and macro environment. Slow gross merchandize value (GMV) growth during the Singles’ Day festival may point to sluggish Q4 outlook. Alibaba's GMV growth during the Singles' Day festival was flat. JD.COM has not yet announced its numbers except saying GMV had positive growth Y/Y during the period (from Oct 31 evening to Nov 11 end of day). According to estimates, eCommerce platform GMV grew about 14% Y/Y but the large traditional eCommerce platforms were estimated to see GMV growth at just around 3% Y/Y.   Key company earnings releases   Monday: Meituan, Sonova, Tyson Foods, Nu Holdings, Trip.com, DiDi Global Tuesday: Infineon Technologies, Vodafone, Alcon, Walmart, Home Depot, Sea Ltd, Commonwealth Bank Wednesday: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com   Key economic releases & central bank meetings this week Monday, Nov 14 US:  New York Fed Survey of Consumer Expectations (Oct) Eurozone: Industrial Production (Oct) Tuesday, Nov 15 US: PPI (Oct) US: Empire State Manufacturing Survey (Nov) Eurozone: GDP (Q3) Germany: ZEW survey (Nov) UK: Employment (Oct) Japan: GDP (Q3) China: Retail Sales (Oct) China: Industrial Production (Oct) Wednesday, Nov 16 US: Retail Sales (Oct) US: Industrial Production (Oct) UK: CPI, RPI & PPI (Oct) Thursday, Nov 17 US: Jobless claims (weekly) US: Housing Starts (Oct) Eurozone: HICP (Oct, final) Friday, Nov 18 US: Existing Home Sales (Oct) UK: Retail Sales (Oct) Japan: CPI (Oct) Source: https://www.home.saxo/content/articles/macro/saxo-spotlight-14-nov-2022-14112022

USDJPY struggles to capitalize on its modest recovery gains and remains below the 140.00 mark. Rebounding US bond yields revive the USD demand, though fail to provide any meaningful lift. Bets for smaller Fed rate hikes continue to act as a headwind for the buck and capping the major. The USDJPY pair attracts some buying near the 138.80 region on the first day of a new week and reverses a part of Friday's slide to its lowest level since late August. Spot prices, however, lack bullish conviction and remain below the 140.00 psychological mark through the early European session. The US Dollar stages a modest recovery from a nearly three-month low touched on Friday in reaction to hawkish remarks by Fed Governor Christopher Waller and acts as a tailwind for the USDJPY pair. in a conversation in Sydney, Australia, Waller noted that markets have overreacted to the softer-than-expected October consumer price inflation data last week. Waller added that the Fed was not softening its fight against inflation and that it will take a string of soft CPI reports for the US central bank to take its foot off the brakes. This, in turn, pushes the US Treasury bond yields higher. The resultant widening of the US-Japan rate differential undermines the Japanese Yen and offers additional support to the USDJPY pair. Bulls, however, seem to struggle to capitalize on the attempted recovery amid rising bets for smaller rate hikes by the Fed. In fact, the markets are pricing in a greater chance of a 50 bps liftoff at the next FOMC policy meeting in December. This, in turn, holds back the USD bulls from placing aggressive bets and capping the upside for the USDJPY pair, at least for now. Apart from this, a softer risk tone offers some support to the safe-haven JPY and is seen as another factor acting as a headwind for spot prices. This makes it prudent to wait for strong follow-through buying before confirming that the USDJPY pair has formed a near-term bottom in the absence of any relevant market-moving economic releases from the US.  

After a huge rally last week, the Japanese yen has reversed directions today. USD/JPY is trading at 140.21, up 0.99%. On the economic calendar, Japan releases GDP for the third quarter. There are no economic events in the US today. A week to remember The US dollar dropped like a stone last week, courtesy of a soft inflation report that saw both the headline and core readings fall in October. Both readings were lower than expected, and investors pounced on the news, as stock markets soared and the US dollar took a tumble. The yen made the most of the dollar’s misery, as USD/JPY slumped by a massive 5.3% last week and dropped to a 10-week low. The market reaction to the inflation data looks a bit extreme, and this explains the dollar’s comeback today. The soft inflation report has raised expectations that the Fed will put the brakes on its tightening, after pushing full speed ahead with four straight jumbo hikes of 0.75%. Fed policy makers aren’t bandying around the magical word “peak” to describe inflation just yet, but we are now seeing a change in terminology, such as “gradual” and “measured”. What is interesting is that the markets have gone giddy over a drop in inflation but appear to be ignoring the Fed’s warning that rates could end up higher for longer than expected. I don’t detect any signs of the Fed going dovish, but the markets are expecting a pivot, as there is already talk in the markets of the Fed cutting rates in H2 of 2023. The dollar is dusting itself off after last week’s disaster, and the yen may have trouble holding onto last week’s impressive gains. The Fed will almost certainly raise rates in December by at least 0.50%, and with the Bank of Japan maintaining a cap on JGB yields, the US/Japan rate differential will continue to widen. That spells trouble for the yen, which has lost about 20% against the dollar this year.   USD/JPY Technical USD/JPY is testing resistance at 139.91 and 141.61 There is support at 137.34 and 135.90 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Yesterday and this morning, USD/JPY continues to bounce off the embedded price channel line support at 138.50. Since the growth is not strong, the Marlin Oscillator is in the downward trend, the price is deep below the indicator lines, then we are seeing a correction. Growth prospect at 141.74 is the nearest embedded line of the price channel. But if external markets put pressure on the price, the correction may end earlier. Weak data on Japan came out this morning. The decline in GDP for the 3rd quarter exceeded forecasts: -0.3% (forecast assumed growth by 0.3% q/q), and on an annualized basis, GDP amounted to -1.2% vs. 1.1% expected y/y . In China, the data also came out weak: retail sales fell from 2.5% y/y to -0.5% y/y, industrial production slowed from 6.3% y/y to 5.0% y/y. The Chinese stock index China A50 is falling by 0.14%, the Japanese Nikkei 225 manages to show growth by 0.08%, while yesterday the US S&P 500 fell by 0.89%. Japanese speculators are still a little confused, we are waiting for developments. Our main scenario is a decline. The price is settling at the support of 139.84 on the four-hour chart. The signal line of the Marlin Oscillator is approaching the zero line, from which it can turn down with a high degree of probability and pull the price along with it. After the end of the correction, with the price settling under the level of 139.84, we are waiting for a movement to 138.50.     Relevance up to 03:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327099

The Japanese yen hit its highest level since August 29th, as the currency powers higher. In the North American session, USD/JPY is trading at 139.17, down 0.53%. The US dollar can’t find its footing, and even a soft GDP reading out of Japan hasn’t put a dent in the current yen rally. The economy declined in the third quarter for the first time in a year. GDP fell by 1.2% YoY, much weaker than the consensus of a 1.1% gain and the 4.6% gain in Q2. The usual suspects were the drivers of the decline in GDP – weak global growth and rising inflation. In addition, the weak yen, which recently fell to 32-year lows, has contributed to higher prices. The yen has reversed its fortunes since the unexpectedly soft US inflation report and has soared 6.4% in November. Fed sends a hawkish message The investor exuberance which sent the stock markets flying last week appears to have subsided. Investors jumped on the soft inflation report, as risk sentiment soared and the US dollar retreated. Fed members have responded by sending a hawkish message to the markets, as any dovish signals could complicate its battle to bring down inflation. Fed Vice Chair Brainard said on Monday that she was in favor of slowing the pace of rate hikes, but that further hikes were still required in order to bring down inflation. Brainard’s stance was echoed by Fed member Waller who said that while the Fed may ease up on the size of future rate hikes, it should not be seen as a “softening” in its fight against inflation. Waller added that the 7.7% inflation reading in October was “enormous”, in sharp contrast to the markets, which chose to focus on the fact that inflation fell sharply from 8.2% in September. The Fed is committed to curbing inflation and is far from convinced that inflation has peaked, even though inflation appears to be trending in a downward direction. USD/JPY Technical USD/JPY is testing support at 1.39.66. Below, there is support at 138.69 There is resistance at 140.88 and 141.61 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen rises despite GDP decline - MarketPulseMarketPulse

Extra decline in USDJPY cannot be ruled out for the time being, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group. Key Quotes 24-hour view: “USD traded in a volatile manner as it swung wildly between 137.37 and 140.62 before settling at 139.29 (-0.42%). The choppy price actions have resulted in a mixed outlook and USD could continue to trade in a volatile manner, expected to be between 138.35 and 140.35.” Next 1-3 weeks: “Our latest narrative was from Monday (14 Nov, spot at 139.05) where we expected further USD weakness albeit at a slower pace. We indicated that the 138.00 level is expected to offer solid support. However, USD dropped briefly below 138.00 yesterday (low of 137.67) before rebounding strongly. Further weakness is not ruled out, but the solid support at 137.60 may not come into view so soon, if at all. On the upside a break of 140.80 (‘strong resistance’ level was at 141.00 yesterday) would indicate that USD is unlikely to weaken further.”  

FX markets are maintaining very high levels of realised volatility. Driving markets in the very short term is the stand-off between geopolitical risk in Europe and the powerful short squeeze in risk assets on the back of softer US price data. On the calendar today are US retail sales, industrial production, and a host of Fed and ECB speakers In this article USD: Buy-side wants and needs a weaker dollar EUR: Ongoing correction GBP: BoE speakers in focus JPY: Wild ride continues Source: Shutterstock USD: Buy-side wants and needs a weaker dollar Realised levels of FX volatility remain near the highs of the year. For example, one-month EUR/USD realised volatility, at 14%, is back to levels not seen since April 2020. The dominant near-term theme is the aggressive position adjustment in FX, perhaps more so than in other asset classes, on the back of softer US price data. The dollar took another sharp leg lower on yesterday's release of soft October PPI data. Clearly, US price data is the hottest commodity in the macro space right now. Dollar price action does suggest the market is caught long dollars at higher levels and that corrective rallies in the dollar are tending to be relatively shallow. There is also a lot of buy-side interest in expectations (and hopes) that the dollar has peaked. If so, that will release some handsome gains for emerging market local currency bond and equity markets. For example, were it not for the recent dollar correction, returns in the EM local currency bond index would be a lot lower than the current -10% year-to-date figures, and EM hard currency bond indices are down closer to 20% year-to-date.  Given the weight of long dollar positioning after a major 18-month bull trend, it looks too early to expect that this position adjustment has run its course. Yet developments in Poland late yesterday have somewhat clouded the picture. The market will await any announcement from NATO representatives today on the source of the explosion - although President Biden has partially defused the situation by suggesting the missile was not fired from Russia.  Beyond geopolitics today, the focus will be on US retail sales and industrial production data. Both should be reasonably strong, but less market-moving than price data. We will also hear from the Federal Reserve's John Williams and Mary Daly around 16CET. For the DXY today, we did note that the dollar seemed to find a little natural buying interest after the PPI data, but before the Polish news broke. That might tend to favour a 106.00-107.20 DXY trading range today. In terms of the bigger picture, the question is whether 105 is a large enough correction for DXY.   Chris Turner EUR: Ongoing correction EUR/USD turned from a high of 1.0480 yesterday - driven there by the softer US PPI data. By comparison, today's US data is second tier and might prove a weak dollar positive if retail sales and industrial production emerge on the strong side. Attention may also return to the energy markets given events in Poland. And this will also serve as a reminder of the upcoming embargo on Russian oil exports due to start in early December. This potentially is a downside risk to European currencies should energy prices take a leg higher. On the calendar today are plenty of European Central Bank speakers. The ECB will also release its semi-annual financial stability report. Expect plenty of focus on the regulation of the non-bank financial sector after the recent debacle amongst the UK pension fund industry with its LDI hedges in the UK Gilt markets. Remarks earlier this week from the ECB relating to this report drew a conclusion that financial risks had increased. We noted yesterday that EUR/USD seemed to turn naturally from 1.0480, suggesting the corrective rally might have run its course - at least for the very short term. But the bottom of the short-term range has now been defined at 1.0270 - pointing to a 1.0270-1.0500 range over coming sessions. This assumes no major escalation in geopolitics. Bigger picture, we are in the camp that something like 1.05/1.06 may be the best EUR/USD levels between now and year-end. Chris Turner GBP: BoE speakers in focus Bank of England speakers will be in focus today after the release of the October CPI data. This is expected to be peaking around the 11%year-on-year level around now.  BoE Governor Andrew Bailey and colleagues testify to the Treasury Select Committee at 1515CET today. We suspect the message will be very much the same as that given at the policy meeting earlier this month - i.e. do not expect 75bp hikes to become common and that the market pricing of the tightening cycle is too aggressive.  GBP/USD briefly peaked over 1.20 yesterday. We think 1.20 is a good level to hedge GBP receivables. Equally, we have a slight preference for EUR/GBP staying over 0.8700. Tomorrow is the big event risk of the autumn budget - which on paper should be sterling negative. Chris Turner  JPY: Wild ride continues USD/JPY continues to deliver 20% annualised readings in volatility (as do the high beta commodity currencies and those in Scandinavia). We suspect the next five big figures in USD/JPY come to the upside. We see this because the US 10-year Treasury yield typically only trades 50-75bp below the Fed funds rate towards the end of the tightening cycle. And given that our team is looking for the policy rate to still be taken 100bp higher, we think US 10-year Treasury yields will probably return to the 4.25/4.35% area before the end of the year. Equally and once position adjustment has run its course, the yen rather than the dollar should become the preferred funding currency should market conditions begin to settle. Although that does seem an unlikely prospect right now. Chris Turner Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The dollar is tumbling from multi-decade highs. Calling the FX market in 2023 requires taking a view on the Federal Reserve, the war in Ukraine, China, and the overall investment environment. We suspect that the dollar can stay stronger for a little longer. But the main message in our 2023 FX Outlook is to expect fewer FX trends and more volatility Source: Shutterstock The dollar's highwire act Having risen around 25% since the summer of 2021, the dollar has recently taken quite the tumble. For 2023, the question is whether this is the start of a new bear trend or whether the factors that drove the dollar to those highs still have a say.  Given that the most liquid FX pair, EUR/USD, was such a large driver of global FX trends in 2022, we use a scenario approach to look at a range of 2023 EUR/USD outcomes – derived from the expected volatility priced into the FX options market. The range of scenarios and end-year FX levels extend from ‘Permacrisis’, where EUR/USD could be trading at 0.80, to ‘Safe and Sound’, where EUR/USD could be closer to 1.20. Key inputs to that scenario approach are factors like: i) how aggressive the Fed will be, ii) Ukraine, Europe, and energy, iii) China, and iv) the overall risk environment. Given ING’s house view of the Fed taking rates to 5.00% in early 2023, four quarters of recession in Germany amid higher energy prices, relatively weak Chinese growth, and a still difficult equity environment, our baseline view favours softer EUR/USD levels. 2023 will see fewer FX trends and more volatility But perhaps the strongest message to get across in our outlook is that FX markets in 2023 will see fewer trends and more volatility. We say this because conditions do not look to be in place for a clean dollar trend – no ‘risk-on’ dollar decline nor ‘risk-off’ dollar rally. And central banks tightening liquidity conditions through higher policy rates and shrinking balance sheets will only exacerbate the liquidity problems already present in financial markets. Volatility will stay high. Softening global activity and trade volume growth at less than 2% will likely limit the gains of pro-cyclical currencies in 2023. EUR/USD could be ending the year near 1.00. If the positive correlation between bonds and equity markets does break down next year, it will likely come through a bond market rally. Our forecast for US 10-year Treasury yields at 2.75% year-end will argue for USD/JPY to be trading at 130 or lower. EUR/USD will set the tone for European currencies in general. We favour the Swiss franc to outperform and sterling to underperform. Scandinavian currencies may continue to struggle with the high volatility environment. Further east, we see scope for the Hungarian forint to be re-assessed positively, while the overvalued Czech koruna and Romania leu look more vulnerable as FX intervention slows. In the commodity bloc, the uncertain outcome for China continues to place a question mark on the Australian and New Zealand dollars. We again prefer the Canadian dollar – although how the housing market correction plays out will be a risk. USD/CNY itself may struggle to sustain a move sub-7.00. And in a more mixed FX environment, expect local stories to win out – one of which may be Korean debt being included in world government bond benchmarks – helping the won. EUR/USD: Four scenarios for 2023 Source: ING, Refinitiv Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

On Wednesday, the USD/JPY pair stayed in the range of the embedded price channel lines of 138.55-139.84, making an attempt to break above the resistance. This morning prices are trying to overcome 139.84 for the second time. Settling above the level opens the 141.76 target. Settling above 141.76 casts doubt on the price's ability to return to current levels. Settling under 138.55 will open the nearest target at 137.00. Let's look at the priorities on a smaller chart. The Marlin Oscillator has gone into the positive area on the four-hour chart - into the growth area, which gives an advantage to the rising scenario. The price will most likely reach the target level of 141.76, which the MACD line has already reached from above and strengthened. From the level, we are waiting for a price reversal to the downside. If the price settling in the 138.55-139.84 range is delayed, the Marlin Oscillator will return to the negative area, and then a decline may develop without an exit above 139.84 (or slightly higher, following yesterday's example).     Relevance up to 04:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327343

The USD/JPY pair continues to move sideways in the short term. The price action signaled exhausted sellers so that the buyers could take the lead. Still, the currency pair could develop a new leg higher only if the Dollar Index develops a new leg higher. The pair was trading at 139.51 at the time of writing, which seems undecided. Fundamentally, the Japanese data came in worse than expected while the US reported mixed data. Today, the Japanese Trade Balance came in at -2.30T far below the -1.93T expected. Later, the US data could be decisive. Philly Fed Manufacturing Index could be reported at -6.0 points versus -8.7 points in the previous reporting period, Unemployment Claims could jump from 225K to 228K in the previous week, Building Permits may drop from 1.56M to 1.51M, while Housing Starts could be reported at 1.41M below 1.44M in the previous reporting period. Better-than-expected US data could lift the greenback, while worse-than-expected figures could weaken the USD. USD/JPY Range Pattern! As you can see on the H1 chart, the pair is still trapped between 138.45 and 140.79 levels. Escaping from this range could bring us new trading opportunities. The price failed to reach 140.79 resistance, so it could come back down to test and retest the 138.45 and the channel's downside line before developing a new bullish momentum. USD/JPY Forecast! False breakdowns through the immediate downside obstacles may announce a bullish momentum. This could represent a first buying opportunity. Also, a new higher high, a valid breakout through 140.79 could bring new longs. Relevance up to 07:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/301353

“Financial market stability is the most important factor to consider when it comes to exit,” mentioned Bank of Japan’s (BOJ) executive director Shinichi Uchida early Thursday. The Senior BOJ Official also mentioned that a rate hike before balance sheet adjustment possible in an exit. Earlier in the day, BOJ Governor Haruhiko Kuroda also defended the Japanese central bank’s easy-money policy while stating, “(It is) Important to continue monetary easing to support economy.” Additionally, Deputy Governor Hiroshi Nakaso mentioned that the central banks must remove emergency support measures once financial crises are over to avoid causing moral hazard in the market. “Investors have come to assume that central banks will always come to the rescue when financial markets destabilise because of the massive monetary support deployed during the COVID-19 crisis,” stated BOJ’s Nakaso in a seminar hosted by the University of Tokyo and International Monetary Fund. USDJPY prints two-day uptrend Given the dovish comments from the BOJ officials, as well as the firmer US Treasury yields, USDJPY picks up bids to print mild gains around 139.60. Also read: USDJPY Price Analysis: Bears eye a breakout of the daily coil Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

The Japanese yen continues to flirt with the 140 level. In the European session, USD/JPY is trading at 140.25, up 0.51%. Japan releases the October National CPI later today, which is expected to rise to 3.5%, following the September reading of 3.0%. Inflation has been on the rise and is above the BoJ’s target of 2%, although these are levels that other major central banks can only dream about. The Bank of Japan has no plans to change its ultra-loose policy, even though inflation is above the target and the yen remains weak. BoJ Governor Kuroda reiterated his well-worn script earlier today that the rise in inflation is transitory, adding that he expects CPI to drop below 2% in fiscal year 2023. The yen has been on a tear in November, with gains of close to 6%, but that is more a case of dollar weakness rather than any newfound yen strength. With the Fed planning another oversize rate hike in December, the US/Japan rate differential will continue to weigh on the yen. Read next: Many sued in FTX scandal, Elon Musk to reduce his time at Twitter, EU stocks edged higher on Thursday| FXMAG.COM Fed sends a hawkish message The investor exhilaration which sent the stock markets rallying after the soft inflation report has taken a pause. Fed policy makers responded with a hawkish message, reminding the markets that the Fed was planning to raise rates higher than they had anticipated. The Fed speak may or may not have convinced investors to settle down, but a strong US retail sales report clearly did the trick. The headline and core releases both posted strong gains of 1.3%, dampening sentiment that the Fed would pivot and ease its tightening. The US economy remains resilient and appears able to absorb further rate hikes without triggering a deep recession. Interest rates are expected to peak at 5% or slightly higher, which means that the Fed is highly likely to continue tightening into next year. USD/JPY Technical USD/JPY has support at 140.30 and 139.66 There is resistance at 141.08 and 141.86 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen dips ahead of key inflation data - MarketPulseMarketPulse

The dollar-yen pair earlier this week updated a three-month price low, reaching 137.70. However, the USD/JPY bears failed to settle in the area of the 137th figure - dollar bulls stopped the downward momentum and turned the pair 180 degrees. In general, the trajectory of the pair's movement correlates with the trajectory of the US dollar index. Once again, we are convinced that the yen is not an independent player against the greenback. The Japanese currency certainly has its trump card, but it rather serves as a "stop tap". We are talking about a currency intervention, the risk of which increases along with the USD/JPY rate. In this context, we can say that the Japanese government controls the upper limit of the price range within which the pair is traded. According to most analysts, this limit is in the area of the 150.00 mark: exceeding this target is fraught with consequences. As for the lower limit of the conditional price range, everything depends on the "well-being" of the US currency. USD/JPY bears are forced to follow the greenback, which determines the end point of any downward surge. The yen has no arguments of its own to strengthen – primarily due to the divergence of the Federal Reserve and the Bank of Japan rates. The events of the last days serve as evidence of this. They eloquently illustrated the stated disposition, the essence of which boils down to an uncomplicated conclusion: the downtrend ends exactly where the dollar recovery begins. As you know, the US currency significantly sank throughout the market after the release of the latest data on the growth of inflation in the United States. The market started talking about the fact that the Fed will slow down the pace of monetary policy tightening at the next meeting, which will be held in December. A little later, these assumptions were confirmed by many representatives of the Fed: according to them, the central bank can afford to reduce the speed, while maintaining the final goal at the same level (that is, above the 5.0% mark). At first, traders mostly focused their attention directly on the fact of slowing down the pace of tightening of the monetary policy. But then they "listened" to the signals from the Fed representatives, who made it clear that no one was going to curtail the hawkish course – only the speed of achieving the goal slows down. In particular, Christopher Waller, a member of the Board of Governors, said that the markets should now pay attention to the "end point" of the rate hike, and not to the pace of its achievement. At the same time, he noted that the end point is probably "still very far away." Some of his colleagues also stated that, firstly, inflation in the United States is still at too high a level; secondly, it is impossible to make any long-term organizational conclusions based on only one report. Such messages eased the pressure on the dollar, and, accordingly, cooled the ardor of bears of the USD/JPY pair. Turning to the upside, the pair gradually began to gain momentum, rising by 250 points in two days. At the same time, traders ignore Japanese statistics, even when it comes to the inflation report. Key data on the growth of inflation in Japan was published during the Asian session on Friday. The report reflected a record growth of key indicators. For example, the overall consumer price index rose by 3.7% in October, which is the strongest growth rate of the indicator since 1982. The core CPI, which does not include fresh food, but includes energy prices (petroleum products), also updated the 40-year record. The consumer price index, excluding food and energy prices, jumped 2.5% year-on-year in October. All components of the above report came out in the green zone, significantly exceeding the forecast levels. It is worth noting that inflation has been exceeding the BOJ's 2% target for seven months, but at the same time BOJ Governor Haruhiko Kuroda continues to "hold the line", maintaining a soft monetary policy. This, in fact, explains such a phlegmatic reaction of USD/JPY traders to the report published today. Market participants reasonably doubt that Kuroda will toughen his rhetoric in response to the published figures. Thus, the fate of the USD/JPY downward trend depends solely on the behavior of the US currency, which is gradually beginning to "come to its senses". After all, even taking into account the slowdown in the rate hike, the Fed continues to act as an ally of the greenback, and even more so in tandem with another, which cannot count on the support of the BOJ. In my opinion, the rhetoric of the Fed representatives will only tighten ahead of the December meeting (at least in the context of determining the upper limit of the current cycle), while Kuroda will once again ignore the inflation report, declaring the preservation of the accommodative policy. All this suggests that the USD/JPY pair may demonstrate a more confident growth in the near future – at least to the Tenkan-sen line on the daily chart, which corresponds to the 142.40 mark. If we talk about the medium term, the main target here is 145.50: at this price point, the upper line of the Bollinger Bands indicator coincides with the upper limit of the Kumo cloud on the D1 timeframe. Relevance up to 02:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327451

After a prolonged decline in the pair, caused by the large-scale interventions by the Bank of Japan, as well as weakening of dollar amid falling inflation, USD/JPY moved into a phase of horizontal consolidation, with a clear upper limit at 140.8. In this situation, sellers have no choice but to set their stop orders beyond the level. So, considering that there is a three-wave pattern (ABC), where wave A represents yesterday's bullish pressure, traders can enter the market by buying up to the 50% retracement level. Stop loss could be placed at 138.5, then exit the market by taking profit on the breakdown of 140.8. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks! Relevance up to 08:00 2022-11-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327489

Inflation in Japan soared to the highest levels in more than 30 years, to 3.7% in October, up from 3% printed a month earlier. High inflation print sure revived the Bank of Japan (BoJ) hawks, and the calls for a policy rate hike, and kept the dollar-yen below the 140 level, but it’s unsure whether the BoJ will give up on its ultra-soft policy stance. Therefore, if the US dollar picks up momentum, which will certainly be the case, the USDJPY could easily rebound back above its 50-DMA, which stands near 145. US And the reason I think the US dollar will recover is because most Fed members remain relatively hawkish regarding the Fed’s policy tightening. Plus, option traders are building topside structure over the one-month tenor that covers the next US inflation report and the Fed’s next policy meeting in December. Stock market So, the ambiance in the stock markets is not as cheery as it was at the end of last week. UK In the UK, the autumn budget statement went happily eventless. Gilts rallied, pound saw limited sell-off, while energy companies’ reaction to windfall taxes remained muted. Watch the full episode to find out more! 0:00 Intro 0:30 Japan inflation soars, Mr. Kuroda! 1:34 Should you prepare for another USD rally? 3:32 Market mood turns… meh. 4:01 The retail roundup 6:11 The happily eventless UK budget Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.   #hawkish #Fed #USD #recovery #US #retail #sales #Walmart #Target #Macys #HomeDepot #Lowes #Alibaba #earnings #UK #Budget #GBP #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH

The Japanese yen has edged higher on Friday and is trading at 139.90 in the European session. Japan’s Core CPI beats forecast Inflation continues to creep up in Japan. Core CPI accelerated to 3.6% in October, up from 3.0% in September and edging above the consensus of 3.5%. These levels pale in comparison to what we’re seeing in the US, the UK and elsewhere, but Japan hasn’t seen these levels of inflation in 40 years. The country has a deflationary mindset, which leads firms to absorb higher costs for fear of losing customers. However, as inflation continues to move higher, that trend is changing and consumers are feeling the pain of higher prices. Read next: High Inflation Print In Japan | Most Fed Members Remain Relatively Hawkish| FXMAG.COM Despite rising inflation and a weak yen, the Bank of Japan is resolute in maintaining its ultra-loose policy in order to support the weak economy. The BoJ has been an outlier as it has capped interest rates while the global trend has been to raise rates, arguing that cost-push inflation is only temporary. BoJ Governor Kuroda has said that inflation should peak after hitting 3%. Kuroda might want to consult with Jerome Powell or Christine Lagarde about making assumptions about inflation peaks, as they found out to their chagrin that inflation was much stickier than they had anticipated. Fed continues tightening talk Ever since the last US inflation report sent the equity markets soaring and the US dollar sliding, the Fed has circled the wagons and telegraphed a hawkish message to the markets. The latest salvo came from Fed member Bullard, who urged the Fed to raise rates to 5%-5.25% at a minimum. Bullard also presented a hawkish scenario in which the funds rate would climb all the way to 7%, a message investors clearly didn’t want to hear. Retail sales and unemployment claims were better than expected, another indication that the US economy remains resilient handle further rate hikes. The Fed’s coordinated message and the solid data have quelled the stock market rally and boosted the US dollar. USD/JPY Technical USD/JPY is testing support at 139.95. Below, there is support at 138.09 There is resistance at 141.01 and 142.87 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY calm as inflation rises higher - MarketPulseMarketPulse

Changes keep happening. Payments keep evolving. Inflation is also increasing, even in Japan. Layoffs at larger companies like Amazon are also on the rise. In this article: The 100 People list Transforming Business Business owners' Amazon Cross-border payments Japanese economy Goldman Sachs Chief Information Officer is in Top100 Goldman Sachs tweets about the 100 People list Transforming Business by Insider. .@BusinessInsider's 2022 list of Top 100 People Transforming Business recognizes our Chief Information Officer, Marco Argenti, among other game-changing leaders! Read more about how Marco is breaking new ground on Wall Street through technology: https://t.co/qDGLAooKCq — Goldman Sachs (@GoldmanSachs) November 17, 2022 Every year, Insider surfaces 100 leaders across 10 industries who are driving unprecedented change and innovation. The T100 does more than highlight career milestones. Goldman Sachs Chief Information Officer, Marco Argenti is on this list. Recognition of one of the directors in the field of finance is important for personal positioning and thus also for the company. Business owners' optimism UBS tweets about business owners' optimism. Despite recession fears, business owners continue to fill post-COVID labor gaps and are still optimistic about their businesses for the next year. #UBSInvestorSentiment #shareUBS — UBS (@UBS) November 17, 2022 There is no doubt that from 2020, companies, markets and entire economies are struggling. The pandemic has had a negative impact on employment, and the current inflation is also not encouraging. Despite the fear and all the difficulties, companies are getting ahead of it and are still hiring new employees. According to UBS bananas, business owners are very optimistic about the future. This is of particular importance for the labor market, as it affects not only the situation of households but also entire economies. Layoff in Amazon CNBC Now quotes the statement of Amazon CEO Andy Jassy. BREAKING: Amazon CEO Andy Jassy says layoffs will continue into next yearhttps://t.co/QEL5Diikjs — CNBC Now (@CNBCnow) November 17, 2022 The employment situation at Amazon is unstable. The company began informing workers this week that they were being let go. CEO Andy Jassy said this will continue next year. The cuts are being made as Amazon reckons with a worsening economy. Amazon isn't the only one struggling. Other giants also decided to reduce staffing. Cross-border payments IMF tweets about possible developments in cross-border payments. Cross-border payments are on track to be transformed by digital money. Learn how in F&D. https://t.co/uXmnOnQd8g pic.twitter.com/PwRn2wW1ki — IMF (@IMFNews) November 18, 2022 The development in this sector is very fast, but cross-border payments are still the Achilles' heel. We have all felt the frustration of sending money abroad. It takes time. It’s expensive. It turns out that there may be development in this payment sector. For people who love to travel or those who live in several countries, such a possibility may be very desirable. Japan CPI Reuters Business discusses the situation in Japan in its post. Japan's core consumer inflation accelerated to a 40-year high in October, driven by currency weakness and imported cost pressures that the central bank shrugs off as it sticks to a policy of ultra-low interest rates. Read more: https://t.co/AoJ6rkjSBw pic.twitter.com/DGaEal1df9 — Reuters Business (@ReutersBiz) November 18, 2022 Many economies around the world have been struggling with high inflation since the beginning of this year. Japanese inflation has been low for a long time. In October, it rose for the first time, reaching its highest level in 40 years. The activities of the Bank of Japan were dovish, which largely translates into the yen (JPY) exchange rate and the economic situation of the country. The Bank of Japan has made several interventions in the foreign exchange market, but economists do not expect the BOJ to join a global trend of raising interest rates. The more the question arises, will there be another intervention?

Equity markets are back in the green on Friday after a choppy week in which the recovery rally has stalled. Efforts by Fed policymakers to manage market expectations have cooled the sense of immense relief that has delivered a strong rebound over the last month. The S&P was up more than 15% at one point while the Dow jumped more than 18%. Not bad on the back of what was ultimately one good inflation month. Read next:  James Bullard unleashed a flurry of hawkish views on Thursday which didn’t get a warm reception in the markets initially. But then they did rebound and are higher again today so it seems investors are still taking them with a pinch of salt. The Fed is clearly concerned that “dovish pivot” speculation could be undermining its tightening efforts which could explain why it’s being so steadfast in its hawkish message. There will also be a concern that the labour market and household spending are showing little sign of weakening despite interest rates rising at an extraordinary rate over the past year. I don’t think that will stop the central bank from slowing the pace next month, especially if we see another drop in inflation just before, but it could cause the Fed to persevere for longer which is a concern for investors. UK retail sales blip no reflection of what lies ahead No one in the UK will be fooled by the latest retail sales report into thinking all is not as bad as it seems, not after yesterday’s Autumn Statement. The OBR expects living standards to decline by 7.1% over the next two years, the sharpest drop in six decades, as the country battles a cost-of-living crisis, severe fiscal consolidation, higher interest rates, and a recession. Against that backdrop, it’s hard to get remotely excited by an expectation-beating 0.6% jump in sales in October. Needless to say, it is not the start of a promising trend. BoJ still unlikely to change course Japanese inflation data may on the face of it give the impression that the Bank of Japan has achieved its inflation goals and can afford to soften its grip on the bond market but the reality is quite different. What is believed to be unsustainable factors like a weak yen, and high imported energy and food prices, are behind the increases, which the BoJ has been very willing to look through and will likely continue to do so. Especially with the pressure of yen devaluation far less intense after the US dollar’s correction over the last month. Crypto volatility subsides for now Bitcoin volatility is subsiding which will no doubt come as a relief to the crypto industry as the fallout from the FTX collapse continues. We’re continuing to learn who exactly is exposed to the collapse, to what extent, and what the ripple effects will be. One obvious impact is that of confidence in the space which could take time to repair in already challenging markets. I’m not sure anyone can be confident that the worst of the rout is behind us which means bitcoin is vulnerable to another plunge, with $15,500 being the first test of support and then potentially $14,000 below that. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Uncertain times - MarketPulseMarketPulse

After an 18-month bull trend in the dollar, the FX outlook has become less clear. Further position adjustment could prompt a little more short-term dollar weakness, but we do not believe the conditions are in place for a major dollar bear trend just yet. Instead, we expect FX markets in 2023 to be characterised by less trend and more volatility. Source: Shutterstock G10: Less trend, more volatility The final quarter of 2022 has seen a breakdown in the otherwise orderly dollar bull trend – a trend which had been worth 5% per quarter over the first nine months of the year. That dollar rally had largely been driven by a Federal Reserve wanting to take policy into restrictive territory – a trend only exacerbated by the war in Ukraine. For all the current discussions about peak dollar and peak macro pessimism, we think it is still worth examining whether the conditions will be in place to deliver an orderly dollar bear trend in 2023. We think not and here are three reasons why: Driving the dollar bull trend since summer 2021 has been a Fed at first abandoning Average Inflation Targeting and then trying to get ahead of the inflation surge. A call on a benign dollar decline in 2023 requires the Fed to be taking a back seat. That seems unlikely. The stark message from both the Fed’s Jackson Hole symposium and the IMF autumn meetings was that central banks should avoid relaxing too early in their inflation battle – a move which would deliver the pain of recession without any of the sustained gains on inflation. We suspect it will be too early for the Fed to sound relaxed at its 14 December meeting and March 2023 may be the first opportunity for a decisive turn in Fed rhetoric. While a softer Fed profile may be a necessary condition for a turn in the dollar, a sufficient condition requires a global economic environment attractive enough to draw funds out of the dollar. 2023 global growth forecasts are still being cut – dragged lower especially by recession in Europe. ING forecasts merchandise world trade growth below 2% in 2023 – not a particularly attractive story for the trade-sensitive currencies in Europe and emerging markets. A liquidity premium will be required of non-dollar currencies. 2023 will be a year when central banks are initially still hiking into a recession and shrinking balance sheets. The Fed will reduce its balance sheet by a further $1.1tn in 2023 and the European Central Bank will be looking at quantitative tightening, too. Lower excess reserves will tighten liquidity conditions still further and raise FX volatility levels. Again, the bar not to invest in dollar deposits remains high – especially when those dollar deposits start to pay 5% and the dollar retains its crown as the most liquid currency on the planet. What do these trends mean for G10 FX markets? This probably means that the dollar can bounce around near the highs rather than embark on a clean bear trend in 2023. If the dollar is to turn substantially lower, we would favour the defensive currencies such as the Japanese yen and Swiss franc outperforming. Here, the positive correlation between bonds and equity markets may well break down via the bond market rallying on the back of a US recession and easier Fed policy. ING forecasts US 10-year Treasury yields ending 2023 at 2.75% - USD/JPY could be trading at 130 under that scenario.  Recession in Europe means that EUR/USD could be trading in a 0.95-1.05 range for most of the year, where fears of another energy crisis in the winter of 2023 and uncertainty in Ukraine will hold the euro back. Sterling should also stay fragile as the new government attempts to restore fiscal credibility with Austerity 2.0. We cannot see sterling being rewarded much more on austerity and suspect that GBP/USD struggles to hold gains over 1.20.  Elsewhere in Europe, some differentiation could emerge between the Scandinavian currencies. The Swedish krona may struggle to enter a sustained uptrend next year given its elevated exposure to the eurozone’s growth story, while the Norwegian krone could benefit from its attractive commodity exposure. However, NOK is an illiquid and more volatile currency, and would therefore face a bigger downside in a risk-off scenario. As shown in the chart below, commodity currencies look undervalued versus the dollar on a fundamental basis. However, a stabilisation in risk sentiment is a necessary condition to close the misvaluation gap. For the Australian and New Zealand dollars, an improvement in China’s medium-term outlook is also essential, so the Canadian dollar may emerge as a more attractive pro-cyclical bet given low exposure to the economic woes of Europe and China. Another factor to consider is the depth of the forthcoming house price contraction. We think central banks will increasingly take this into consideration and will try to avert an uncontrolled fall in the housing sector. However, this is potentially a very sizeable downside risk, especially for the currencies of commodity-exporting countries, which generally display the most overvalued property markets in the G10. To conclude, we think FX trends will become less clear in 2023 and volatility will continue to rise. FX option volatility may seem expensive relative to historical levels, but not at all when compared to the volatility FX pairs are actually delivering. We suspect risk management through FX options may become even more popular in 2023.   Valuation, volatility and liquidity in G10 Source: ING, Refinitiv EUR/USD: Dollar bromance will take some breaking   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/USD 1.035 Bearish 0.98 0.95 0.98 1.00 1.00 Bullish leap of faith is too dangerous: We are bearish on EUR/USD into the end of the first quarter of 2023. Key factors which have driven EUR/USD lower this year will remain largely in place. The softish US October CPI print may give the Fed some pause for thought, but should not be enough to derail it from some further tightening – taking the policy rate close to 5.00% in the first quarter of 2023. Another key factor for EUR/USD this year has been energy. Here, our team sees prices for both natural gas and oil rising from current levels through 2023. A difficult 2023 European winter for energy may well restrain the EUR/USD recovery later in the year, continuing to depress the eurozone’s traditionally large current account surplus.   Necessary but not sufficient: Tighter Fed policy has been at the forefront of this year’s dollar rally and a shift in the Fed tone (more likely in March 2023 than December 2022) will be necessary to see the short end of the US yield curve soften appreciably and the dollar weaken. But the sufficient condition for a EUR/USD turnaround is the state of affairs amongst trading partners. Are they attractive enough to draw funds away from USD cash deposits potentially paying 5%? That is a high bar and why we would favour the EUR/USD 2023 recovery being very modest, rather than the ‘V’ shape some are talking about. ECB will blink first: The case for a central bank pivot is stronger for the ECB than the Fed. The German economy looks set to contract 1.5% next year and at its 15 December meeting, the ECB may well use its 2025 forecast round to show inflation back on target. We see the ECB tightening cycle stalling at 2.25% in February versus the near 3% currently priced by the market for 2023. This all assumes a seamless ECB introduction of quantitative tightening and one that does not upset peripheral bond markets. Add in global merchandise trade barely growing above 1% next year (recall how the 2017-19 trade wars weighed on the euro) plus the risk of tighter liquidity spilling into financial stability – all suggest the market’s bromance with the dollar will continue for a while yet.  USD/JPY: 1Q23 will be a crucial quarter   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/JPY 140.00 Bearish 145.00 145.00 140.00 135.00 130.00 Clash of the titans: The stark divergence in monetary policy between the Fed and the Bank of Japan has been the primary driver of this year’s 15%+ rally in USD/JPY. In 2023, investors may question whether the BoJ is ready to tighten. The default view is that the perma-dovish BoJ Governor, Haruhiko Kuroda, will not be moved. However, the end of Governor Kuroda’s term on 8 April 2023 will no doubt lead to frenzied speculation on his replacement and whether a less dovish candidate emerges. Interest rate markets are starting to price a change – e.g. the BoJ’s 10-year target sovereign yield of 0.25% is priced at 0.50% in six months’ time. March 2023 will be especially volatile: The first quarter of 2023 will also see huge focus on the Japanese wage round, where a rise in wages is a prerequisite for the BoJ to tighten policy. Japanese politicians have been encouraging business leaders to raise wages, while at the same time, the government has been quite aggressive with fiscal stimulus to offset the cost-of-living shock. This period will also see the Fed release its dot plots (22 March), which may be the first real chance for the Fed to acknowledge a turn in the inflation profile. As such, this period (March/April) could see a big reversal lower in USD/JPY. FX Intervention slows the move: Most agree that USD/JPY is higher for good reasons (including the energy crisis) and that Japanese FX intervention can only slow, not reverse the move. The Japanese have already spent around $70bn in FX intervention between the 146 and 151 region in USD/JPY and will likely be called into further action based on our view of a stronger dollar over coming months. FX reserves are not limitless, of course, but Japan’s large stockpile of $1.1tn means that this campaign can continue for several more months. The purpose here is to buy time before the Fed cycle turns. Unless we end up with 6%+ policy rates in the US next year, we would expect USD/JPY to be ending 2023 nearer 130. GBP/USD: Running repairs   Spot Year ahead bias4Q221Q232Q233Q234Q23 GBP/USD 1.19 Mildly Bearish 1.10 1.07 1.11 1.14 1.14 Fiscal rescue plan: After September’s government-inflicted flash crash, GBP/USD is now recovering on the expectation of more credible UK fiscal plans and the softer dollar. As above, we doubt 2023 will prove the year of a benign dollar decline. And the risk is that the Fed keeps rates at elevated levels for longer. Given sterling’s large current account deficit and its transition to high beta on the external environment, we think it is too early to be expecting a sustained recovery here. Instead, we favour a return to the 1.10 area into year-end as the government introduces Austerity 2.0 and the Bank of England cycle is repriced lower. Tighter fiscal/looser monetary mix: At its meeting in early November, the BoE pushed back against the market pricing of the rate cycle – arguing that hikes close to 5% would see the UK economy contract 5%. Our call is that the BoE terminal rate will be closer to the 3.75% area than the 4.50% that the market prices today. As the BoE assesses the degree of tightening needed to curtail inflation, the government is discussing ways to fill around a £60bn hole in the budget. The plan will be revealed on 17 November, probably in a roughly 50:50 split between tax hikes and real terms spending cuts. We look for the UK economy to contract every quarter in 2023 – making it a very difficult environment for sterling. Sterling suffers from liquidity outages: This year’s BIS triennial FX survey saw sterling retain its position as the fourth most traded currency pair. Despite this, sterling does occasionally suffer from flash crashes. We think liquidity will be at a premium in 2023 and that a Fed taking real rates even higher as economies head into recession is a dangerous combination for sterling – where financial services make up a large section of the economy. GBP/USD realised volatility is now back to levels seen during Brexit and our market call for 2023 is that these types of levels will become more, not less, common. EUR/JPY: A turn in the cycle   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/JPY 144.50 Bearish 142.00 138.00 137.00 135.00 130.00 Downside risks into 1Q23: EUR/JPY has defied typical relationships with risk assets by gently rallying all year even as both bond and equity benchmarks sold off 20%. Driving that JPY underperformance has probably been BoJ policy and USD/JPY’s strong relationship with US 10-year yields. Both the eurozone and Japan have been hit by the energy shock, where external surpluses have quickly dwindled. As above, we tend to think there are downside risks to EUR/JPY in the first quarter of 2023 as speculation mounts over BoJ Kuroda's successor as well as the ECB potentially calling time on their tightening cycle at the February meeting. US10yr can drag EUR/JPY to 130 in 2H23: A large part of the JPY underperformance during 2022 has been driven by developments in the US bond market. USD/JPY consistently shows the most positive correlation to US 10-year Treasury yields of any of the G10 FX pairs – and far higher than EUR/USD. Consistent with ING’s view on the Fed cutting rates in the third quarter of 2023, our debt strategy team sees US 10-year yields starting to edge lower in the second quarter of 2023, and then falling 100bp in the second half of 2023. In theory, this should heavily pressure EUR/JPY into the end of the year. Financial stability risks increase: Lower growth and tighter liquidity conditions – at least through the early part of 2023 – increase the prospect of financial stability risks. Recall the Fed will be shrinking its balance sheet by $1.1tn in 2023 even as liquidity and bid-offer spreads continue to create difficult market conditions. The yen lost its shine as a safe-haven currency in 2022, but we suspect relative to the euro, some of that shine can be regained in a softer US rate environment. The EUR/JPY cycle should also turn if the ECB calls time on its tightening cycle at the 2 February meeting. EUR/GBP: Listless in London   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/GBP 0.87 Neutral 0.89 0.89 0.88 0.88 0.88 In the same macro boat: Both the eurozone and UK economies have been hit hard by the war in Ukraine and the surge in energy prices. Both saw sharp terms of trade declines into August and then a sharp reversal as natural gas prices dipped into the warm winter. There is not a substantial amount of difference between our German and UK quarterly growth profiles for 2023 – both contracting every quarter of the year. Perhaps one could argue that the UK is more exposed to higher mortgage rates given the shorter duration of fixed-rate mortgages in the UK. This could all make for a trendless EUR/GBP environment. Energy price guarantees could differentiate: One important determinant for UK growth in 2023 will be how the new government handles the Energy Price Guarantee. Former UK Prime Minister, Liz Truss, offered a two-year programme – subsequently cut back to six months after the UK fiscal crisis. How the UK consumer copes with having to pay market prices for energy will be key to the UK story in 2023 as well as how the EU as a whole copes with similar challenges. Currently, it seems that the ECB is concerned that the fiscal programmes in Europe are too generous and not particularly targeted – adding to the inflation challenge.    Political wild cards: To pick out a few political wild cards, the first is a re-run of the Scottish independence referendum. The Scottish National Party (SNP) has picked 19 October 2023 as the date – although such an exercise would likely have to be approved by the UK parliament. Currently, the SNP is pursuing an action through the Supreme Court to see whether London can indeed still veto the referendum. In Europe, the focus will probably be on the fiscal path taken by the new right-wing Meloni government and also the reform of the Stability and Growth Pact. Budgets submitted in late 2023 could become an issue were the rules to be tightened again.   EUR/CHF: Swiss National Bank to guide it lower   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/CHF 0.98 Bearish 0.95 0.93 0.90 0.90 0.92 Does the SNB want a stronger Swiss franc?: The Swiss National Bank this year said it made a conscious decision to allow nominal Swiss franc appreciation in light of the inflation environment. The three-month policy rate has been raised 125bp to 0.50% and the SNB says it wants to keep the real exchange rate stable. With inflation running at 3% in Switzerland versus 10% in its largest trading partner, the eurozone, the SNB in theory should be happy with something like 5-7% per annum nominal appreciation in the Swiss franc. That certainly was the story into the end of September but does not quite explain the Swiss franc's weakness over the last six weeks. Two-sided intervention: When hiking rates earlier this year the SNB also said it would be engaging in two-sided FX intervention. Ever since the start of the financial crisis in 2008, the SNB has been more familiar as a seller of the Swiss franc – including its 1.20 floor in 2011-2015. Now its strategy is changing and we read that as an objective to potentially manage the Swiss franc stronger in line with its ambitions to tighten monetary conditions. Earlier this year, we estimated that the SNB could possibly drive EUR/CHF to the 0.90 area in summer 2023 based on expected inflation differentials and the need for a stable real exchange rate. The risk environment should favour the franc: Central banks are communicating that they need to tighten rates into recession and remove the excess liquidity poured out during a series of monetary bailouts. Tighter monetary and financial conditions typically spell stormy waters for risk assets. With its still sizable current account surplus (worth 8% of GDP in the second quarter of 2022) the Swiss franc should perform well during this stage of the global economic cycle. Closer to home, the European economic cycle and the ECB discussing quantitative tightening into early 2023 will prove a challenge to peripheral eurozone debt markets and likely reinforce the franc as a eurozone hedge. EUR/NOK: Not for the faint of heart   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/NOK 10.33 Bearish 10.30 10.15 9.95 9.70 9.60 Risk sentiment remains key: The krone is not a currency for the faint of heart. It is the least liquid currency in the G10 space, making it considerably exposed to negative shifts in global risk sentiment and equity market turmoil. It is, at this stage, way too early to call for a turn in equities, and a hawkish Fed into the new year may actually mean more pain for risk assets, at least in the near term. A recovery in global sentiment should offer support to NOK in the second half of next year, but restoring market confidence in a very high-beta currency is no easy feat. Norges Bank policy: The krone’s underperformance in 2022 was exacerbated by Norges Bank effectively sterilising oil and gas profits via a large increase in daily NOK sales. In November, FX daily sales have been scaled back from NOK4.3bn to NOK3.7bn, and we think there could be some interest by NB to further ease the pressure on the currency via smaller FX sales. With recent dovish hints suggesting that the NB hiking cycle may peak at 3.0% (with most of the country on variable mortgage rates, many more rate hikes could be difficult to tolerate), allowing a stronger currency to do some inflation-fighting sounds reasonable.  Energy prices: If indeed markets enjoy a calmer environment in 2023 and NB favours a stronger currency, then NOK is left with considerable room to benefit from a still strong energy market picture for Norway. There is probably an optimal range for oil and – above all – gas prices to trade at elevated levels but not such high levels that would significantly hit risk sentiment. For TTF, this could be somewhere around 150-200 €/MWh. This a plausible forecast for next year, but the margin for error can be very large. We see EUR/NOK at 10.50 in the fourth quarter of 2023, but NOK hiccups along the way are highly likely. EUR/SEK: Eurozone exposure a drag on SEK   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/SEK 10.80 Neutral 10.85 10.70 10.60 10.40 10.50 Riksbank’s policy: The Riksbank delivered more than one hawkish surprise in 2022, including a 100bp rate hike. This appeared to be part of a front-loading operation where lifting the krona was seen as a welcome side effect. In practice, and like in many other instances in the G10, the high volatility environment meant that short-term rate differentials played a negligible role in FX. So, despite a wide EUR-SEK negative rate differential throughout 2022, SEK was unable to draw any real benefit. That differential has now evaporated, but we expect 125bp of tightening (rates at 3.0%) in Sweden versus 75bp in the eurozone, which could suggest some EUR/SEK downside room in a more stable market environment. Also, a slowdown in FX purchases by the RB, now that reserves are back to the 1H19 levels, should remove some of the pressure on SEK. European picture: Sweden is a very open economy with more than half of its exports heading to other EU countries. Our expectations are that 2023 will see a rather pronounced eurozone recession and that the energy crisis will extend into the end of next year. Barring a prolonged period of low energy prices (and essentially an improvement in the geopolitical picture) in Europe, we doubt SEK will be able to enter a sustainable appreciation trend in 2023 as sentiment in the eurozone should remain depressed. Valuation: We are not fans of the euro in 2023, which means that our EUR-crosses forecasts reflect the weaker EUR profile. We see some room for EUR/SEK to move lower throughout the year – also considering that we estimate the pair to be around 9.0% overvalued. However, the high risk of a prolonged energy crisis in the eurozone means that SEK is significantly less attractive than other pro-cyclical currencies next year. Incidentally, SEK is highly correlated to the US tech stock market, which looks particularly vulnerable at the moment. A return to 10.00 or below would likely require a significant improvement in European sentiment. USD/CAD: Loonie is an attractive pro-cyclical bet   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CAD 1.33 Bearish 1.34 1.32 1.30 1.26 1.24 Commodities and external factors: Our commodities team expects Brent to average slightly above $100/bbl next year, and Western Canadian Select around $85/bbl. Along with our expectations for higher gas prices, the overall commodity picture should prove rather supportive for the Canadian dollar in 2023. In our base-case scenario, where global risk sentiment gradually recovers but two major risk-off forces – Ukraine/Europe and China – remain, CAD would be in an advantageous position, since Canada has much more limited direct exposure to China and Europe compared to other commodity-exporting economies.  Domestic economy: If the US proves to be a relative 'safe-haven' in the global recession, therefore withstanding the downturn better than other major economies like the eurozone, this should offer a shield to Canada’s economy, which is heavily reliant on exports to the US. There is probably one major concern for the domestic economy: house prices. Canada is among the most vulnerable housing markets in the world, with price-to-income ratios around 9x in many cities (compared to 5-6x in the US). Whether we’ll see a sizeable but controlled descent or a fully-fledged housing crash will depend on the Bank of Canada and the depth of the recession. Monetary policy and valuation: It does appear that the BoC has started to consider domestic warning signals (probably, also house prices), and recently shifted to a more moderate pace of tightening. Markets are currently expecting rates to peak around 4.25/4.50% in Canada, and we tend to agree. Barring a rapid acceleration in the unemployment rate, a housing crash should be averted. It is also likely that the BoC will start cutting before the Fed in 2023. All in all, accepting the downside risks stemming from the housing market and/or a further deterioration in risk sentiment, we see room for a descent in USD/CAD to the 1.25 level towards the end of 2023. In our BEER model, CAD is around 20% undervalued in real terms. AUD/USD: Riding Beijing’s roller coaster   Spot Year ahead bias4Q221Q232Q233Q234Q23 AUD/USD 0.68 Mildly Bullish 0.66 0.66 0.68 0.69 0.70 Exposure to China: The Australian dollar is a high-beta currency, and the direction of global risk sentiment will be the key driver next year. We think that a gradual recovery in sentiment will be accompanied by a still challenging energy picture, which may force investors to choose which pro-cyclical currencies to bet on. When it comes to AUD, the China factor will remain very central, as Australia has the most China-dependent export machine in the G10. Our economics team’s baseline scenario is that the real estate crisis will be the main drag on growth in China and while retail should recover on looser Covid rules, slowing global demand should hit exports. One positive development: the new Australian government is seeking a more friendly relationship with Beijing, paving the way for the removal of export curbs next year. Commodities and growth: Iron ore remains Australia’s main export (estimated at $130bn in 2022), and it is a very sensitive commodity to China's real estate sector. Our commodities team thinks a return to $100+ levels is unlikely given the worsening Chinese demand picture, but still forecasts prices to average $90/t in 2023. The second and third largest exports are oil and natural gas ($100bn combined). Here, we see clearly more upside room for prices, especially on the natural gas side. On balance, we expect the commodity picture for Australia to be rather constructive next year, which could offer a buffer to the Australian economy during the downturn. Growth in 2022 should have topped the 4% mark, but that will be much harder to achieve in 2023. The combination of higher rates, reset mortgages, a slowing housing market and possibly softening labour market should bring growth back closer to 3%. This would still be an extremely strong outcome against the backdrop of global weakness.   Monetary policy and valuation: The Reserve Bank of Australia has been one of the 'pioneers' of the dovish pivot, and a return to 50bp increases seems unlikely, as the Bank is probably monitoring the rather overvalued housing market, and the inflation picture is less concerning than in the US or in Europe. Most Australian households have short-term fixed mortgage rates, and we could see a deterioration in disposable income (especially at the start of the year). We think the RBA will be careful to avert an excessively sharp housing contraction, and we expect rates to peak at 3.60% (well below the Fed and the Reserve Bank of New Zealand) and cuts from 3Q23. This would mean a less attractive carry – and less upside risk in an optimistic scenario for global sentiment; but also less damage to the economy, which may play in AUD’s favour in our baseline scenario. Valuation highly favours AUD, as the positive terms of trade shock means that AUD/USD is 20% undervalued in real terms, according to our behavioural equilibrium exchange rate (BEER) model. We have a moderately upward-sloping profile for the pair in 2023, but high sensitivity to risk sentiment and China suggests downside risks remain high. NZD/USD: Dodging the housing bullet   Spot Year ahead bias4Q221Q232Q233Q234Q23 NZD/USD 0.62 Mildly Bullish 0.60 0.60 0.62 0.63 0.64 Monetary policy: The Reserve Bank of New Zealand has given very few reasons to believe it is approaching a dovish pivot. Markets are currently expecting the Bank to hike well into 2023, and take rates to around 5.0%. While inflation (7.2% year-on-year) and job market tightness (unemployment at 3.3%) both remained elevated in the third quarter, there are growing concerns about the rapid downturn in the New Zealand property market, which in our view will trigger either an earlier-than-expected end to the tightening cycle or a faster pace of rate cuts in 2023. Housing troubles: The RBNZ recently published its financial stability report, where it showed relatively limited concern about households’ ability to withstand the forthcoming downturn in house prices. In its August 2022 forecasts, the RBNZ estimated that the YoY contraction in house prices will reach 11.6% in the first quarter of 2023. However, that implied an Official Cash Rate at 4.0%, so only 50bp of extra tightening from now, which seems too conservative now. House prices have fallen 7.5% from their first quarter 2022 peak so far, but the trend may well accelerate, especially given a hawkish RBNZ and the risk of slowing global demand hitting the very open New Zealand economy. External drivers and valuation: Even assuming a constructive domestic picture in the housing market and an attractive yield for the currency in 2023, external factors will determine how much NZD can draw any benefit. As for AUD, risk sentiment and China are the two central themes. The New Zealand dollar is more exposed to risk sentiment (as it is less liquid and higher-yielding) than AUD, but probably less exposed to China’s story. In particular, the real estate troubles in China may well hit Australia via the iron ore channel, while NZ exports (primarily dairy products) are much more linked to China’s Covid restrictions, which look likely to be gradually scaled back. In our base case, the two currencies should largely move in tandem next year. The real NZD/USD rate is 15% undervalued, according to our BEER model. EUR/DKK: Tricky mix of intervention and rates   Spot Year ahead bias4Q221Q232Q233Q234Q23 EUR/DKK 7.44 Neutral 7.44 7.44 7.44 7.44 7.45 Central bank policy: Danmarks Nationalbank delivered FX intervention worth DKK45bn in September and October to defend the EUR/DKK peg. On 27 October, it opted for a smaller rate hike (60bp) compared to the ECB (75bp), which briefly sent EUR/DKK close to the 7.4460 February highs before rapidly falling back to 7.4380/90. We think it will be a busy year ahead for the central bank, as we expect very limited idiosyncratic EUR strength and potentially more pressure on EUR/DKK. Having now exited negative rate territory, DN has much more room to adjust the policy rate for a wider rate differential with the ECB if needed. However, with inflation running above 10% in Denmark, DN may prefer FX intervention over dovish monetary policy to support the peg. We have recently revised our EUR/DKK forecast, and expect a return to 7.4600 only in 2024. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

This year has been tough for Asian currencies – hit by surging energy prices, the strong dollar, and in some cases central banks being a little slow to react. Their course in 2023 will again be determined by the dollar trend and also diverse local stories. We see 3-5% gains in Asian FX against the dollar in 2023, with the Korean won outperforming In this article Local and international factors are still uncertain Source: Shutterstock Local and international factors are still uncertain For all the effort that goes into forecasting Asian exchange rates, the last year has shown that apart from some short-lived deviations, dollar strength was the principal driving factor and EUR/USD provided perhaps the best clue as to both direction and magnitude. Within this period, there were times when other drivers took over – energy dependence was pivotal during the period immediately following the Russian invasion of Ukraine with the Indian rupee (INR) and Thai baht (THB) suffering badly while the Indonesian rupiah (IDR), Malaysian ringgit (MYR), and Australian dollar (AUD) outperformed. Then the differing inflation experiences, coupled with how much the respective central banks leaned against it, also held sway for a time. This saw the more interventionist economies (IDR, INR, PHP [Philippine peso]) which absorbed price pressures through fiscal buffers doing better at times compared to more market-oriented economies – such as the Korean won (KRW) – though this usually didn’t last. Then there were occasions when the more managed benchmark exchange rates of the region – chiefly the Chinese yuan (CNY) – would “reset” in response to local economic conditions and drag "satellite" currencies in north Asia along with it. In the end, though, perfect foresight of where EUR/USD was going would probably have been a better indicator than a full understanding of any of these other factors, and looking forward to 2023 we see few reasons why this should be much different over the coming 12 months. Asian Current a/c (% GDP) Refinitiv, ING   Our house view for EUR/USD still sees some near-term dollar strength, and for this reason, we anticipate there still being some more mileage in the weaker Asian FX story. But both the scale and duration of this residual USD-driven leg remain the subject of much debate. Any further aggressive USD appreciation could see the current account surplus economies of the region outperforming their peers (see chart). External balances across the region have been damaged by this year’s energy price spikes, although compared to the Asian Financial crisis in 1997, the region as a whole is still in a much healthier position with respect to external balances, FX reserves, and import cover (see also here).  At some point though, and possibly after some further Asian FX weakness, a number of factors will start to swing in the opposite direction. Local factors include: While still somewhat subdued, China’s economy will be in better shape in 2023 than it was in 2022. There are some tentative indications of a more nuanced approach to zero-Covid, and this may be amended further following the two sessions in March. The property development sector will still likely be a shambles, but its drag on the economy will be trending towards zero or small positives from the substantial negative in 2022. Either of the factors above may free up more fiscal resources at the local government level to push growth along. Across the rest of Asia, without a renewed energy price spike, local inflation rates should begin to moderate, allowing for some easing of policy rates and recovery of demand. Inflation already looks to be peaking in some economies and this trend is likely to spread. And while it may mean that policy rates can begin to be cut, the currency-relevant fact will be that negative real policy rates will shrink, and that could allow for some further currency strength. However, when the turn comes, how much further it has gone before this occurs, and how rapidly it reverses course, will be determined by a wide range of local and international factors, and remains the subject of considerable speculation. USD/CNY: Liquidity to remain ample   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/CNY 7.05 Neutral 7.22 7.35 7.25 7.18 7.13 Capital flows: Even though the yuan has been weak against the dollar, we have not seen net capital outflows reflected in the data. There are several possible reasons for this. More global asset indices include China's onshore assets in their portfolios. This can smooth out volatility as the Chinese market often has low correlations with other markets. Another more likely factor is that offshore Chinese entities could be remitting dollars to their onshore counterparts and then converting them to yuan. There has also been a higher trade surplus every month so far this year. All of this adds up to a strange pattern of weak yuan mapping with net capital inflows. This pattern could continue until the People's Bank of China (PBoC) believes that there is no more risk of quick and massive capital outflows. Macro backdrop: The Chinese economy has not been doing well in 2022 due to Covid measures, the real estate crisis, and recently, the slowdown in export demand from the US and Europe. Our GDP forecast for 2022 is only 3.3%. We believe that the Chinese government is gauging the risk to the healthcare system from re-opening by holding big events like the Beijing Marathon and Shanghai Expo. We may see some slightly more flexibility on Covid measures, but we believe that any important official announcement of Covid measures is more likely during the Two Sessions in March 2023. On real estate, more funding for local governments' 2023 budgets will be available by the end of 2022 via special bond sales. This should help local governments finish uncompleted homes faster. As such, there should be more construction activity in the first half of 2023 compared to the second half of 2022. But the risk of recession in the US and Europe will weigh on Chinese exporters and manufacturers, and therefore the jobs market. Due to the weakness of the economy, there is no inflation pressure and slight PPI deflation pressure in 2022. It is unlikely that high inflation will occur in China in 2023 given the weak economic prospects. With a low base effect and some improvements domestically, our GDP forecast for 2023 is 5.3%. PBoC and rates: The PBoC has not changed policy interest rates since August 2022, and the time before that was in January 2022. We believe that conventional monetary policy tools, that is, policy interest rates and required reserve ratio adjustments (RRR), are not efficient to tackle existing economic conditions from Covid measures and the real estate crisis. The PBoC has turned to lending to domestic development banks that in turn lend to local governments. This gives some breathing room on fiscal pressures. And this is more efficient as there is no lag time to get funding compared to commercial loan and bond channels. It is possible that the current practice will continue until some uncompleted homes are finished and Covid measures become more flexible. Consequently, we do not expect any change in policy interest rates in 2023. USD/INR: Real rates turn less negative   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/INR 81.10 Neutral 83.00 84.00 83.00 82.00 82.00 Capital flows: One of the factors providing support to the INR during the past year has been the expectation that Indian Government Securities (G-Secs) would be included in one or more of the global bond indices. That expectation got knocked back in early October this year, mainly on disagreements between JP Morgan and India’s Finance Ministry on settlement issues (India wants bond trades settled locally, not at Euroclear) and taxation (India is unwilling to treat foreign bond investors differently to local investors for the purposes of capital gains). There is still some scope for inclusion in 2023, but it doesn’t sound as if India’s government is all that willing to make concessions. There may be more scope for equities to draw in capital in the second half of fiscal 2023, as the dry spell in IPOs is thought likely to end with around INR10.5tr reported of approved capital raising and a further INR7tr awaiting approval. Macro backdrop: The Indian economy has not been immune to the global headwinds following Russia’s invasion of Ukraine and is particularly exposed to high energy prices given its large net importer position. Despite taking advantage of some cheaper Russian crude supplies and absorbing some price pressures through margins at state-owned petroleum companies and reduced import excise duties, inflation has still risen above 7%, and this has taken its toll on the growth outlook, with third-quarter 2022 GDP coming in slower than expected, and putting previous expectations of a 7% growth rate for 2022 out of reach. We now look for growth of 6.3% in the calendar year 2022. This is still one of the highest rates of growth in Asia, and there is scope for some firming of the growth environment next year if there are no further price shocks.   RBI and rates: After abandoning its awkward dance of trying to support both growth and leaning against rising prices in early April this year, the Reserve Bank of India (RBI) has taken a steadfast and convincing stance against inflation, taking the repo rate from its low of 4.0% up to 5.9% currently. We look for a further 25bp of rate increases in December, and perhaps another 25bp in February, taking rates to 6.4%. But by then, we may well see inflation coming off its highs, which could leave the real (adjusted for actual inflation) policy rate close to zero, rather than its current strong negative rate. This could mark the peak for the RBI, as inflation should fall further from this point, enabling real policy rates to float back into positive space. USD/IDR: Bank Indonesia to step up rate hikes   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/IDR 15540.00 Neutral 15850.00 15950.00 15800.00 15700.00 15600.00 Trade balance support could fade: The IDR was well supported by inflows related to trade for the most part of 2022. Exports managed to easily outpace imports this year as the export sector benefited from the surge in global commodity prices. Trade surpluses hit a record high in April ($7.5bn) but have since narrowed with the latest surplus down to $4.9bn. Slowing global trade and a dip in coal prices point to a further narrowing of the trade surplus which would impact Indonesia’s current account balance. Bank Indonesia (BI) expects the current account to settle between 0.4-1.2% of GDP for 2022 but revert to a deficit in 2023. This suggests that key support for the IDR in 2022 will not be around next year resulting in sustained pressure on the currency.   Macro backdrop: Indonesia has strung together six quarters of positive growth, rebounding quickly from the pandemic-induced recession in 2021. Growth got a boost from exports, which in turn helped support the recovery of the manufacturing sector. Meanwhile, relatively subdued inflation in the first half of 2022 helped support domestic consumption with retail sales benefiting from increased mobility. Inflation, however, has finally picked up in recent months and is likely to accelerate further after the government increased the price of subsidised fuel. The recent weakness experienced by the IDR has also contributed to higher inflation, a trend that should extend to 2023. Accelerating inflation is likely to cap consumption growth in the coming quarters while expectations for slower global trade suggest that exports will be subdued going into 2023. With the projected slowdown in the second half of 2022, we expect full-year growth to settle at 5.2% year-on-year in 2022 while 2023 growth could slip to 4.4%.  Central bank to stay hawkish: Bank Indonesia was a latecomer in terms of rate hikes in 2022 as inflation stayed relatively subdued for the first half of the year. Faster inflation by the second half of the year prodded the previously reluctant central bank to finally increase policy rates in a surprise move in August. BI has since been actively tightening, increasing rates by 75bp so far, and will likely need to continue tightening to support the IDR well into 2023. BI Governor Perry Warjiyo previously highlighted his preference for a stable currency, and we expect BI to hike rates by at least 100bp to help steady the IDR. USD/KRW: Second half of 2023 to be better for Korea and the won   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/KRW 1320.00 Mildly Bearish 1350.00 1400.00 1350.00 1300.00 1250.00 Capital flows: Foreigners have been net sellers of the Korea Composite Stock Price Index (KOSPI) until recently, but we see foreign investors coming back to the Korean equity market, as the sharp outflows have stagnated over the past few months. We believe that the KOSPI will benefit from an asset allocation perspective as the China-US conflict intensifies, and thus decoupling with the Chinese market is expected to some extent. On the bond side, Korea has been added to the watch list for World Government Bond Index (WGBI) inclusion and it is possible to join the WGBI next year at the earliest. This is a positive factor providing support for the Korean won and Korean authorities appear to believe inclusion is very promising. Several new initiatives including the exemption of the withholding tax, reforms to improve accessibility to the KRW market, and Korean treasury bond (KTB) trading via ICSD (International Central Securities Depositories) were proposed to improve the structure and accessibility of its capital market for investors. Macro backdrop: The Korean economy is heavily dependent on exports and is a net energy importer. The trade deficit will continue for some time as semiconductor exports continue to struggle while energy prices remain high. We expect the current account to be in a surplus, but weak trade performance will weigh on the currency markets.   BoK and rates: The Bank of Korea (BoK) has been one of the fastest-moving central banks in the race to raise rates since last year and is expected to become one of the fastest-moving to cut rates next year. We expect a 25bp hike in November, and perhaps another 25bp in January, taking rates to 3.50%. But the BoK is likely to go into a wait-and-see mode afterwards, as inflation is expected to slow to below 4% and fall further. To lighten the burden for businesses and households, the BoK will likely enter into an easing mode from the second half of next year. USD/PHP: How much longer can BSP hold the line?   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/PHP 57.20 Neutral 58.75 59.00 58.50 58.00 57.50 Current account woes to persist: The Philippines is highly dependent on imported food and energy items and has traditionally run trade deficits. Elevated global commodity prices bloated the import bill resulting in a record-wide trade shortfall. Contributing to the stark widening of the trade deficit was the economic reopening after mobility restrictions were finally relaxed in the first half of the year. Resurgent domestic demand also resulted in increased capital and consumer goods imports which were enough to push the current account into a deficit. The trade balance and current account are likely to remain in deficit in 2023, especially if commodity prices stay elevated. The central bank expects the current account deficit to widen to roughly $19bn in 2022 and $20bn in 2023, suggesting that pressure on the PHP will persist next year.    Macro backdrop: The Philippines posted solid growth numbers in the first half of 2022 after the national government relaxed mobility restrictions after improvements in Covid-19 containment. The reopening of the economy helped along by election-related spending powered strong growth for the first half of the year (7.7%). The second half of the year, however, presents a much more challenging landscape, which also marks a change in leadership after Ferdinand Marcos Jr. won the presidential election in May. Surging inflation on top of rising borrowing costs is likely to translate to a significant slowdown in growth for the second half of 2022 and the whole of 2023. We expect inflation to hit 5.6% year-on-year in 2022 and stay elevated at 5.0% in 2023, which would translate to 5.9% YoY growth in 2022 and 4.4% in 2023. Busy year for BSP: It has been a busy year for the Bangko Sentral ng Pilipinas (BSP). The central bank faced a quick acceleration in price pressures as well as a change in leadership after the presidential election. Given the country’s dependence on imported energy and food, price pressures rose quickly to drive inflation well-past target (currently at 7.7% YoY). Several deadly typhoons also pushed up food prices after the storms caused significant crop damage. The BSP responded with several rate increases, even resorting to an off-cycle decision in July as well as a pre-announced rate increase which will take the policy rate to 5% by November. BSP Governor Felipe Medalla, who assumed his post in July, vowed to match any move by the Federal Reserve in the coming months and maintain a 100bp differential with the Fed funds target rate. We expect BSP to take the policy rate to 5.5% by year-end with at least an additional 50bp worth of rate hikes in 2023 should the Fed continue to raise rates.    USD/SGD: MAS waits for recent tightening to take hold   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/SGD 1.37 Neutral 1.39 1.40 1.38 1.375 1.37 Growth outlook: Singapore has managed to post decent growth in 2022 despite the increasingly challenging global backdrop. Relatively robust trade activity in the first part of 2022 has helped support growth momentum although we have noted a slight deceleration of late. Meanwhile, retail sales recorded a steady pace of expansion despite the sharp uptick in prices. One possible development that could be supporting retail sales is the sustained influx of foreign visitors which may be driving the consistent growth of sales for department stores and recreational goods. Retail sales growth could help offset the projected slowdown in global trade somewhat and we expect Singapore growth to settle at 3.5% YoY in 2023.        GST to add to inflation pressure in 2023: Surging global commodity prices and robust domestic demand resulted in faster price increases for Singapore with core inflation rising 5.3% YoY as of September. The Monetary Authority of Singapore (MAS) now expects headline inflation to settle at 6% YoY for 2022 and between 5.5-6.5% in 2023 given current developments and the scheduled increase in the Goods and Services Tax (GST) from 7% to 8% next year. Risks to the inflation outlook remain skewed to the upside, especially if commodity prices stay elevated in 2023. A prolonged period of high commodity prices should eventually evolve into additional second-round effects that would fan both headline and core inflation.             MAS tightens aggressively: The MAS has been busy over the past few months, surprising market participants by tightening unexpectedly in October 2021, the first of five separate moves to tighten monetary policy. Given surging core inflation, MAS needed to tighten policy aggressively with two of the moves carried outside of scheduled meetings. The MAS is likely to remain hawkish given expectations that core inflation will average 3.5-4.5% YoY in 2023 and stay elevated until the second half of next year. We believe, however, that the MAS would be less aggressive in tightening should it need to act as it monitors the impact of its aggressive tightening moves. USD/TWD: Wider differentials weigh on TWD   Spot Year ahead bias4Q221Q232Q233Q234Q23 USD/TWD 31.00 Neutral 32.40 33.00 32.00 31.70 31.40 Capital flows: The weakness of the New Taiwan dollar (TWD) in 2022 mainly comes from net capital outflows of foreign investments in Taiwan’s equity market. The net outflows year-to-date amounted to $48.2bn as of 7 November. This is a lot compared to historical data of the next biggest outflows at $15.6bn in 2021, which was itself bigger than the outflows of $15.5bn in 2008. Capital outflows from the equity market have led to a fall in foreign exchange reserves of $5.62bn. Offloading of Taiwan equities should continue in 2023 as semiconductor sales should fall further as a result of the expected recession in the US and Europe and weak demand in China. Macro backdrop: Taiwan enjoyed strong semiconductor sales in the first half of 2022, but after this the economy turned sour when Covid hit, and then weakened further when weak demand in China led to a fall in semiconductor sales. Adding to this pressure is softer demand for smart devices in 2022. As the Taiwan economy specialises in semiconductor manufacturing and sales, it is prone to external economic conditions. Taiwan did experience some higher-than-normal inflation of around 3.5% YoY in the first half of 2022. But this was then followed by softer inflation pressure in the second half of 2022 as the economy slowed. For 2023, we believe that semiconductor sales will continue to fall as a recession in the US and Europe is likely in the first half of 2023, and China’s consumption demand will remain weak due to Covid measures and the ongoing real estate crisis. Taiwan's central bank and rates: As Taiwan has not encountered as high inflation as the US, Taiwan’s central bank has raised interest rates at a much slower incremental pace than the Fed. As of November 2022, Taiwan’s central bank had raised rates by just 0.5 percentage points in 2022, which is much smaller than the Fed’s 3.75 percentage points. This is one of the reasons why TWD has fallen over 15% so far in 2022. If the Fed pauses its hiking in 2023, the interest rate differential should stop widening. TagsFX Outlook FX Currencies Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

On Friday the USD/JPY pair broke away from the embedded price channel line of 139.65 with the intention to reach the resistance of the upper nearest line around the 141.76 mark. The pair continues to rise in today's Asian session. After reaching 141.76, the price could go back to 139.65 or even lower, to 138.55. Falling below 139.65 will also make the 138.55 target available. Staying under this level opens the 136.80 target. The price is trying to overcome the MACD line on the four-hour chart. A downward reversal from it is the basis for the current price reversal from the current levels. The way to 141.76 will open up when the price settles above the MACD line. The signal line of the Marlin Oscillator moves almost horizontally, neutrally. We are waiting for developments. Relevance up to 03:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327602

The Japanese yen is getting pummeled at the start of the trading week.  In the North American session, USD/JPY is trading at 141.90, up 1.09%. Will BoJ Core CPI continue its upswing? Japan releases BoJ Core CPI, the Bank of Japan’s preferred inflation indicator later today. The indicator has accelerated for eight consecutive months, as inflation continues to move higher. National Core CPI, released last week came in at 3.6%, up from 3.0%. A higher-than-expected reading is unlikely to lead to any change in policy at the BoJ. Governor Kuroda has insisted that inflation is temporary and should peak around 3%.  The bank’s uncompromising stance, which has capped interest rates on Japanese government bonds, has resulted in the yen sliding about 20% against the dollar this year. Rather than stem the yen’s decline with interest rate hikes, the government has responded with massive currency interventions. Such unilateral moves are unlikely to have a lasting effect, with the Fed still aggressively raising rates and the US/Japan rate differential only getting wider. Federal Reserve members have been delivering hawkish messages to the markets, in a coordinated response to the rash exuberance in the markets following the US inflation report. The Fed speak campaign has dampened risk appetite and dashed hopes of a Fed U-turn on rate policy, which has helped the dollar recover some of its recent losses. The Fed has long insisted that one or two reports showing weaker inflation is not proof of a trend, although the markets have gone in a tizzy whenever inflation has softened. The markets have priced in a 50-bp hike next month, although some Fed members have stated that a 75-bp move remains on the table. USD/JPY Technical USD/JPY has support at 141.55 and 140.70 There is resistance at 142.74 and 144.20   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. USD/JPY jumps to 142, BOJ Core CPI next - MarketPulseMarketPulse

Economists at Wells Fargo see the Japanese currency strengthening over the medium term, targeting a USD/JPY exchange rate of 135.00 by Q1-2024. Fed to stop raising rates by early 2023 “Although we anticipate US Dollar strength to continue into early 2023, we see the Japanese currency strengthening over the medium term, and believe the USD/JPY exchange rate could reach 135.00 by Q1-2024.”  “Changes in economic fundamentals should be a more influential currency driver than recent foreign exchange interventions, and we believe the Yen will be especially sensitive to changes in monetary policy rates. Given we expect the Federal Reserve to stop raising rates by early 2023, we see solid prospects for a stronger Yen past that point.”  

Trading volumes were quite low early this week because of the upcoming holiday in the US and increased expectations that the Fed will continue aggressively raising rates, at least until the end of this year. Even so, optimism prevailed in markets because the latest inflation data in the US noticeably decreased. The worsening situation in China, where the coronavirus infection continues to run rampant, has also prompted authorities to suspend school and business activities in Covid-infected areas. This points to a likely decline in the country's economic growth, which in turn is bound to have an impact on exports and imports to the US and other economically advanced countries. Market volumes will continue to decline, which will lead to a strong increase in volatility. However, it is unlikely to lead to any noticeable changes in the forex market because the sideways trend will continue, with some local rises or falls in the pairs where the dollar is present. A similar scenario could be seen in the stock markets, connected firstly with the above-mentioned factors, and secondly with extremely high uncertainty about the Fed's decision on rates and the bank's plans and forecasts for next year. Most likely, the decline will continue even amid positive news or data on the US economy. The focus will remain on the October Fed minutes, which might be the reason for noticeable movements. Forecasts for today: USD/JPY The pair is trading below the strong resistance level of 142.25. A break above it might push the quote to 143.30. AUD/USD The pair might resume the decline amid negative news from China and gloomy sentiment in the markets. A decline below 0.6585 might push the quote down to 0.6500.   Relevance up to 08:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327774

The Japanese yen has stabilized on Tuesday and is trading at 141.58, down 0.37%. USD/JPY rocketed higher on Monday, gaining 1.2%. BoJ Core CPI jumps to 2.7%  With inflation continuing to gain traction in Japan, there shouldn’t have been much surprise that BoJ Core CPI accelerated in October for a ninth successive month. Still, the 2.7% gain was much stronger than the prior reading of 2.0% and the consensus of 2.2%. The reading comes on the heels of National Core CPI, which rose to 3.6%, up from 3.0%. The Bank of Japan is unlikely to change its ultra-loose policy, even with inflation rising and a weak yen contributing to higher costs for households and businesses. The yen is well below the highs we saw in late October, when USD/JPY breached the 150 level and triggered a currency intervention. I am doubtful that such unilateral moves can have a lasting effect, but it is a tool that the government likes to resort to in order to dissuade speculators from pushing the yen lower. What may lead to a change in BoJ policy is the changing of the guard at the central bank. Governor Kuroda is scheduled to step down in April, after a 10-year stint as head of the bank. There have been calls to re-examine the bank’s policy, which has been in place for years. Sayuri Shirai, a former BOJ board member and candidate for a deputy BOJ governor, does not favor sharp rate hikes but has urged the bank to review its stimulus policy, show some flexibility and simplify its communication with the markets. This kind of thinking will be a breath of fresh air at the BoJ, whose policy meetings are usually drab affairs that are ignored by the markets, as the BoJ simply reiterates its policy and expresses concern about the decline in the yen. The most recent US inflation report was softer than expected, sending equity markets flying and the US dollar sliding lower. The Fed has responded with a steady stream of hawkish statements from Fed members, which has succeeded in dampening risk appetite and stabilizing the dollar. Fed member Mary Daly weighed in on Monday, stating that inflation remained unacceptably high and projecting that the fed funds rate will peak at 4.75%-5.00%   USD/JPY Technical USD/JPY is testing support at 141.55. Below, there is support at 140.77 There is resistance at 142.74 and 143.60 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

On Monday, the USD/JPY pair rose above the resistance of the embedded price channel line at 141.76, on Tuesday it retreated and fell below the level, and this morning it appears like it wants to test it from below. The signal line of the Marlin oscillator is going up, so the price might just push through with the test, and with another breakout of the resistance of 141.76. Nevertheless, we can only talk about growth once the price has overcome the highs of the last two days (142.25). In this case, the MACD line near 144.85 may become the target for further movement. But we are waiting for the price to fall to the first support of 139.75. Breaking through the level will open the second target at 138.60. On the four-hour chart, the price is falling above the balance and MACD indicator lines. The MACD line and the Marlin oscillator are going down - there is a high probability of continuing such trends. To settle, the Marlin oscillator needs to move into the negative territory. This will happen once the price goes below the local high on the 17th (140.74).   Relevance up to 03:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327868

Although markets are sluggish ahead of the upcoming holiday and long weekend in the US, stock indices are rising, while Treasury yields and dollar are falling. This is mainly due to the slightly less hawkish comments from Fed speakers this week, which is in contrast with the statement of St. Louis Fed President James Bullard last week that stressed that interest rates should reach at least 5-5.25%. San Francisco Fed chief Mary Daly also pointed out the need to be mindful of delays in the transmission of policy changes, and Atlanta Fed President Raphael Bostic stated that an additional tightening of 75-100p would be justified. So far, the rate forecast is stable. There is a 75% chance of a 50p increase, another 50p in February, and a peak to 5.06% by June. This is the benchmark that is currently guiding the markets. Today is packed with important statistics from the US. The first one will be the report on orders for durable goods, which will reflect the state of the industrial sector and consumer demand. Next is the consumer confidence indices from the University of Michigan, followed by the Fed minutes, where players will be looking for signals of a dovish reversal by the Fed. There are no signs that the dollar will resume rising. USD/CAD The slowing Canadian economy has not yet led to any noticeable deflationary pressure. The labor market is strong, with employment and wage growth being higher than that of the US. Retail sales also rose 1.5% m/m in October, which means that the Bank of Canada has more room to maneuver than the Fed and so far can implement a policy of containing inflation without looking at the rate of economic growth. Bank of Canada Governor Tiff Macklem will be giving a speech today, where markets expect to see a similar position to that of the Fed. However, this is likely to rule out strong moves. Regarding the loonie, the latest CFTC report showed that cumulative short positions declined by 402 million to -973 million, which means that there is a slow shift in sentiment. But overall the loonie remains bearish, with the settlement price pointing downwards and below the long-term average. It has a chance to strengthen. The possible rise of USD/CAD will end in the resistance area of 1.3500/30, followed by an attempt to test the local low of 1.3224. Chances for a deeper decline have become higher, with the target being the technical support at 1.30. USD/JPY Core CPI rose 3.6% y/y in October, 0.6% higher than that of September's. The data has risen for the 14th consecutive month, and the rate of growth is already higher than in 2014, when the sales tax was introduced to break out of the deflationary squeeze. By all indications, the time for deciding whether to end the stimulus programs is approaching. Last November 10, Prime Minister Fumio Kishida met with Bank of Japan Governor Haruhiko Kuroda, which resulted in new signals. Kuroda expressed the BoJ's position that a unilateral sharp depreciation of the yen is not welcome. This means that raising the yield ceiling for 10-year bonds from the current 0.25% is rejected, as is the ending of QQE. The rising inflation and ruling out of the BOJ of rate cuts for the time being sends a clear signal to investors who are selling the yen. As a result, the net short positions continued to decline, falling by 548 million to -5.909 billion during the reporting period. The settlement price is also reversed downward. For now, there is less reason for USD/JPY to resume its record rise as trading is highly likely to be sideways. There is also little chance that it will move beyond the technical resistance at 143.12, unless there are clearer signals from the Bank of Japan.     Relevance up to 07:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327882

USD/JPY Strong Sellers! The USD/JPY pair is dropping at the time of writing. It's located at 139.43 above the 138.42 former low which represents a downside obstacle. The downtrend line stands as an upside obstacle. As long as it stays below this line, the rate could approach and reach new lows. Only staying above 138.42 former low could announce a potential growth at least towards the downtrend line. USD/JPY Trading Scenario! Dropping and stabilizing below 138.42 announces a deeper drop and helps traders to sell the pair. Relevance up to 21:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/302270

The Japanese yen has posted strong gains for a third straight day. USD/JPY is trading at 138.43, down 0.82% on the day. US markets are closed for the Thanksgiving holiday, but that hasn’t put a damper on the yen’s impressive rally. Inflation has been on the rise in Japan, although at much lower levels than we’re seeing in Europe and the United States. The Bank of Japan’s preferred indicator, BOJ Core CPI, accelerated in October for a ninth straight month, rising to 2.2%.  We’ll get a look at Tokyo Core CPI for October later today, which is expected to edge up to 3.5%, up from 3.4% in September. The indicator has accelerated for five consecutive months. Japan’s manufacturing contracts Japan’s economy remains fragile, and the manufacturing sector hit a snag earlier today. Manufacturing PMI fell to 49.4 in  October, down from 50.7, which was also the consensus. This marked the first contraction in two years – the 50.0 level separates contraction from expansion. Manufacturers in Japan and elsewhere are grappling with higher input costs, while domestic and external demand has weakened, and this situation is unlikely to improve until inflation turns lower and growth recovers. The Fed minutes were viewed by the markets as dovish, which has pushed the US dollar lower today. The minutes noted that the Fed plans to implement smaller rate hikes “soon”, and the markets are expecting that already at the December meeting, the Fed will raise rates by “only” 50 bp, after four straight hikes of 75 bp. Although inflation remains a huge concern for Fed members, there is no agreement on the terminal rate. The 4.75%-5.25% range appears a safe bet, at least for now, which means that the current rate-hike cycle is on schedule to wind up in early 2023. USD/JPY Technical USD/JPY is testing support at 141.55. Below, there is support at 140.77 There is resistance at 142.74 and 143.60 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Japanese yen extends rally - MarketPulseMarketPulse

Yesterday, the yen reached strong support along the embedded price channel line of 138.60, piercing it a bit. This morning the price is slightly above the support. The Marlin oscillator is moving up, but the pair is far from being a lost cause and it hasn't lost anything yet - settling in the area below 138.60 can push the pair to fall further to 136.90. And there will be a risk of a price convergence with the Marlin oscillator. But if not, the next target is 135.17. A collapse in the stock market could be the driving force behind such a decline. On the four-hour chart, the price settled under the balance and MACD indicator lines. The Marlin oscillator is developing in the descending trend area. There is a higher probability of continuing the decline than the probability of a reversal. I expect the price to reach the target level of 136.90. Relevance up to 03:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328090

Although market activity dropped because of the holiday in the US, European stocks still grew, thanks to the contents of the latest FOMC minutes. Officials said in the protocol that they are considering a gradual reduction of interest rate hikes, which returned risk appetite. Looking ahead, it is likely that the rally will extend today despite the early closure of markets. If the rally does not start today, it is likely to happen early next week. The renewed decline in Treasury yields, which will not only keep dollar down but also put considerable pressure on it, could provide good support. And even though European and US stock indices are slightly down after yesterday's positive dynamics, the picture could change dramatically during today's European or US session. If that happens, increased demand for risky assets will affect dollar, prompting a continued decline. There is also a high chance that the positive dynamics will carry on next week, with stocks rising further and dollar continuing its collapse. A decline in US Treasury yields will be the determining factor. Forecasts for today: EUR/USD If traders manage to push euro above 1.0450, quotes could climb to 1.0580. USD/JPY If traders manage to push the pair below 138.45, quotes will drop down to 136.50.     Relevance up to 07:00 2022-11-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328128

FX markets are becalmed by holiday trading conditions in the US and a very light data calendar. A further unwinding of long dollar positioning remains the risk, but we think the dollar is getting close to some decent support levels. Elsewhere, 75bp rate hikes are still going through in the likes of Sweden and South Africa In this article USD: Focus on 'Cyber Five' retail sales EUR: A little less pessimism GBP: BoE stays hawkish JPY: Set for out-performance into 2023   US retailers have come up with the 'Cyber Five' sales promotion campaign which should boost retail sales    USD: Focus on 'Cyber Five' retail sales Today sees another holiday-shortened US session following the Thanksgiving public holiday. Innovative US retailers have come up with the 'Cyber Five' sales promotion campaign which stretches from Thursday's Thanksgiving all the way through to Monday. Expect to hear reports as to how this has gone, although high levels of employment and lower levels of petrol prices (now $4.30/gallon versus a high of $5.50 in June) suggest retail sales may hold up despite talk of the looming 2023 recession. FX markets are becalmed and the only stand-outs yesterday were the large 75bp rate hikes in Sweden and South Africa, plus the 150bp rate cut in Turkey in preparation for elections next year. We also note the further legacy of this year's rise in dollar and US yields, where Ghana looks set to impose a 30% haircut on Eurobond holders as it seeks a deal with the International Monetary Fund (IMF). Back to the dollar – buy-side surveys taken right before the big sell-off on 10/11 November still had long dollar positions as 'the most crowded trade' and saw the dollar as the most over-valued on record. We doubt those views will have changed that much and the buy-side will now be eager to sell any dollar rallies, believing the dollar may well have peaked. That may be the case, but as we discuss in our 2023 FX outlook, we doubt conditions will be in place for a major dollar bear trend.  We mentioned earlier that the dollar may be nearing some decent support levels. We think DXY has strong support near 105.00, marking the 200-day moving average, important lows in early August and a big 38.2% retracement level of the whole rally from summer 2021 (when the Fed started this dollar rally with its more hawkish Dot Plots). For those needing to buy dollars, DXY levels near 105 may be as good as any. Chris Turner  EUR: A little less pessimism Business surveys in Germany and France released yesterday showed a little less pessimism. And increasingly there is a view that the forthcoming downturn will be mild because of issues like a) strong employment b) large government support and c) strong household savings. Our eurozone team, however, are a bit more pessimistic. Certainly, Europe's large exposure to the manufacturing cycle and what should be weaker export markets make us sub-consensus on European growth prospects.  Despite the looming eurozone recession, ECB hawks such as Isabel Schnabel suggest it may be premature to scale back rate increases. Currently, the market prices 61bp of hikes on 15 December (we expect 50bp). Clearly, the 50bp versus 75bp debate will continue to run. For EUR/USD, it still looks like the big dollar story is dominating. We cannot rule out a further correction into the 1.05-1.06 region but would see these as the best levels before year-end. These levels could be seen next week should Fed speakers or November US jobs data prove the catalyst. Chris Turner GBP: BoE stays hawkish Recent speeches have seen the Bank of England (BoE) staying pretty hawkish despite the fiscally tight budget and broadening consensus of recession. We think positioning has played a major role in this sterling recovery and GBP/USD could see some further, temporary gains to the 1.22/23 area – which we would again see as the best levels before year-end.  Equally, EUR/GBP has good support in the 0.8550/8600 area, and given our view of a difficult risk environment into year-end and early 2023 as central banks raise rates into recessions, sterling should remain vulnerable. Chris Turner  JPY: Set for out-performance into 2023 Probably the best chance of the dollar having peaked is against the Japanese yen (JPY). USD/JPY is now nearly 10% off its high near 152 in late October. Next week we will find out whether Japanese authorities sold FX in November – having sold a combined $70bn in September and October. So far intervention can be considered to be exceptionally well-timed and effective.   If the dollar is to move lower in 2023, USD/JPY would be the best vehicle to express the view, in our opinion. This is based on the view that the positive correlation between bonds and equities can break down – bonds rally, equities stay soft – and that the US 10-year Treasury yield ends 2023 at around 2.75%. USD/JPY could be trading at 125-130 under that scenario. We now suspect that any dollar rally between now and year-end stalls at 142/145. In addition, USD/JPY will be facing a change in the ultra-dovish Bank of Japan governor next April – a big event risk for local and global asset markets. Chris Turner TagsYen FX Dollar   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

USD/JPY has reversed directions and posted gains on Friday, after three straight losing sessions. The yen is trading at 139.39, up 0.54% on the day. US markets are open for limited hours due to the Thanksgiving holiday, and there are no US releases on the schedule. Tokyo inflation hits 40-year high The caption above may sound dramatic, but inflation in Japan is far from the levels we’re seeing elsewhere, such as double-digits in the UK and the eurozone. Still, Japan finds itself dealing with rising inflation, after decades where deflation seemed a permanent part of the economic landscape. Tokyo Core CPI rose to 3.6% in November, nudging above the consensus of 3.5% and the consensus of 3.4%. This marked the highest reading since April 1982. There’s no arguing that core inflation isn’t accelerating – Tokyo Core CPI has strengthened for six straight months and BOJ Core CPI for ninth consecutive months. This extended uptrend belies BOJ Governor Kuroda’s insistence that cost-push inflations is only temporary and that an ultra-accommodative policy is needed to ensure that inflation becomes sustainable. The BOJ is not showing any inclination to change policy and the recent improvement in the yen means one less headache, as the need for a currency intervention has diminished. It’s likely to be business as usual for the BOJ until the spring of 2023, with two key developments on the calendar – wage negotiations and a new governor for the central bank. The Federal Reserve remains in a hawkish mode, sort of. The Fed’s stance, reiterated in this week’s minutes, remains somewhat mixed. On the one hand, the Fed has signalled that it will reduce the size of rate hikes “soon”, and the markets have priced in a ‘modest’ 50 bp hike in December after four consecutive 75-bp increases. At the same time, some Fed members are projecting that the terminal rate will be higher than previously expected. This mixed message has created uncertainty about what it means for the US dollar – will “lower for longer” raise risk sentiment and weigh on the dollar, or will investors view the Fed as remaining hawkish and stick with the US dollar? We’ll have to wait and see how the markets answer this question.   USD/JPY Technical USD/JPY faces resistance at 139.62 and 140.37 There is support at 138.43 and 137.19 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

Tokyo's headline inflation estimates put the annual price growth rate at 3.8% in November against 3.5% a month earlier and the 3.6% expected. The core index, which excludes food and energy prices, accelerated from 2.2% to 2.5% (the highest since 1992), suggesting that nationwide inflation continues to accelerate beyond the 2% target. Nevertheless, a country accustomed to deflation is in no hurry to let go of its habits. Rising prices only lead to a temporary activity drop rather than causing consumers to run to the shops for fear that tomorrow will be even more expensive. Household spending rose 2.3% YoY in September, and wages rose by 2.1%. And while local corporate commodity prices rose 0.6% m/m and 9.1% y/y in October, the Bank of Japan reported today that the Corporate Services Price Index rose only 1.8% y/y vs 2.1% a month earlier. Annual rate increases in both indices have stalled, showing the first signs of a reversal to a slowdown. It may take 2 to 4 months before the stabilisation of producer prices spreads to consumer price inflation. Nevertheless, we are already getting the first early signs, with Japan not having implemented any policy tightening but benefiting from globally lower commodity prices and a slowdown in economic activity. Also, in November, the Japanese finance ministry intervened, reinforcing the effect of the weaker dollar against other main competitors (euro, pound, franc). The appreciation of the domestic currency should further reduce domestic inflationary pressures. However, the increasing interest rate differential between the yen and other reserve currencies raises doubts about whether the yen will continue to rise. The critical question is whether global financial markets have entered the path of normalisation. If so, the primary trend in the months or years to come could be the carry trade strategy forgotten in 2008, where a low-interest rate currency funds purchases of a high-interest rate currency. Traders capitalise on the difference in overnight rates and the general upward trend of the high-yielding currencies. In such a scenario, the pullback of the USDJPY from the peak of 152 in October to the current 139 should be seen as a correction before a new growth impulse. Suppose the world growth will lose momentum sharply and markets regain appetite for defensive assets. In that case, a rapid unwinding of carrying trade positions could deepen the USDJPY correction to 125 by the end of March next year.

USD/JPY meets with a fresh supply on Monday amid reviving demand for the safe-haven JPY. The narrowing of the US-Japan rate differential also underpins the JPY and weighs on the pair. A modest USD strength could offer some support to the major and help limit any further losses. The USD/JPY pair struggles to capitalize on Friday's modest bounce and comes under some renewed selling pressure on the first day of a new week. The pair maintains its offered tone through the early European session and is currently flirting with the daily low, around the 138.30-138.25 region. The worsening COVID-19 situation drives haven flows towards the Japanese Yen, which is seen exerting downward pressure on the USD/JPY pair. In fact, China reported a record-high number of daily infections on Saturday, forcing the government to impose strict anti-COVID measures in several cities. Moreover, public discontent over the zero-COVID policy flared protests across China and raises concerns about a further slowdown in economic activity. This, in turn, keeps investors on the edge and boosts demand for traditional safe-haven assets. The flight to safety, along with growing acceptance of a less aggressive policy tightening by the Fed, continue to drag the US Treasury bond yields lower. This results in the further narrowing of the US-Japan rate differential, which provides an additional lift to the Japanese Yen. That said, a modest US Dollar strength extends some support to the USD/JPY pair. This, along with a big divergence in the monetary policy stance adopted by the Federal Reserve and the Bank of Japan, could help limit any further losses, at least for the time being. Despite a dovish assessment of the November FOMC meeting minutes, the US central bank is still expected to deliver another 50 bps rate hike in December. In contrast, BoJ, so far, has shown no inclination to hike interest rates. Moreover, BoJ Governor Haruhiko Kuroda reiterated that the central bank will stick to its monetary easing to support the economy and achieve the 2% inflation target in a stable fashion. In the absence of any relevant economic data, this warrants caution before placing fresh bearish bets around the USD/JPY pair.  

After strong gains last week, the Japanese yen has extended its gains on Monday. USD/JPY is trading at 138.23 in the European session, down 0.67%. Yen jumps on China unrest China has applied its Covid-zero policy with a heavy hand, but Covid cases continue to rise nonetheless. The mass lockdowns have triggered widespread protests, which some injuries reported. The unrest is likely to exacerbate supply-chain disruptions and dampen domestic demand, which has hurt risk appetite. This has resulted in flows to haven assets, such as the Japanese yen. USD/JPY dropped as much as 1% earlier today, but the dollar has managed to recover some of these losses. The yen also received a boost after Bank of Japan Governor Kuroda said that the tightening labour market will push wages higher. Kuroda has long insisted that rising inflation has driven by import costs and the weak yen and is transient. Higher wages would indicate that inflation is sustained, which could result in the BoJ making some changes in its ultra-loose policy. After a short trading week in the US due to the Thanksgiving holiday, the markets will have plenty of US events to digest this week. CB Consumer Confidence will be released on Tuesday, with the November report expected to dip to 100.0, down from 102.5. The key release of the week is nonfarm payrolls on Friday, which could have a major impact on the Fed’s decision to raise rates by 50 or 75 basis points at the December 14th meeting. Currently, the likelihood of a 50-bp hike is about 75%, versus 25% for a larger 75-bp increase. Investors are viewing a 50-point move as a dovish pivot, which has been putting pressure on the US dollar. Still, even a 50-bp hike would set a record for yearly rate hikes of 4.25%.   USD/JPY Technical There is resistance at 139.82 and 141.58 There is support at 137.39 and 135.63 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

Yesterday, the yen tried to reach the nearest support of the embedded line of the price channel at 137.00, but was pushed back up above the 138.60 line. This morning, the price is trying to go under 138.00, but it is currently prevented by the convergence that has almost formed. If the bears succeed, then the price will hit 137.00, the convergence will be in a more classical form (marked with a dotted line). On the four-hour chart, the price is building strength so it can cross the support of 138.60 reinforced by the MACD line. The Marlin oscillator is in negative territory, which is beneficial to this plan. If the plan fails, the price could rise to 139.95 as a return to the upper limit of the consolidation, but if it doesn't reverse from the level as a new attack on 138.60, then, as the price settles above 139.95, the currency might reach the 141.90 level.   Relevance up to 03:00 2022-11-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328383

USDJPY remains under pressure The Japanese yen fell after an uptick in October’s jobless rate. The rebound has met stiff selling pressure in the former demand zone around 142.40. A break below the recent low of 138.00 suggests that the path of least resistance remains down. As more buyers switch sides, increased volatility may drive the pair even lower. 135.90 is the next level to see if buyers would make their way back. Otherwise, the greenback could drift towards 132.00. The psychological level of 140.00 is the first hurdle in case of a bounce. Read next: Meta fined by Irish regulators amidst privacy concerns| FXMAG.COM AUDUSD seeks support The Australian dollar retreats after a lacklustre retail sales reading in October. The pair is looking to hold onto its gains above 0.6700 following a rally earlier this month. A bounce off 0.6580 next to the 20-day moving average indicates interest in safeguarding the aussie’s recovery. 0.6720 is a fresh resistance and a close above 0.6800 would open the door for an extension to September’s peak of 0.6910. On the downside, a dip below said support would put the bulls on the defensive with 0.6400 as a second line of defence. US 30 shows overextension The Dow Jones 30 slips as protests in China against Covid curbs raise concerns about growth. While a rally above August’s high of 34200 is an encouraging sign, the bulls would need to secure their foothold before pushing towards 34700. A bearish RSI divergence indicates a deceleration in the upward momentum and the index could use some breathing room. A slide below 34000 has led some buyers to take profit and 33650 is the next level to gauge their interest. Only a bounce above 34300 would resume the uptrend.

The yen is in positive territory for a second straight day. In the North American session, USD/JPY is trading at 138.60, down 0.23%. Earlier, in the day the yen pushed below the 138 line but was unable to consolidate. The widespread protests in China over the country’s zero-Covid policy has unnerved investors, as the unrest is expected to worsen supply chain disruptions and chill domestic spending. The Chinese government has cracked down on the protests, and won’t be easing up on its covid policy until the number of cases drops sharply. The protests have dampened risk appetite and the Japanese yen, a traditional safe-haven, has posted modest gains. Read next: FxPro's Alex Kuptsikevich: It is unlikely that the Fed would take this step. Monetary policy operates with a lag of about half a year | FXMAG.COM The Federal Reserve continues to telegraph a hawkish message to the markets, with the Fed’s meeting two weeks away. Fed member Bullard said on Monday that the markets are underestimating the Fed, adding that the terminal rate could be in the range of 5%-7%. The markets aren’t buying into that forecast, as they have priced the terminal rate at about 5%. The Fed has been signalling that it will raise rates at the December meeting by 50 basis points, but the markets aren’t entirely convinced. The likelihood of a 50-bp move has fallen to 67%, with a 33% chance of a 75-bp move. Just two weeks ago, the ratio was 80-20 in favour of a 50-bp hike. The markets are hunting for clues about the Fed’s plans, and will be listening carefully to Jerome Powell, who is expected to touch on inflation in a speech on Wednesday. Japan’s retail sales for October slowed to 4.3%, down from an upwardly revised 4.8%. This missed the consensus of 5.0%, but retail sales have now recorded gains since March, when Japan began easing border restrictions as Covid cases subsided. USD/JPY Technical There is resistance at 139.82 and 141.58 USD/JPY is testing support at 138.62. Below, there is support at 137.39 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Yen extends gains - MarketPulseMarketPulse

The dollar-yen pair is passing the time for the second straight session in anticipation of a strong impulse. It can happen right now. The Fed chief's speech should persuade the pair to turn around. The dollar index tested a weekly high on Wednesday during Asian trading before dropping 0.13% to 106.7. The US dollar continues to sway back and forth as market uncertainty about the likelihood of US interest rate increases is out of this world. Recall that the Fed launched the most ferocious anti-inflation campaign of any central bank this year. This helped the greenback to strengthen significantly against its main competitors. It rose to 114.78 in September, marking a 20-year high. The latest report on US inflation turned out to be weaker than anticipated. As a result, increased expectations that the Fed may slightly slacken its monetary rate have caused the dollar to drop twice to 105 since the middle of this month. This week, the market's mood has once again changed. Recent remarks by Fed officials have caused traders to question whether the US is winning the war against rising prices. John Williams, the president of the Federal Reserve Bank of New York, stated on Monday that the central bank must tighten monetary policy more quickly. James Bullard, a colleague from St. Louis, emphasized that interest rates will increase even more the following year. Due to these positive remarks, a rate increase in December is now much more likely by 75 basis points. Although only a few people believed it a few weeks ago, traders now estimate it to be 37%. The dollar, which appeared to have reached the peak of its bullish potential, was revived by escalating hawkish market expectations. The dollar has been able to strengthen recently in nearly all key areas, but not simultaneously with the JPY. The yen, which has suffered more than other currencies this year due to a sharp rate hike in America, is currently holding on to its last hope that the Fed will soon adopt less hawkish policies with all its might. The "Japanese" gained more than 7% against the dollar this month thanks to speculation about a potential slowdown in American rate increases. The yen was knocked back to earth this week by the most recent remarks made by Fed officials, which slowed the sharp recovery. The USD/JPY pair is currently frozen in anticipation of a clearer signal that should shed light on the future dynamics of interest rates in America. The pair is trading in a very small price range of 138–139. In the opinion of many analysts, Jerome Powell's speech today should be a significant catalyst for the dollar-yen asset. His first public appearance since the FOMC meeting in November will be this one. Dollar bulls anticipate that J. Powell, the head of the US Central Bank, will ride this wave, given that his colleagues this week expressed hawkish views. If the Fed chief emphasizes the need for additional aggressive tightening or makes another hint at a higher level of final rates, the dollar will soar if this happens. In this case, the yen is unlikely to be able to maintain its current levels and will probably give up the positions it has worked so hard to gain. There is, of course, another scenario that, on the other hand, might cause another weakening of the dollar. The dollar is unlikely to hold up if traders interpret J. Powell's recent statements as more dovish, especially compared to the yen. Analysts believe that the USD/JPY asset will become more volatile in the near future. Whatever the Federal Reserve chairman says today will drastically impact the market. The dollar-yen asset could still weaken further, according to UOB analysts' technical analysis of the USD/JPY pair, but they also point out that its downward momentum has slowed. According to experts, we are currently observing a strong oversold major, which suggests that a decline to the next support at the level of 137.00 is unlikely. Only if the USD/JPY pair breaks through at roughly 139.60, regarded as a strong resistance level, will the dollar's bearish momentum finally end.     search   g_translate     Relevance up to 07:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/328544

Early in the Asian session, the Japanese Yen is trading around 136.68. We can see on the 4-hour chart that USD/JPY remains trading within a downtrend channel which has been unfolding since November 17. In the American session, the USD/JPY pair reached the top of the downtrend channel around 139.88. As it failed to break this strong resistance, due to the fact that a symmetrical triangle formation also converges at that same level, the yen made a strong technical connection breaking the 21 SMA located at 138.54. The technical analysis with the fundamental analysis goes hand in hand. This can be verified because in the afternoon of the American session yesterday, the Chairman of the Federal Reserve, Jerome Powell, said that the US central bank could reduce the pace of interest rate hikes in December. This caused a fall in the dollar which benefited the Japanese Yen, gaining almost 300 pips in one day. In case there is a technical rebound around the support 136.50 or 135.93 in the next few hours, we could expect a technical correction towards the 21 SMA located at 138.54. On the other hand, if USD/JPY finds support at -1/8 Murray around 135.93, this level will serve as the key due to the fact that it is a zone of technical reversal. It is likely that it will give us an opportunity to buy, with targets at 0/8 Murray located at 137.90 and at the top of the downtrend channel around 139.06. The eagle indicator could find strong support around the uptrend channel, which could be a signal to buy the Japanese Yen in the coming hours. Our trading plan for the next few hours is to buy the Japanese Yen around 136.50, with targets at 137.50 and 138.54. Additionally, we can buy if JPY/USD consolidates around 135.93 (-1/8 Murray) with targets at 137.50 and 139.06. Relevance up to 03:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303274

The yen continues to move according to our main scenario. Yesterday, the price almost touched one of the embedded price channel lines and fell sharply, closing the day at 138.65. In today's Asian session, the price crossed the support at 137.00 and now it intends to go lower, to the target level of 135.23. I am waiting for the price convergence with the Marlin oscillator (the dashed line on the chart). The price may also cross 135.23 and there might not be a convergence, but that would require a collapse in the stock market. Surely it can happen, but so far there are no clear technical conditions for that. So let us not get ahead of the situation and just wait for the USD/JPY to test 135.23. On the four-hour chart, the price has not yet settled below 137.00. There could be a convergence with the Marlin oscillator. Or it may not happen (if the pair falls according to the main scenario), but it might settle before the release of tomorrow's US employment report.     Relevance up to 03:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328652

Powell said that the Federal Reserve (Fed) will slow down the pace of rate hikes from next month, while insisting that smaller increases are less important than how much further to go and for how long. But all investors heard was ‘the Fed will hike by 50bp next month and bla bla bla…’ US yields and the dollar fell, equities rallied!!! Forex The US dollar’s depreciation is being cheered across the market. The EURUSD pushed above the 200-DMA as the dollar-yen fell to 136.50.And if Japan doesn’t need to spend its FX reserves to strengthen the back of the yen, they could well use it to increase the defense spending, without increasing taxes and without cutting spending. Japan And Japan is not the only country that increases defense spending. Bigger global budget for spending boosts defense stocks! Commodities In commodities, American crude rallied past the $81pb yesterday as US crude oil inventories fell by 12.6 million barrels last week, well above the 3.2 million barrel draw expected by analysts. It is because exports ran hot, and refineries hit their highest capacity since August 2019. But be careful with the rising recession odds, because investors have been cutting their net speculative positions despite the supply concerns, and that’s probably going to limit the topside potential! Watch the full episode to find out more! 0:00 Intro 0:28 Investors don’t want to hear what Powell tries to say! 3:49 FX & data roundup 6:50 Defense stocks to continue outperform 7:56 Crude oil jumps but positive potential is limited Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Powell #speech #USD #economic #data #ADP #JOLTS #GDP #NFP #unemployment #EUR #inflation #TTF #natgas #crudeoil #defense #stocks #Themes #trading #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

Summary:  Fed Chair Powell’s speech on the economy, inflation and the labor market yesterday only confirmed the market’s forward expectations for Fed policy. The lack of notable pushback from Powell on the market’s pricing of eventual Fed easing saw equity markets in a celebratory squeeze and the USD taken down a few notches as weak data prior to his speech added to the reaction and the drop in US treasury yields. But now that we have the binary reaction, cue the incoming data. Today's Saxo Market Call podcastToday's Market Quick Take from the Saxo Strategy TeamFX Trading focus: USD dumped on Fed Chair Powell speech, but cue the incoming data. Fed Chair Powell failed to deliver the kind of pushback against easy financial conditions that many had the right to expect in his speech yesterday, as the policy guidance was rather light in the speech. Most of the speech centered on a discussion of inflationary risks and where the Fed felt comfortable with the trajectory and outlook, and where it felt less certain, which was especially notable in the labor market/wage dynamics. The heart of the speech discussed the likely permanent reduction in the potential labor force due to older workers leaving the work force during the pandemic and the uncertainty of how quickly the wage pressures would ease. Near the end of the speech, Powell said “Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level. It is likely that restoring price stability will require holding policy at a restrictive level for some time.” The lack of certainty and Powell suggesting it may be appropriate to reduce the size of Fed hikes to 50 basis points at the December FOMC meeting emboldened the market. The question is whether the very “binary” interpretation of his speech will feed a new extended sell-off in the US dollar, as incoming data could quickly reject the narrative. Soft US data added to the reaction function yesterday and helped US yields lower all along the curve, although this did not unfold until the market had a look at what the Fed Chair had to say. The November Chicago PMI plunged to a scary 37.2 (vs. 47 expected and 45.0 in October) and the November ADP private payrolls change were out at a 21-month low of +127k vs. the +200k expected. Today’s key event risk is the core month-on-month PCE inflation print, expected at +0.3% MoM and 5.0% year-on-year. Any upside surprise would sit very poorly with yesterday’s reaction, as would a stronger than expected November jobs and/or earnings data tomorrow. Chart: USDJPYUSDJPY plunged down through the 137.50 area recent pivot low yesterday in the wake of Fed Chair Powell’s speech as US yields dropped all along the curve, with the US 10-year benchmark yield hitting 3.60%, a new local low ahead of the important 3.50%. The 200-day moving average, currently near 134.50 and rising rapidly, is zooming into view and will be a key test that might be hard to break unless US yields continue lower, which will be far more down to incoming data in coming weeks. The pain trade across markets now will be either a) stronger than expected US data and/or b) more inflationary data regardless of the strength in the real economy (that would require the Fed to remain higher for longer and for the market to eventually reset forward inflation expectations). Also watch global energy prices, a second source of vulnerability for the JPY due to its import of nearly all energy supplies. Some BoJ member jaw-boning overnight on an eventual policy shift also helping the JPY at the margin. Source: Saxo Group Not a big focus for traders, but EURSEK is still up in the high part of the range despite what has normally been a supportive backdrop for SEK (the historic SEK sensitivity to risk sentiment). Why? Likely, as the market shields its eyes at the implications of the rate hike cycle into the Swedish domestic economy on the one hand. We recently saw that staggering 7.7% drop in real volumes of Retail Sales for October and the country’s consumers have yet to feel the brunt of higher mortgage payments as the impact on discretionary spending mounts in coming months (well over half of mortgages taken out in 2020-21 were on floating rates of a year or less). As well, European PMIs are weak and are unlikely to pick up significantly as long as energy prices remain an issue, with the Swedish economy traditionally leveraged to the EU economy. The Swedish November Manufacturing PMI was also out this morning and hit a new cycle low at 45.8. Table: FX Board of G10 and CNH trend evolution and strength.The US dollar down-trend re-intensified yesterday after Fed Chair Powell’s speech, with the USD breaking to new cycle lows in places, but will the incoming data continue to support both risk on and lower US yields, the ideal combination for USD bears? Elsewhere, note the NZD continuing its remarkable run while the JPY has perked up as a function of falling US treasury yields. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.AUDNZD hits new cycle lows today as the market may be fretting RBA dragging its heels on rate tightening more than the supportive news out of China on the trend toward reopening. If there is a pair ripe for mean reversion on the one-month time frame or less, it might be NZDCAD, the trending outlier in absolute value terms. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights 1230 – US Nov. Challenger Job Cuts 1330 – US Oct. PCE Inflation 1330 – US Weekly Initial Jobless Claims 1420 – US Fed’s Logan (Voter 2023) to speak 1500 – US Nov. ISM Manufacturing 1645 – ECB Chief Economist Lane to speak   Source: https://www.home.saxo/content/articles/forex/fx-update-usd-bears-celebrate-lack-of-powell-pushback-01122022

Last Friday, the USD/JPY pair fell by 104 points, and so the pair did not reach the target level of 133.10 that was set by the embedded line of the price channel. Now the price has two options: to continue working on the support or to move up from the current levels in a correction in order to reach the target resistance level of 135.2, or to 137.00, and turn around to 133.10, but with an attempt to cross it and fall to 130.41. This level coincides with the August 2 low. A price convergence with the Marlin oscillator in this form, unfortunately, does not provide any advantage to any of the scenarios so it can remain at 133.10 from the current levels. On the four-hour chart, the price settles under the level of 135.25. The Marlin oscillator is rising, but it is still in the negative territory. In order for the price to continue rising, it needs to settle above 135.25. By that time Marlin will be in the positive territory. Resistance at 137.00 is reinforced by the MACD indicator line, so the fate of the decline from October 21 may be decided here Relevance up to 03:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328910

The situation of currency pairs is affected by macroeconomic and political events. In the Asian market, developments in China, which has recently been struggling with an increase in coronavirus infections, are of particular importance. December is particularly important because the last decisions regarding interest rates will be made this year, which will affect the forex market.   Decreased winter fears may support the euro. The looming recession in the UK is starting to take its toll on the pound. The Aussie awaiting RBA decision Positive Japan services PMI   EUR/USD The EUR/USD pair is at its highest level in months. The upward trend in recent weeks has been strong. ING FX experts remain bearish on the euro/dollar exchange rate until the end of the year, but there are experts who believe that the exchange rate will continue its upward move. It is worth paying attention to the readings of PMI indices for services that will be released today from many countries and the already mentioned ISM data from the US. Today's readings for the EU were weaker than expected, but it seems that the market is waiting for the release of the US report. The news related to energy issues in the euro zone may be loud this week. The price cap of the G7 is $60. per barrel, and Urals oil is traded at $10. below this ceiling. Moscow has already announced that it prefers to limit production rather than sell at a fixed price. However, the reduction of fears related to a possible frosty winter may support the euro exchange rate.   Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM   GBP/USD The pound/dollar exchange rate increased its gains in November. The recent rebound in the pound/dollar (GBP/USD) has regained momentum, but Monday morning brings some break to the rally. The final service PMI reading for November published today was in line with expectations (48.8). More and more serious opinions announcing a more significant and prolonged recession in the British economy may start to show up in the pound's quotations. Especially that the market will also price in scenarios regarding the decision of the Bank of England on the level of interest rates. The Bank of England will decide next week's rate on Thursday (December 15), the same day as the ECB and a day later than the Federal Reserve (December 14).   AUD/USD AUD/USD refreshed to a seven-week high above 0.6850. Now turned down, sentiment remains bearish. The AUD/USD exchange rate is susceptible to the economic situation in the US and Australia. The situation in China is of great importance for the strength of the Australian dollar. Announcement of easing covid restrictions in China may support the situation of the Australian dollar. Markets are expecting the Reserve Bank of Australia to keep the cash rate on hold at 2.85% after inflation slowed sharply in October. The RBA will be deciding on rates tomorrow. The market is pretty much 50/50 on a 25 bp bump up.   Read next: Chinese And European Services PMIs Fell| FXMAG.COM   USD/JPY USD/JPY bearish movement developed and the currency pair is moving to its lowest level since August. The USD/JPY pair is very liquid as both currencies are among the top reserve currencies in the world. As with other major currency pairs, USD/JPY can also be sensitive to macroeconomic data from the US and Japan. Today's reading for PMI services in Japan was optimistic.   Source: finance.yahoo.com, investing.com,

Summary:  "Japan’s real GDP drops by 8 percent." - John J. Hardy. Japan mobilised hundreds of billions of USD in its currency reserves in 2020 to defend the Bank of Japan’s (BoJ) unmoved monetary policy and the JPY itself as the BoJ refused to hike the policy rate from -0.1 percent or to lift the yield cap on 10-year Japanese government bonds at 0.25 percent. As 2022 rolls into 2023, the pressure on the JPY and the Japanese financial system mounts again on the global liquidity crisis set in motion by the vicious Fed policy tightening and higher US treasury yields.   Initially, the BoJ and Ministry of Finance deal with the situation by slowing and then halting currency intervention after recognising the existential threat to the country’s finances after burning through more than half of central bank reserves. But as USDJPY rises through 160 and 170 and the public outcry against soaring inflation reaches fever pitch, they know that the crisis requires bold new action. With USDJPY soaring beyond 180, the government and central bank swing into motion.   First, they declare a floor on the JPY at 200 in USDJPY, announcing that this will only be a temporary action of unknown duration to allow for a reset of the Japanese financial system. That reset includes the BoJ moving to explicitly monetise all  its debt holdings, erasing them from existence. QE with monetization is extended to further lower the burden of Japan’s public debt, but with a pre-set taper plan over the next 18 months. The move puts the public debt on course to fall to 100 percent of GDP at the end of the BoJ operations, less than half its starting point. The BoJ policy rate is then hiked to 1.00 percent and all yield-curve control is lifted, which allows the 10-year rate to jump to 2.00 percent.   Banks are recapitalised as needed to avoid insolvency and tax incentives for repatriating the enormous Japanese savings held abroad see trillions of yen returning to Japanese shores, also as Japanese exports continue to boom. Japan’s real GDP drops by 8 percent on reduced purchasing power even as nominal GDP rises 5 percent due to cost of living increases, but the reset puts Japan back on a stable path and establishes a tempting crisis-response model for a similar crisis inevitably set to hit Europe and even the US eventually.   Market impact: USDJPY trades to 200 but is well on its way lower by the end of the year.    Source: Japan pegs USDJPY at 200 - Saxo Outrageous Prediction | Saxo Group (home.saxo)

Stocks fell and the US dollar strengthened on Monday on a stronger than expected ISM services read in the US, which came in above expectations, and hinted that the economic activity, at least in the US services sector continues growing, and growing un-ideally faster-than-expected despite the Federal Reserve’s (Fed) efforts to cool it down. The Aussie In the FX, the Aussie was slightly better bid after the Reserve Bank of Australia (RBA) raised its rates by another 25bp today, and took the rates to levels last seen a decade ago. EUR/USD and GBP/USD But elsewhere, the US dollar strengthened as a result of the hawkish Fed rectification. The dollar index first eased to a fresh low since June, then rebounded. It has way to recover above its 200-DMA, which may mean that some majors, including EURUSD and Cable could return below their 200-DMA as well. Yet, even if we see rebounds in the US dollar, the medium to long term direction of the dollar will likely be the south in the coming months. The EURUSD could recover to 1.10, Cable to 1.30. USD/JPY More stretched… Vontobel sees the USDJPY’s fair value at 100, and Standard Chartered predict Bitcoin could fall another 70%, and spur a 30% rally in gold! Watch the full episode to find out more! 0:00 Intro 0:25 Fed hawks are back 3:07 S&P500 could further fall 4:40 Selling USD rallies sounds like a plan 8:22 A 70% fall in Bitcoin could spur a 30% rally in gold?! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #economic #data #Fed #expectations #USD #EUR #GBP #JPY #XAU #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

Summary:  Today we are announcing our newly released 2023 Outrageous Predictions highlighting improbable, but not impossible, events that could really shake the markets. We discuss the reversal in S&P 500 futures to the big 4,000 level driven by a surprise beat on ISM Services Index yesterday suggesting that the US economy is reaccelerating again. The US yield move higher yesterday is also setting the stage for our attention on USDJPY in today's FX focus. On commodities our focus today is on the oil market given the demand uncertainties over China's reopening and supply worries over the Russian oil price cap. Today's pod features Peter Garnry on equities, Ole S. Hansen on commodities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-dec-6-2022-06122022

The USD/JPY pair continues to develop the correction of the last two days. Yesterday, faced with the nearest resistance of the embedded line of the price channel of the higher chart (137.00), the price only grew by 28 pips. The price and the Marlin oscillator have formed a convergence, the pair may rise further. The nearest target is the line at 138.65. If it penetrates this level, the price might go up to 140.05. A little above this second target is the level of 140.35, which is the low of September 22. Maybe, the price will try to reach it as well. On the four-hour chart, the price went above the MACD line, even with a slight consolidation. The Marlin oscillator is in the positive area. The short-term trend is increasing, we wait for the price to reach the nearest level at 138.65.   Relevance up to 03:00 2022-12-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329136

With USD/JPY stuck at the level of the Fair Value Gap area (Pink Box) on the daily chart, now the main currency pair has the potential to depreciate to the 133.63 level as the main target and the 131.78 level as the second target, suddenly USD/JPY corrected upwards to exceed the level of 142.25 where this has been confirmed by a deviation between price movements and the CCI indicator, the downward scenario described earlier will cancel itself.   Relevance up to 04:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115291

Further comments crossing the wires from Bank of Japan (BoJ) Board Member Toyoaki  Nakamura, as he continues to speak about the inflation and monetary policy outlook.   Key to future policy will depend on whether inflation will rise sustainably. Not convinced yet whether consumer inflation will exceed 2% in fiscal 2023 onward. Rate of wage increase in next year's spring wage negotiations alone won't lead to policy tweak debate. Don't see need to change current monetary policy framework now.   Market reaction USD/JPY was last seen trading at 137.52, accelerating its advance on the dovish BoJ comments. The spot is up 0.35% on the day.

USD/JPY picks up bids to refresh intraday high around 137.60 during early Wednesday in Europe. In doing so, the Yen pair portrays the market’s risk-on mood amid a light calendar. However, the options market signals are in contrast with the USD/JPY price run-up. That said, the one-month risk reversal (RR) for the Yen pair, the ratio between call and put premiums, braces for the biggest weekly print in three by flashing -0.325 at the latest. In doing so, the weekly RR drops for the third consecutive week. Further, the daily RR snaps a two-day uptrend by printing the -0.435 figure at the latest. It’s worth noting that China’s announcement of the new Covid policy appeared to have triggered the latest risk-on mood. Also favoring the USD/JPY could be the comments from various policymakers at the Bank of Japan (BOJ). Recently, BOJ Board Member Toyoaki Nakamura said that it is ‘premature to tweak monetary policy now as service prices remain low. Also read: USD/JPY Price Analysis: Retreats from monthly resistance around 137.00  

The USD/JPY pair plummeted in November, which made many question its bullish potential. However, the dollar's recent growth convinces investors otherwise. So what to expect from the major? The dollar is winning so far The greenback rose 0.3% against its major peers on Wednesday night. The dollar was supported by rising concerns about the global recession. The day before, three leading U.S. banks - J.P. Morgan, Goldman Sachs and The Bank of America - said they expect a slowdown in global economic growth next year, as rising inflation is threatening consumer demand. The pessimistic outlook reinforced the anti-risk sentiment that prevailed for the third consecutive session. The MSCI All-Country World Index, which tracks stock market performance in 48 countries, fell 1.26%, down from a three-month high last week. The loss of appetite for equities and increased demand for the dollar was also triggered by strong US macrodata. Recall that earlier this week the Institute for Supply Management (ISM) said that economic activity in the services sector grew from 54.4 to 56.5 in November. The data followed Friday's report from the U.S. labor market, which also pleased dollar bulls. The nation's NonFarm Payroll employment rose more than forecast last month. The portion of optimistic data greatly strengthened the market's hawkish expectations for further monetary policy by the Federal Reserve. Currently, most traders expect the U.S. central bank to raise the rate by 50 bps next week. The probability of an increase by 75 bps is only 5%. However, talk of a higher peak in U.S. interest rates has returned to the market. Many investors believe the rate could reach 5.25% in 2023, whereas now it is in the 3.75-4% range. The hope that the Fed will continue to raise rates next year and keep them high for a long time acts as a very powerful trigger for the dollar at this point. This factor particularly helps the greenback against the yen. After USD/JPY plummeted to a 3-month low of 133.64 last week, it has now gained 3% and has managed to stay above 137. There aren't many new factors that can strongly influence the asset's dynamics now. In the coming days, investors will focus on two events: the US consumer price index for November and next week's Fed meeting. If investors see more robust inflation and hear hints of a higher peak in U.S. interest rates from U.S. officials, it will likely trigger a new wave of growth in the USD/JPY pair. What's in store for the USD/JPY next year? In November, the U.S. currency posted its worst monthly performance in 14 years against the yen. It fell by more than 7% due to fears that the US central bank is going to slow the pace of rate hikes. However, most currency strategists, recently surveyed by Reuters, believe that in the next few months, USD/JPY will be able to hold its annual growth, which amounted to 20%. The growing threat of recession in the U.S. and other countries should provide support to the dollar. In the backdrop of risk aversion, the greenback will once again feel a surge of strength, which will help it recover its recent losses on all fronts, even against the yen. "For now, the forces that have supported the USD this year remain valid, despite the recent correction lower. Other currencies do not look as attractive yet," said Athanasios Vamvakidis, head of G10 FX strategy at Bank of America. In the BofA baseline, the U.S. dollar will remain strong early next year and will only start a more sustained downward path after the Fed pauses. Despite the dollar's recent pullback, major currencies are not expected to recoup their 2022 losses against the USD until at least late 2023, the survey showed. Analysts estimate that the Japanese yen, down nearly 20% for the year and currently trading around 136.50 per dollar, was expected to change hands around 139.17, 136.17 and 132.67 per dollar over the next three, six and 12 months respectively.   Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/329168

The darkening economic outlook drove fresh safe-haven demand for the US Dollar on Wednesday. The US dollar changed little after some of America's biggest banks warned of an impending recession The Fed, Bank of England (BoE) and European Central Bank (ECB) will set interest rates next week and central bankers will enter a period of silence before meetings. Positive reports appeared in the euro zone. Policymakers enter a period of calm ahead of key meetings of the Bank of England, the Federal Reserve and the European Central Bank Australian Dollar is facing renewed pressure. BoJ board member Nakamura once again encouraged the JPY bears Read next: Euro: Is There A Broader Correction To Be Feared? Aussie Got Little Support From The RBA Decision | FXMAG.COM EUR/USD may be bearish? The EUR/USD pair trades close to 1,050. Any breakout lower than 1.045 will be considered bearish. Economists at ING note that the pair could move lower to 1.0400. The European currency is expected to closely follow the dynamics of the dollar, the impact of the energy crisis on the region and the divergence between the Fed and the ECB. Additionally, the markets' overestimation of the potential Fed policy reversal remains the sole driver of the pair's price action for now. There were further concerns about the impact of colder winter conditions, especially in the context of the still uncertain energy situation. Positive reports appeared in the euro zone. Employment rose slightly and the GDP Y/Y and GDP Q/Q readings turned out to be higher than expected. GDP Y/Y increased to 2.3% against the expected 2.1%, while GDP Q/Q increased by 0.1% to 0.3%. Speeches by members of the European Central Bank will also take place today, but they are not expected to have a significant impact on the euro exchange rate. GBP/USD holds gains above 1.2150 The GBP/USD pair is trading around 1.2190. The pound strengthened against the dollar on Wednesday to a nearly six-month high as policymakers enter a period of calm ahead of key meetings between the Bank of England, the Federal Reserve and the European Central Bank. There are no significant macroeconomic events for the pound today. The Bank of England raised interest rates from 0.1% to 3.0% in the current monetary policy tightening cycle, with markets pricing in an interest rate peak of around 4.6% next year. Economists predict the Bank of England will decide to raise interest rates by 50 basis points next Thursday. One BoE policymaker said higher interest rates could lead to a deeper and longer recession. Yesterday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1% The Australian dollar failed to hold its gains and it is facing renewed pressure after data showed that the Australian economy expanded less than expected in the third quarter. Annual GDP by the end of July was 5.9% instead of the expected 6.3% and the previous reading of 3.6% was revised down to 3.2%. Overall, national data show a strong economy. Yesterday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1%, taking borrowing costs to a level not seen in a decade, and further tightening is expected to bring down inflation. A board member of the Bank of Japan (BoJ) said that adjusting monetary policy would be premature The currency pair is trading around 137.3590. BoJ board member Nakamura once again encouraged the JPY bears with his statement. A board member of the Bank of Japan (BoJ) said that adjusting monetary policy would be premature. Source: dailyfx.com, investing.com, finance.yahoo.com

USD/JPY oscillates in a narrow trading band amid subdued trading action on Thursday. A combination of factors undermines the JPY and extends some support to the major. Bets for less aggressive Fed rate hikes keep the USD bulls on the defensive and cap gains. The USD/JPY pair lacks any firm directional bias and seesaws between tepid gains/minor losses through the early European session on Thursday. The pair, however, manages to hold its neck above the daily low and is currently placed around the 136.65-136.70 area, nearly unchanged for the day. The Japanese Yen is weighed down by the weaker domestic data, showing an unexpected current account deficit and an economic contraction during the third quarter. Apart from this, a goodish rebound in the US Treasury bond yields widens the US-Japan rate differential and further contributes to driving flows away from the JPY. This, in turn, assists the USD/JPY pair to attract some buying near the 136.25 region. The intraday uptick, however, lacks bullish conviction and runs out of steam near the 137.25 zone amid subdued US Dollar demand. Expectations that the Fed will slow the pace of its policy tightening cycle keeps the USD bulls on the defensive and caps the upside for the USD/JPY pair. That said, the incoming positive US macro data has been fueling speculations that the Fed might lift rates more than recently projected. This, in turn, holds back traders from placing aggressive bets around the USD/JPY pair and leads to a range-bound price action. Hence, the focus will remain glued to the upcoming FOMC policy meeting on December 13-14. Heading into the key central bank event risk, investors will confront the release of the latest US consumer inflation figures, which should influence the Fed's policy outlook and drive the USD demand. This, in turn, will help determine the next leg of a directional move for the USD/JPY pair. In the meantime, traders on Thursday will take cues from the release of the usual Weekly Initial Jobless Claims data from the US, due later during the early North American session. This, along with the US bond yields and the broader market risk sentiment, will be looked upon for short-term trading opportunities around the USD/JPY pair.

In today's Orbex Analysis Jing Ren talks Forex pairs - greenback versus yen, Loonie and WTI crude oil. USDJPY recoups some losses The Japanese yen rallies over better-than-expected GDP in Q3. The pair has found solid support at 134.20 near August’s lows. The latest rally is likely to be driven by sellers’ profit-taking, which means that it would be too soon to talk about a full-fledged recovery. 138.80 on the 20-day moving average is the first obstacle, and the bulls will need to clear the daily resistance at 141.50 before they could turn sentiment around. 136.00 is the first level to gauge the strength of buying interest in case of a pullback. USDCAD tests resistance The Canadian dollar struggles as the lack of forward guidance by the BoC hints at slower tightening. A break above the previous peak at 1.3640 has put the bears on the defensive. The RSI’s multiple entries in the overbought area showed exhaustion and led to a pullback as the price tested the support-turned-resistance of 1.3700. A breakout could pave the way for a bullish continuation above the November high of 1.3800. On the downside, 1.3580 is the closest support and 1.3400 a critical level to keep the recovery intact. Read next: BMW Was Fined 30,000 Pounds By CMA, Google Wants To Become More Productive| FXMAG.COM USOIL sees limited bounce WTI crude dips on an unexpected rise of US fuel stocks. A close below the previous low of 73.70 shows that the path of least resistance remains down. More traders may look to sell into strength as the commodity struggles to claw back losses. The RSI’s oversold condition may cause a limited rebound. Offers could be expected around the former support of 78.00. 82.50 is a major cap that is likely to keep the price under. A new round of selling would send the price to a 12-month low and at the psychological level of 70.00.

The euro stabilized against the US dollar on Thursday and the U.S. dollar clawed back some of the previous day's declines, as the market weighs in on the Fed's rate hike path. The euro benefited from the weakening of the US dollar The Australian dollar against the US currency fell sharply the 10-year Treasury note has fallen almost continuously EUR/USD was unable to overcome its late-June high EUR/USD hit a five-month high earlier this week but was unable to overcome its late-June high of 1.0615. The pair's mood remains bearish today. Compared to the previous day, the EUR/USD pair has fallen and is trading around 1.0469. The euro gained overnight after better-than-expected euro-wide GDP data showed an increase of 0.3% q/q in the third quarter instead of the expected 0.2%. This may indicate that the economic slowdown in Europe may not be as serious as previously feared. The European Central Bank will review its policy on 15 December. The broader weakness of the US dollar also helped strengthen the euro. GBP/USD The pound fell 0.3% against the dollar to $1.2175 and fell 0.35% against the euro. Sterling falls as falling UK house prices add to recession fears. The UK is facing a winter of strikes as rail workers, teachers and nurses demand better wages as the cost of living soared, exacerbated by rising energy costs after the Russian invasion of Ukraine. What's more, the prospects for next year are equally bleak. The UK economy could contract in the coming months. AUD/USD- commodity prices have a negative impact The Australian dollar against the US currency fell sharply this week. Currently, the pair is trading at mid-September levels. From The Australian Dollar (AUD) perspective, commodity prices have a negative impact on the currency coupled with yesterday's weaker GDP data. This morning started positively for the Australian dollar with a better-than-expected trade balance for October, but today the main focus will be on the US labor market data. If the reports turn out to be positive for the dollar, they will bring bears for the AUD/USD pair. Most recently, the Australian dollar got support from the easing of COVID restrictions in China, but that has since dissipated due to the rising number of COVID cases causing concern. The RBA's decision on interest rates also failed to support the Aussie. Overall, the current fundamental headwinds facing the AUD outweigh the US Dollar, which could suggest a potential downside risk for the Australian Dollar over the next few weeks. JPY is weaker The Japanese Yen is slightly weaker so far today despite GDP there narrowly beating forecasts. Annualised GDP was -.08% for the third quarter instead of -1.1% anticipated. The Japanese yen (JPY) which is highly sensitive to shifts in U.S. Treasury yields, fell 0.2% to 136.82. Instead the dollar-yen pair jumped. Currently, the pair is trading around 136.8130. The yield on the 10-year Treasury note has fallen almost continuously since hitting a 15-year high in late October. The Bank of Japan's ultra-loose monetary policy at a time when other central banks around the world are aggressively raising interest rates has made the yen the weakest major currency in the world in recent months. As a result, the USD/JPY exchange rate increased. However, according to some experts, the yen may rise against the US dollar next year. Source: finance.yahoo.com, dailyfx.com, investing.com

The yen was happy that the dollar weakened in yesterday's European session and this morning it went on to rise further. The Japanese currency, however, has a difficult task to overcome the convergence pressure with the Marlin oscillator on the daily chart. It might result in two things, which is crossing the target support at 133.25 and a double convergence. On the four-hour chart, the price started to fall from the MACD line. Now the price is crossing the support of the balance line, and Marlin is already in negative territory. Signals have synchronized, we are waiting for the development of the downward movement. The target is 133.25. Relevance up to 03:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329360

USD/JPY drifts lower on Friday amid heavy follow-through selling around the USD. Bets for less aggressive Fed rate hikes, depressed US bond yields weigh on the buck. Traders, however, seem reluctant ahead of next week’s key US data/FOMC meeting. The USD/JPY pair comes under fresh selling pressure on the last day of the week and drops to a multi-day low, albeit lacks follow-through. The pair trims a part of its intraday losses and trades around the 136.25-136.30 region during the early European session, still down over 0.25% for the day. The US Dollar prolongs its steady descent for the third successive day amid firming expectations for a less aggressive policy tightening by the Fed, which, in turn, is seen weighing on the USD/JPY pair. In fact, the markets seem convinced that the US central bank will slow the pace of its rate-hiking cycle and have been pricing in a 50 bps lift-off in December. The prospects for a relatively smaller rate hike contributes to the ongoing decline in the US Treasury bond yields. This, in turn, results in the narrowing of the US-Japan rate differential, which benefits the Japanese Yen and exerts additional downward pressure on the USD/JPY pair. The downside, meanwhile, seems limited, warranting caution for bearish traders. The incoming positive economic data from the United States has been fueling speculations that the US central bank might lift interest rates more than estimates. This might hold back traders from placing aggressive bearish bets around the USD and offer some support to the USD/JPY pair ahead of next week's key US macro data and the central bank event risk. The market focus remains on the highly-anticipated FOMC policy meeting on December 13-14. Moreover, the latest US consumer inflation figures are also scheduled for release next Wednesday, which will influence the Fed's policy outlook. This, in turn, will play a key role in driving the USD in the near term and provide a fresh directional impetus to the USD/JPY pair. In the meantime, traders on Friday will take cues from the US economic docket, featuring the release of the Producer Price Index (PPI) and the Prelim Michigan Consumer Sentiment Index. This, along with the US bond yields, could provide some impetus to the USD. Apart from this, the broader risk sentiment might produce some trading opportunities around the USD/JPY pair.  

The bearish trend in USD/JPY broke as soon as the quotes hit 136. However, after a sharp rise, the pair went back to the 50% retracement level. The current situation presents a great opportunity to open long positions, especially since there is a three-wave pattern, in which wave A represents the bullish pressure this week. This means that traders can enter the market by buying from the 50% retracement level or from a false breakdown of 136, then set stop-loss at 134 or after the false breakout of 136. Exit by taking profit upon a breakout around 138.0 and 142.5. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks. Relevance up to 05:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329366

By the end of the week, the dollar was under pressure from negative sentiment about the future prospects of the U.S. economy. This led to a sharp fall on many fronts. USD/JPY was no exception On Friday morning, USD/JPY plummeted by 0.6% and dropped below the 136 level. The reason for the sharp decline was the general weakness of the greenback. The DXY index fell more than 0.5% at the start of the day. The ground was knocked out from under the dollar's feet by increased fears of recession in the United States. Weaker-than-expected US economic data contributed to the growth of speculations on the subject. A report from the Labor Department released yesterday showed that initial claims for state unemployment benefits increased more than forecast to 230,000 over the week, while the number of people receiving benefits after an initial week of aid jumped to a 10-month high of 1.671 million. The fact that unemployment remained steady reinforced the market's view of the unenviable prospects for the world's largest economy. America could enter recession as soon as next year. Another harbinger of a negative scenario is the inversion of the U.S. Treasury bond yield curve. Now the gap between the yield of 2-year and 10-year bonds is -83.7 bps. Given all these factors, investors are concerned that the growing risk of a slowdown in economic growth may force the Federal Reserve to soften its monetary policy. Currently, traders estimate the probability that the Fed will raise rates by 50 bps in December at 93%. At the same time, most market participants believe that the rate will peak at just below 5% next May. Less hawkish market expectations significantly weigh on the U.S. currency. Against this backdrop, the dollar index has already lost more than 8% from its 20-year high reached in September. Recall that this year's peak for the greenback was 114.78. The USD is now trading just above 104. The dollar suffered the heaviest losses last month against the yen, which, on the contrary, showed the worst dynamics among the Group of 10 currencies throughout the year. The JPY gained more than 7% against the greenback in November. The key catalyst was an increase in speculations about a slowdown in U.S. rate hikes, which led to a sharp collapse in U.S. Treasury bond yields. The Japanese currency is extremely sensitive to changes in this indicator. Its significant dynamics always provokes equally strong movement of the yen. At the moment, the yield of 10-year US government bonds is keeping its growth above 3.48%, which creates an obstacle for further strengthening of the JPY. The US Consumer Price Index for November is expected to provide strong support to the yields. The report will be released next week, ahead of the Fed's interest rate decision. Economists estimate that overall inflation will remain unchanged at 7.7%. If the forecast comes true and we do see a more robust figure, it could change the mood of the market considerably. It is likely to bring back talk of a higher final level of interest rates in America and a continuation of an aggressive anti-inflation campaign. Analysts at Danske Bank see a further hike in interest rates by 50 basis points (bps) and a hawkish message from Federal Reserve chair Jerome Powell for CY2023. Also, the neutral rate is expected at 5.00-5.25%. Experts think that the steady rise in prices is the only chance for the dollar to hold out next week where in addition to the Fed meeting, the interest rate decisions of the ECB and Bank of England are also expected. As for USD/JPY, it is likely to remain in a consolidation phase until U.S. consumer inflation data is released. Most analysts predict that the pair will trade in a narrow price range of 136-137 in the short term. However, strong volatility in the asset is expected after the release of the key report. Depending on the data, dollar-yen might show either a strong upward bounce or a sharp retreat to the downside. The next potential trigger for the pair is the Fed's decision on the interest rate, which will be announced on Wednesday, December 14. Technical analysis of the USD/JPY pair The fall below the neckline, built from the December 6 low at 135.96, put a lot of pressure on the USD this morning. In addition, the USD/JPY asset failed to stay above the 200-period exponential moving average at 137.10, which also indicates the strength of the Japanese yen. Meanwhile, the RSI relative strength index has shifted into a bearish range of 20.00-40.00, indicating the start of downward momentum. In order to fall further, bears need to pull the pair below Friday's low of 135.77. This would take the pair to round support at 135.00, followed by the December 5 low of 134.13. On the other hand, a break above the 200-EMA near 137.00 would open a quick path to Wednesday's high at 137.86. A takeover there would send dollar bulls to the November 25 high of 139.60.   Relevance up to 08:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/329392

The dollar was broadly flat against major currencies on Friday as concerns about the health of the US economy resurfaced, as well as ahead of producer inflation data later in the day and the Federal Reserve's interest rate meeting next week Investors are expecting a series of interest rate decisions from central banks - including the Fed, the European Central Bank and the Bank of England - next week. Markets bet all three will limit pace of rate hikes, with hikes of 0.5bp The dollar index continued its decline yesterday keeping the Euro bulls on the front foot. The GBP/USD pair is rising for the third day in a row. The yen benefiting from growing expectations AUD/USD tried to regain ground today Read next: The FTC Is Trying To Block Microsoft's Merger With Activision| FXMAG.COM EUR/USD EUR/USD continues its grind higher in early European trade as key US data events lie ahead. The euro/dollar pair is trading in a better position than yesterday. This morning the euro rose 0.25% is $1.0581. The pair is currently trading at 1.0513. The dollar has a tendency for weakness in December. The dollar index continued its decline yesterday keeping the Euro bulls on the front foot. There has been comments this week from some ECB members discussing the possibility of further rate hikes. Later in the day attention turns to the US economic calendar as we await the US PPI as well as University of Michigan data. A positive data print could offer some support for the dollar while a weaker print could push EUR/USD lower. As for the US PPI, it is expected to maintain its previous level of -0.2%. A University of Michigan date specifically Michigan Consumer Sentiment is important, it is expected to increase by 0.1 to reach 56.9. GBP/USD GBP/USD Pair is on the buyers radar today. The GBP/USD pair is rising for the third day in a row and steadily climbing to the upper end of its weekly range. The pair points to a well-established short-term uptrend. A combination of factors is bringing the US dollar back to near the multi-month low reached earlier in the week. The Bank of England set to announce its monetary policy decision next week, with another interest rate increase of 50 basis points expected. It also can impact on the pound. Moreover, the gloomy outlook for the UK economy may keep investors from betting aggressively around the British pound and limit the GBP/USD pair, at least for now. Investors are now looking at Friday's US economic breakdown, which will release the Producer Price Index and flash Michigan Consumer Sentiment Index. This, along with US bond yields and broader risk sentiment, could influence USD price dynamics and provide some impulse for the cable market. AUD/USD AUD/USD tried to regain ground today China’s loosening Covid restrictions also lent optimism to the market, though renewed global recession fears and uncertainty around US Federal Reserve policy tightening kept sentiment in check. Meanwhile, latest data showed that Australia’s economy expanded less than expected in the third quarter as persistent inflation and rising interest rates dampened domestic consumption. The Reserve Bank of Australia raised its policy rate by 25 basis points to 3.1% at its December meeting. USD/JPY Currently, the pair is trading at 134.4750. On the daily chart, you can see that the dollar against the Japanese yen is falling. The recent weakness of the dollar affects the pair's advantage. The Japanese yen appreciated to around 136 per dollar, heading back to its highest levels. Also the yen benefiting from growing expectations that the Bank of Japan could end its ultra-easy monetary policy with inflation around 40-year highs. Source: investing.com, dailyfx.com, finance.yahoo.com

Next week we will have another powerful breakthrough in this respect: besides the release of important reports, 4 major world central banks (USA, Switzerland, UK and eurozone) will announce their decisions on monetary policies. The dollar may strengthen again. A strong US economy and aggressive interest rate hikes are strong assets for the US dollar, but not the only ones. The USD index rose as a result of strong demand for safe assets at a time when fear dominated the markets. A deep recession would increase the demand for the US dollar as a safe-haven asset. Read next:The Fed And Slowing Down The Pace Of Rate Hikes On Last Meeting This Year?| FXMAG.COM EUR/USD This week the pair started at 1.0545. This level was followed by a weekly high of 1.0585. On Wednesday, the pair met the expectations of ING economists and moved around 1.0400, thus reaching the lowest levels of the week at 1.0452. The mood was gloomy and the bulls had challenges ahead. The pair gradually recovered from losses and returned to trading above 1.0500. Currently, the pair is trading at 1.0572 There were no economic events during the week that could significantly affect the currency pair. On Wednesday, the euro received support from the eurozone as the domestic gross production reading was higher than expected. Moreover, the weak us dollar during the week added strength to EUR/USD. EUR/USD price movement will depend on the Federal Reserve and the European Central Bank. Next week the central banks will sum up the year results and outline further prospects. EUR/USD Weekly Chart GBP/USD The cable market started the week well at 1.2295. On the same day, GBP/USD hit its highest level of the week, trading at 1.2336. Tuesday and Wednesday were the weakest days for the couple. Just like EUR/USD, the pound/dollar also hit a low on Wednesday, dropping to 1.2107. After that, the pair rose and recorded a correction. Currently, the price of the pair is at 1.2239. This week has been empty in terms of reports. The movement of the pair was influenced mainly by the situation of the dollar. Next week brings a lot of emotions among traders. British reports will open in the coming week with data on industrial production and GDP for October. This report presents aggregated economic data and will have a major impact on the Bank of England's monetary policy decision (Thursday). GBP/USD Weekly Chart AUD/USD The pair of Australian dollar (AUD/USD) started the week at 0.6799. Like the British pound, the Aussie hit a weekly high on Monday. The highest price level was 0.6848. Then the pair began to wane. Following the trend of currencies from the old continent, Wednesday was the lowest level of the pair, 0.6672. And just like the pairs above, AUD/USD tried to recover. The pair closed the week at 0.6772. China's announcement of easing covid restrictions added support to the Australian dollar. On Tuesday, the Reserve Bank of Australia recently raised its key interest rate by 25 basis points to 3.1%, but the bank's decision did not add strong support to the AUD price. AUS/USD Weekly Chart USD/JPY USD/JPY started the week at a low of 134.4900, on the same day it recorded a weekly low of 134.1300. The upward trend continued until Wednesday. On that day, the Japanese yen pair peaked at 137.8010. There were declines after that. The week ended with USD/JPY at 135.0740 Undoubtedly, the weakness of the dollar and the statement of the representative of the Bank of Japan added support to the Yen. USD/JPY Weekly Chart Source: investing.com, finance.yahoo.com

India inflation reading out tonight but the highlight for the week will be US inflation and the Fed policy decision later in the week  Source: shutterstock Macro outlook Global Markets: At times, markets simply see what they want to see in the data to justify the direction they intended to go anyway, and Friday’s trading looked a lot like that. US data (on which more below) put in a mixed performance on Friday. On balance, the data still pushed in the direction of moderating inflation, but there were some upside misses (PPI) and some downside (University of Michigan inflation expectations) misses too.  Neither of these has all much relevance for this week’s CPI data, save to confirm that it will probably also show a moderation, though exactly how much, and what split between headline and core rates remain uncertain. Yet markets had been longing to correct, which is exactly what they did. The S&P500 lost 0.74%, rounding off a poor week, while the NASDAQ lost 0.7%. Chinese stocks finished in better form, still buying into the China reopening story. The CSI rose 0.99% on Friday, the Hang Seng rose 2.32%. US equity futures remain a little downbeat about today’s opening prices. US Treasury yields added a little more gloom to the market story, with yields rising, though only by 3.7bp for the 2Y, while the 10Y yield rose 9.6bp taking the yield to 3.578%.  EURUSD remains above 1.05, pulling back from just below the 1.06 level on Friday and settling slightly lower. The AUD is a little stronger at 0.6788, the same as Cable at 1.2246, and the JPY is more or less unchanged at 136.71.  Most Asian FX made small gains on Friday, but there aren’t many clues as to their direction today. For choice, it’s probably looking a bit more negative for Asian FX than positive today. G-7 Macro: As mentioned above, the news flow out of the US on Friday supported the moderating inflation theme. University of Michigan inflation expectations for one year ahead dropped to 4.6%YoY from 4.9%, against expectations for no change, but the PPI index for November showed producer price inflation dropping less than expected at both headline and core levels, and this was probably what markets zoomed in on when selling Treasuries and stocks on Friday. It’s a big week for macro and probably therefore markets this week, with US CPI on Tuesday, and the FOMC Wednesday (3am SGT Thursday), not to mention NFIB and retail sales. UK production and construction data dominate the G-7 calendar today, and while this may have implications for Gilts and sterling, probably won’t do too much to alter the broader market picture. India: November CPI inflation is expected to come in at 6.36%YoY by the Bloomberg consensus, though we think there is a bit of downside risk to that figure (ING f 6.2%YoY). Falling vegetable prices and stable gasoline prices will drive a weak month-on-month increase and help deliver the lower inflation print, which will then be only just above the RBI’s 4%+/-2% target and suggests that they may be getting close to a peak in rates with the policy rate in line with projected inflation at 6.25%YoY.  Probably one more hike early next year should do it for the RBI. What to look out for: Inflation reports and central bank meetings later in the week Japan PPI inflation (12 December) India CPI inflation and industrial production (12 December) Australia Westpac consumer confidence (13 December) Philippines trade balance (13 December) US CPI inflation (13 December) South Korea unemployment rate (14 December) Japan Tankan survey and industrial production (14 December) US MBA mortgage applications and import price index (14 December) FOMC policy meeting (15 December) New Zealand GDP (15 December) Japan trade balance (15 December) Australia labor report (15 December) China industrial production and retail sales (15 December) Indonesia trade balance (15 December) BSP policy meeting (15 December) Taiwan CBC policy meeting (15 December) ECB policy meeting (15 December) US retail sales and initial jobless claims (15 December) Singapore NODX (16 December) Japan Jibun PMI (16 December) Eurozone CPI inflation (16 December) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

USD/JPY is aiming to shift its auction profile above 137.00 as the risk-off mood is strengthening further. Mixed views on the Federal Reserve policy outlook have escalated anxiety among the market participants. The Bank of Japan is aggressively working to achieve a 2% inflation rate. USD/JPY is expected to accelerate gains amid technical tailwinds. USD/JPY is hovering around the critical hurdle of 137.00 in the early European session. The asset is aiming to shift its business profile above the aforementioned critical hurdle as investors are getting anxious ahead of the announcement of the interest rate decision by the Federal Reserve (Fed). Volatility will stay a little longer this time as it is the last monetary policy of CY2022, which is expected to remain uncertain due to rising expectations of a slowdown in the pace of the interest rate hike. Also, Federal Reserve chair Jerome Powell is expected to provide interest rate guidance for the whole CY2023. S&P500 is displaying a subdued performance as investors await more development on Federal Reserve’s policy outlook through commentary from Federal Reserve policymakers. The 10-year US Treasury yields have surrendered gains and are auctioning below 3.57%, at the time of writing. The US Dollar Index (DXY) is displaying back-and-forth moves around the immediate resistance of 105.20. The US Dollar is facing hurdles in overstepping the 105.20 resistance despite a solid risk aversion theme in the global market. Mixed views on Federal Reserve policy outlook muddle investors’ sentiment After the release of the Federal Open Market Committee (FOMC) minutes for October’s monetary policy, it was clear that Federal Reserve policymakers are advocating a deceleration in the interest rate hike pace. Federal Reserve chair Jerome Powell and his teammates were in favor of reducing financial risks and assessing the impact of efforts made by the Federal Reserve in achieving price stability. Now, the release of upbeat payroll data for November and fresh demand in the United States service sector has triggered the option of a bigger rate hike continuation to safeguard the economy from a rebound in inflation. There is no denying the fact that higher employment generation and solid demand in service sector have the potential to spur the inflation rate again. Rabobank analysts said they expect the United States central bank to hike the policy rate by 50 basis points (bps) and see policymakers revising the terminal rate projection to the neighborhood of 5%. United States Inflation to set a stage for Federal Reserve’s policy Before the announcement of the last monetary policy of CY2022 by the Federal Reserve on Wednesday, investors are awaiting the release of Tuesday’s Consumer Price Index (CPI) data. As per the consensus, the headline inflation is expected to remain unchanged at 7.7% while core CPI that excludes oil and gas prices will inch higher to 6.4% from the former release of 6.3%. The United States Producer Price Index (PPI) data released on Friday is indicating the continuation of a slowdown in the inflation rate. The price Index for factory-gate rates was trimmed to 7.4% in line with expectations. A decline in prices for final products indicates a decline in demand, which forced producers to go easy on decision-making for end-products prices. However, investors should brace a surprise jump in inflation as the United States economy added 263K jobs in November more than the expectations of 200K. Tight labor demand is accompanied by premium earnings that could result in solid demand for durable goods by households. Bank of Japan to continue policy easing despite rising wages The risk of a decline in inflation has been triggered after a contraction in Japan’s Gross Domestic Product (GDP) numbers. A subdued demand never propels a hike in the price rise index. Bank of Japan (BOJ) Haruhiko Kuroda is of the view that even if wages rise by 3%, the BOJ will maintain its current easy policy until inflation reaches 2%. This would weigh more pressure on the Japanese yen. Meanwhile, Bank of Japan (BOJ) board member Hajime Takata said in an interview with the Nikkei newspaper published on Saturday that Japan's economy is not yet in a phase where the central bank can end yield curve control. He further added that there were some positive signs in corporate capital expenditure and wages, as reported by Reuters. USD/JPY technical outlook USP/JPY has accelerated to near the downward-sloping trendline plotted from November 22 high around 142.24. The asset is at a make or a break after a firmer rally. A bull cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at 136.5, indicates more upside. Meanwhile, the Relative Strength Index (RSI) (14) has moved into the bullish range of 60.00-80.00. Sustainability above the same will keep the reins in the asset solid.     search   g_translate    

The Fed will start its two-day monetary policy meeting on Tuesday, during which the members will recap the past year and make its forecasts for GDP, labor market, employment and interest rates for the coming years. It will be an important and long-running event as it will determine, at least for the first quarter of next year, the bank's overall view of the economy. Tomorrow's release of consumer inflation data in the US will not go unnoticed either as expectations are a 7.3% rise in CPI y/y and 0.3% m/m. But if the figures show a decline, inflationary pressures will ease, which is good for the economy. This may give the Fed a strong reason to reduce the rate hike after Wednesday's 0.50% increase. In the event of such a scenario, a strong rally in stock markets will occur, accompanied by a decline in dollar and Treasury yields. But if the CPI data exceed expectations, demand for equities will dip, while dollar will surge Forecasts for today: USD/JPY The pair remains trading within the range of 135.80-138.00. It will not go out until the release of the US consumer price index. USD/CAD The pair is trading within the range of 1.3535-1.3700. It will not go out until the release of the US consumer price index and the Fed monetary policy meeting.     Relevance up to 07:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329494

This week is one of the most macro-packed so far this year, with four major central banks holding their final policy meetings of the year, plus consumer inflation data from the United States that could be instrumental in determining the outlook for U.S. interest rates and the dollar. The U.S. Federal Reserve, the European Central Bank, the Bank of England and the Swiss National Bank will all release rate decisions. Overall, risk assets came under pressure on Monday despite further signs from China that it may be moving away from its very restrictive Covid-19 policy. Read next: Rivian Break Down Of Joint Venture Negotiations With Mercedes | Amgen Inc. Begins Action to Acquire Pharmaceutical Company Horizon Therapeutics| FXMAG.COM Euro Holds Above $1.05 Ahead of Key Policy Meetings A package of positive readings from Great Britain appeared. Against the yen the dollar rose 0.2% EUR/USD EUR/USD has been rising since reaching a 20-year low of 0.9536 in October. The rate reached the level of 1.0595, but was unable to break the breakout point and the previous high at 1.0615 and 1.0638 respectively. It is currently trading around the 1.0560 level with an upside bias. The euro is weaker today as the US dollar gains ahead of a crucial week of central bank meetings and data. There are no key macro economic events for the EUR/USD pair today. The European Central Bank is expected to deliver a dialed-down 50 bps rate hike on Thursday. Meanwhile, all eyes turn to CPI numbers from the US due on Tuesday GBP/USD The overall look of the cable market looks bearish. The GBP/USD pair is currently trading close to the level it closed last week at 1.2239. On the daily chart, we can see that the price of the cable has increased to this level. Trading on the daily chart shows the price around 1.2280. The British pound was subdued in reaction to the breaking of British GDP this morning, however, after the start of the European session, the reaction may be more positive. Other reports were also positive with only Industrial Production (MoM) (Oct) dropping to 0.0%. Source: investing.com GBP/USD daily chart AUD/USD The Australian dolar was last down 0.4% at $0.6772. Today, the AUD/USD pair reached 0.6795 during the day and then started to fall. On the daily chart, we can see that the pair is trading at 0.6756. USD/JPY USD/JPY started the week with gains. The pair rose from 135.0740 – the last week close level - to 136.8440 - current trade. This means that the Japanese yen is negatively compared to the US dollar. In other words against the yen the dollar rose 0.2% Today there were reports of the Japanese PPI, which was higher than expected. Year on year PPI reached 9.3% and PPI m/m 0.6% However, they did not support the yen. The last statement of the representatives of the Bank of Japan still plays a role. Bank of Japan Governor Haruhiko Kuroda recently said it was too early to discuss the possibility of reviewing the central bank's monetary policy framework. However, an analyst close to policy makers suggested that the BoJ may drop the 10-year bond yield cap as early as next year. Source: investing.com, dailyfx.com, finance.yahoo.com

On Monday, the Japanese yen crossed the resistance of the 137.08 monthly embedded price channel line and headed towards 138.75. Surpassing this level sets the target range at 140.05/35 , which was the low of the 22nd of September. The prospect of a double convergence with the Marlin oscillator never materialized. The signal line of the oscillator has already broken into the growth area. The main scenario is an upward movement in the short-term. On the four-hour chart, the price has settled above the indicator lines, above 137.08, and now it continues to rise. The momentum for growth was set by a synchronous price reversal from the MACD line and the signal line of Marlin oscillator from the zero neutral line (arrows).       Relevance up to 03:00 2022-12-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329605

USD/JPY remains sidelined after rising to an eight-day high. Treasury bond yields snap four-day uptrend, US Dollar stays depressed. Mixed concerns surrounding US CPI, challenges for BOJ’s pivot restrict immediate USD/JPY moves. USD/JPY traders witness a lack of direction as the quote grinds higher around 137.70 during the early Tuesday in Europe, after refreshing the multi-day top in the Asian session. The yen pair’s latest inaction could be linked to a lack of major data/events, as well as the cautious mood ahead of the US Consumer Price Index (CPI) for November. It should be noted that the mixed concerns surrounding the Bank of Japan’s (BOJ) next moves and sluggish US Treasury yields also restrict the immediate USD/JPY moves. Recently, Bloomberg released an analysis, relying on the data from the Japanese Bankers Association, which challenges the market’s hopes of the BOJ’s monetary policy tightening. “Japan’s financial regulator is examining how vulnerable lenders would be to a sudden slump in government bonds should the nation’s central bank pivot away from its ultra-loose monetary policy in future,” per Bloomberg. It should be noted that the recently firmer inflation and nearness to the end of BOJ Governor Haruhiko Kuroda’s term underpinned the talks of BOJ’s exit from the easy-money policies. Elsewhere, the US 10-year and two-year Treasury bond yields print the first daily loss in four around 3.59% and 4.36% in that order while the US Dollar Index (DXY) retreats to 104.95 at the latest. On Monday, the one-year inflation precursor from the New York Fed slumped the most on record but contrasted with the upbeat inflation expectations for the 5-year and 10-year reported by the St. Louis Federal Reserve (FRED) data. On the same line, the last week’s downbeat prints of the United States Producer Price Index (PPI) also hinted at softer US inflation but the University of Michigan’s (UoM) Consumer Sentiment Index, as well as the US ISM Services PMI and inflation expectations from the UoM Survey, suggested firmer prints of the US CPI. Amid these plays, the S&P 500 Futures print mild losses whereas stocks in the Asia-Pacific region trade mixed even as Wall Street benchmarks posted notable gains. Moving on, the mixed messages from the market, as well as from concerns surrounding Russia and China, could restrict USD/JPY moves ahead of the US inflation data. However, a firmer print of the US CPI, expected at 7.3% YoY versus 7.7% prior, won’t hesitate to recall the pair buyers amid recent hawkish Fed bets. Also read: US Consumer Sentiment Preview: Dollar set to decline on falling inflation expectations Technical analysis USD/JPY’s latest run-up could be linked to the week-start break of a descending resistance line from November 23, now support around 136.10. Also keeping the USD/JPY buyers hopeful are the bullish MACD signals and the firmer RSI (14), not overbought. However, a convergence of the 61.8% Fibonacci retracement level of the Yen pair’s run-up between August and October, as well as a seven-week-long downward-sloping trend line, challenges the USD/JPY bulls around 138.70.

The dollar was stable on Tuesday ahead of the release of the US inflation data and the last Federal Reserve meeting this year, and investors waited for an updated interest rate outlook. US stocks rose on Monday as investors gained confidence in experts' forecasts of a 7.3% increase in the US consumer price index in November. If this forecast comes true, it will be the fifth consecutive decline and the lowest level in 11 months. Even if this would still leave inflation well above the Fed's 2% target, it may be enough justification to hold back the pace of monetary policy tightening EUR/USD The rate increased slightly to 1.0543 from 1.0538. The EUR/USD daily range is 1.05281 - 1.06287 Today's data from Germany on CPI met expectations, holding the level of 10%. Source: investing.com The EU ZEW economic sentiment index improved to -23.6 in December from -38.7 in November, data released on Tuesday showed, but it still points to more pessimism than optimism. Thursday's meeting of the European Central Bank remains the focus of the week, at which an interest rate hike of 50 basis points is expected. Read next: The Huge Order Boeing 787 Dreamliners By United Airlines | Former FTX CEO Sam Bankman-Fried Was Arrested| FXMAG.COM GBP/USD The pound was broadly stable on Tuesday as gains from the UK employment data were offset by caution ahead of a key US consumer inflation reading. Also, today's UK data could ignite the cable rally fuse should the US CPI data be bound. The release of employment data showed that unemployment met estimates, while wages and the employment rate improved. The number of employees on the payroll increased by 107,000. to a record level of 29.9 million. The number of job vacancies recorded a fifth straight decline, reflecting the uncertainty stemming from economic pressure on recruitment. Wage growth turned out better than expected, with both total and regular wages increasing by 6.1% y/y, which is the fastest rate in history outside of the pandemic. The forecast for core US inflation YoY is 6.1% while overall inflation YoY is expected to come in at 7.3% compared to October’s print of 7.7%. Sterling recently rose 0.2% to $1.2296 ahead of the Bank of England's (BoE) policy decision on Thursday. Last week it hit a nearly six-month high at $1.2345. The Bank of England meets Dec. 15, when a 50 basis point rate increase is expected. USD/JPY USD/JPY hit a 32-year high of 151.95 in October, the day the Bank of Japan intervened for the second time to prevent the yen from depreciating. From this peak, the price is in a downtrend channel. The general mood of the pair is bullish. The Japanese yen stabilized below 138 to the dollar. Price is now approaching the upper band of the channel but is struggling to break above the breakpoint and recent high of 137.67 and 137.86 respectively. USD/JPY Pair slipped to 137.3270 from 137.6498 In a recent announcement, Mana Nakazor, a potential candidate for Vice Governor of the Bank of Japan next year, said the central bank should change its policy statement to give itself more room to adjust interest rates. She suggested that the Bank of Japan should "admit that interest rates may go up or down depending on economic developments" and that he should signal that "massive monetary easing will be over". The Bank of Japan is expected to maintain its monetary policy stance at its next meeting on December 19-20. Source: investing.com, dailyfx.com, finance.yahoo.com

The dollar-yen pair fell almost 300 points yesterday, reacting to the U.S. inflation report. The data came out in the red zone, disappointing the dollar bulls. The U.S. dollar index fell to a six-month low, to the bottom of the 103rd figure. USD/JPY, in turn, updated only a weekly low, denoting itself at 134.69. After that, the downward impulse faded, and during the Asian session on Wednesday, the pair even regained some of the lost positions, returning to the area of the 135th figure. Traders do not risk developing the downward direction in anticipation of today's events: the Federal Reserve will announce the results of its meeting at the end of the trading day. Notably, the main driver of the December USD/JPY decline was not the dollar, but the yen, which strengthened due to the unexpected hawkish statements of some representatives of the Bank of Japan. In comparison, yesterday's inflation report, which is crucial for all dollar pairs, triggered a 300-point drop. While signals from Japanese regulators let the bears of USD/JPY make a 600-point advance from 139.92 (Nov 30) to a 4-month low of 133.66 (Dec 2). Recall that at the beginning of this month, traders heard hawkish messages from the Bank of Japan for the first time in a long time. BOJ board member Asahi Noguchi stated that the central bank is ready to partially revise its soft monetary policy if inflation indicators turn out to be "too high." He called this step a "preventive measure" to curb inflationary growth. A little later, the head of the Japanese regulator Haruhiko Kuroda indirectly confirmed the existence of such intentions. He said that the central bank is really considering an exit from the ultra-soft monetary policy "as soon as the central bank reaches its inflation target of two percent on a sustainable basis." At the same time, he added that if the price target is reached, the bank's management will discuss the fate of assets in ETF's "as part of a strategy to exit the ultra-soft policy." Previously, Kuroda had only allowed easing the parameters of monetary policy if such a need arises. He repeated this mantra with such persistence and for so long that traders, for the most part, were no longer reacting to these dovish messages. Moreover, there is a strong opinion in the market that major changes of a hawkish nature are a priori possible only after the current governor of the Bank of Japan leaves his post (his second term in office expires in April 2023, re-election is impossible). That is why the USD/JPY traders reacted so strongly to the latest statements by Noguchi and Kuroda. Moreover, these official statements are overgrown with relevant rumors. In particular, according to Reuters, the Bank of Japan may abandon the yield cap on 10-year Japanese government bond (JGB) next year as Japan enters an era of high inflation. According to news agency sources, the Japanese regulator "begins to worry about the possibility of inflation accelerating more than expected." However, not all of Kuroda's colleagues agree that the Bank of Japan needs to adjust its policy. For example, board member Toyoaki Nakamura recently said that the country's economy is still recovering from the recession caused by the COVID pandemic, so the central bank should patiently continue easing monetary policy. At the same time, inflation dynamics are not worrying Nakamura. According to him, consumer inflation in Japan is accelerating, "but next year its growth rate is likely to slow down, as the stimulus from rising energy and food prices is already weakening." It is also worth noting that yesterday representatives of the Japan Bankers Association reported that the country's banks could suffer losses on their government bonds in the amount of more than $1 trillion if the Bank of Japan loosens its control over the yield of 10-year bonds. Commenting on this information, Bloomberg sources in the Japanese government said that the financial regulator is now studying how vulnerable creditors will be to a sudden fall in government bonds if the central bank still abandons the ultra-soft monetary policy. In other words, the discussion about leaving the ultra-soft monetary policy is still ongoing, but even the very fact of this discussion provides background support for the yen. Of course, in the short term, the USD/JPY pair will focus only on American events, reacting to the results of the December Fed meeting. But at the same time, it is worth recognizing that the Japanese currency now has "its own" fundamental arguments that can strengthen the bearish mood for the pair (earlier, the downward impulses of USD/JPY were mainly due to the weakening of the greenback). Therefore, if the Fed does not support the dollar today, the pair's downward trend may develop in the medium term. From a technical point of view, the USD/JPY pair on the daily chart is located between the middle and lower lines of the Bollinger Bands indicator, and is under all the lines of the Ichimoku indicator, signaling the priority of short positions. The main target of the downward movement is 133.90, which corresponds to the lower line of the Bollinger Bands on the D1 timeframe.       Relevance up to 01:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329747

Today's data supports our view that Japan's recovery will be driven mostly by non-manufacturing activity, while sluggish manufacturing could partially hamper the recovery  5.4% Core machine orders %MoM sa Higher than expected Core machinery orders rebounded in October Core machinery orders, a forward-looking indicator for investment, rebounded 5.4% month-on-month (seasonally adjusted) in October after dropping for two consecutive months. The gain came mainly from non-manufacturing (14.0%) with a stong rise in construction, transportation and information services while manufacturing orders continued to drop. The weakness in manufacturing investment is more pronounced due to sluggish industrial production. October industrial production was revised down -3.2% MoM (sa) from -2.6% in the new estimate and the weakness in manufacturing production broadened.     Core machinery orders rebounded in October, only partially offsetting the losses from the previous two months Source: CEIC Tankan survey showed gloomier outlook, more so for manufacturing sector The Tankan survey showed that large companies still foresee positive growth in the coming quarter but the momentum is weakening. The outlook for manufacturing slid to 6 in 4Q from 9 in 3Q while that for non-manufacturing was unchanged at 11, but missed the market consensus of 15. The recent government subsidies on tourism and fuel were expected to boost service activities and business sentiment but companies appear to be more cautious about cost-push inflation. For manufacturing, growing recession fears in the US, EU and China probably hurt the near-term outlook.  Less optimistic outlook for large companies Source: CEIC November trade preview Japan's trade deficit is expected to narrow in November to -1.5 trillion yen (vs -2.2 trillion yen in October). The early November trade data showed that import growth decelerated significantly to 21.0% YoY during the first 20 days of November (vs 49.7% in Oct for the same period), while the slowdown in exports (19.2%) was slightly milder than imports. The decline in global oil prices and the recent appreciation in the yen should have worked in favour of lowering import growth, and this trend is likely to continue in the near future.  The unexpected contraction in 3QGDP was mainly due to a surge in service imports. We believe that improvements in net trade contributions will support a rebound in growth in 4Q. The trade deficit is expected to decrease further due to weaker global commodity prices and the strong JPY, and the service balance is expected to improve with the return of foreign tourists.   Bank of Japan watch The Bank of Japan will meet next Tuesday but it will be another uneventful meeting with no policy changes. Considering the weak October IP and Tankan survey, the growth outlook for coming quarters is weakening, supporting the BoJ's easing policy.  Moreover, the Bank of Japan will likely maintain its current easing policy stance for a considerable time. Some argue that when the current Governor Haruhiko Kuroda ends his second term in April, a policy shift could materialise soon after. But in our view, the BoJ's view on inflation and policy is unlikely to change under the new governorship in 2023.  The JPY is at 135.4 and is expected to appreciate further next year as the US dollar loses strength. The narrowing of the yield gap will likely benefit the currency for the time being. This means that the negative impact of a weak currency on growth and inflation will be reduced over the next few quarters. Thus, discussions on yen weakness and the BoJ's policy response will no longer be the focus of the market next year. The real issue will be whether strong wage growth is agreed upon in the salary negotiation season next spring. Prime Minister Kishida has proposed a 3% increase in wages and incentives for businesses in return for higher wages, but the 3% wage hike is too much for some companies. However, if that happens and fiscal policy also shows hints of normalisation, it is possible for the BoJ to adjust its forward guidance and widen the 10-year yield band by the end of 2023, though it is still highly unlikely to raise its policy rate.  Read this article on THINK TagsTrade balance JPY Industrial Production Business confidence Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Dollar bears have come out of hibernation. After gaining 16% in the first 10 months of the year, the dollar index, which measures the dollar against a basket of currencies, lost 5% in November. It has since fallen another 1%, reflecting a smaller-than-expected increase in consumer prices in November. Fed ahead In currency markets, the dollar fell again after tumbling against a range of major currencies on Tuesday. The dollar is also facing more headwinds. The Federal Reserve is expected to reduce the scale of future interest rate hikes, which would allow other central banks to close the interest rate gap that attracts investment to the United States. US interest rates, which are the lower bound on both government and corporate bond yields, range from 3.75% to 4%, which is well above rates in other major economies such as the Eurozone where the deposit rate is 1.5%, or Japan, where interest rates are actually negative. Today the Fed will make its last decision of the year. Futures pricing shows markets expect the Fed will slow the pace of hikes. The latest rate hike is expected to raise rates by 50 bp this time. Fed officials say interest rates will go up. They want investors to focus on trajectory, not pace, and are signaling that interest rates could peak above market-expected 4.8% and stay there for most of 2023. If the Fed sticks to the "higher for longer" mantra central banks in Europe, the UK and China will struggle to catch up given the volatile state of their economies. EUR/USD The EUR/USD benefited from the release of inflation data, breaking the level above 1.06. The euro rose by 0.9% yesterday, and the pan-European Stoxx 600 index saw gains of 1.29%. However, the European Central Bank is also getting ready for a 50bps rate hike tomorrow. In Europe, the ECB will announce its latest monetary policy decision tomorrow. Both the Fed and the ECB are expected to raise interest rates by 50 basis points, keeping the rate differential between them the same, but central banks may differ in their forecasts for the coming months. Differences in the forecasts of the two central banks for the coming months will determine where EUR/USD will trade in the short to medium term. Read next: "Candid Stories" - Instagram like BeReal? Supermarkets Are Doubling The Number Of Their Own Product Lines | FXMAG.COM GBP/USD Yesterday, GBP/USD opened the prospect of a move towards 1.2750 after breaking 1.2300. The pound rose by 0.82% against the dollar yesterday to reach a 6-month high. The upward price movement was due to newly released inflation data from the US. Today, decisions on monetary policy will be announced by the Fed, and on Thursday, next to the ECB, the Bank of England. The Bank of England will have to contend with the biggest drop in living standards in history as the energy crisis, fiscal austerity and lack of growth eat into British household budgets. After positive GDP data on Monday, UK Chancellor Jeremy Hunt warned that the economy could get worse before it got better. While yesterday's employment figures were largely positive, they indicated a slowdown in employment as firms prepare for a tough start to 2023. The Bank of England released its Financial Stability Report yesterday, warning that 2023 will be a tough year for British households due to a combination of falling real incomes, rising mortgage costs and higher unemployment. AUD/USD The Aussie Pair benefited from lower-than-expected US inflation. Yesterday, the pair was trading low in daily levels in the 0.6733-0.6793 range. Today, the quotes are higher above 0.68, oscillating close to the highest levels in three months The lack of events on the Australian market makes the AUD/USD pair dependent on reports and events from America. USD/JPY The Japanese yen held its recent advance to below 136 per dollar. Yesterday, the USD/JPY traded above 137. The decline will occur after the release of US inflation data. The drop took place from the level of 137.2760 to the level of 135.3800. Currently, the pair is trading at a price of 135.0040.   Source: finance.yahoo.com, investing.com, dailyfx.com

After the USD/JPY pair fell to support 135.34 on Tuesday, the price continues to stay at this price channel line until this morning. The Marlin oscillator is rising, the price has an opportunity to rise to 137.12. Crossing this level will make the 138.78 target available. Settling below 135.34 will open the 133.26 target. Taking into account the sharp price decline on Tuesday (-211 points), which is not typical of the growing correction (which started on December 5), the main scenario is the pair falling to the nearest support at 133.26. On the four-hour chart, the price is above 135.34, the Marlin oscillator is rising in the area of the downtrend. The price could rise a bit, to the resistance of the MACD line (136.30), from which a reversal with the 133.26 target is likely. Relevance up to 04:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329854

USD/JPY picks up bids to snap two-day downtrend. Multiple levels marked since December 01 restrict immediate upside. Receding bearish bias of MACD signals further recovery. 100-SMA acts as the last defense USD/JPY bears. USD/JPY clings to mild gains during the first daily positive in three around 135.80 heading into Thursday’s European session. In doing so, the yen pair portrays recovery from a two-week-old ascending trend line while poking a resistance area comprising multiple levels marked since early December. Given the recently easing bearish bias of the MACD, coupled with the quote’s rebound from the short-term key support line, the USD/JPY may witness further advances. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM However, a clear upside break of the 135.80-136.00 area becomes necessary to convince the pair buyers. Even so, the 100-SMA level near 137.15 could challenge the Yen pair recovery. In a case where the USD/JPY bulls manage to keep the reins past 137.15, a run-up towards the late November swing high near 139.90 and then to the 140.00 round figure can’t be ruled out. On the contrary, pullback moves need to break the aforementioned support line, near 134.60 at the latest, to recall the USD/JPY bears. Following that, a fall toward the monthly low near 133.60 appears imminent. Should the USD/JPY pair remains bearish past 133.60, the south-run could aim for the August month’s low near 130.40. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM   USD/JPY: Four-hour chart Trend: Limited upside expected

Following the highly volatile action witnessed during the American trading hours on Wednesday, markets stay relatively quiet early Thursday with investors gearing up for the Bank of England and the European Central Bank policy announcements. The Swiss National Bank will also unveil its interest rate decision and the US economic docket will feature Retail Sales and Industrial Production data for November alongside the weekly Initial Jobless Claims and the NY Fed's Empire State Manufacturing Survey. As expected, the Federal Reserve hiked its policy rate by 50 basis points to the range of 4.25-4.5% following its December policy meeting. The revised Summary of Economic Projections (SEP) showed that the median terminal rate projection rose to 5.1% from 4.6% in September's SEP. Although the initial market reaction to the hawkish dot plot provided a boost to the US Dollar, the currency lost its strength during FOMC Chairman Jerome Powell's press conference. Powell said no one knew if the US economy would tilt into a recession next year or not and added that they could revise the peak rate projection lower if they continued to see soft inflation data. The US Dollar Index (DXY) fell to its weakest level in six months at 103.44 late Wednesday and the 10-year US Treasury bond yield retreated below 3.5%. The risk-averse market environment helps the US Dollar stay resilient against its rivals in the European session on Thursday with the DXY clinging to modest recovery gains slightly below 104.00. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Earlier in the day, the data from China showed that Retail Sales contracted at an annual rate of 5.9% in November, missing the market expectation for a decrease of 3.6%. Additionally, Industrial Production expanded by 2.2% in the same period, compared to analysts' estimate of +3.6%: Australian Bureau of Statistics announced on Thursday that the Unemployment Rate stayed unchanged at 3.4% in November with the Employment Changed coming in at +64K. Nevertheless, AUD/USD struggled to capitalize on the upbeat data and declined toward 0.6800, pressured by the risk-averse market environment and dismal macroeconomic figures from China. Similarly, NZD/USD stays on the back foot and trades in negative territory below 0.6450. The data from New Zealand revealed that the Gross Domestic Product expanded at an annual rate of 6.4% in the third quarter, beating analysts' projections of 5.5%. EUR/USD came within a touching distance of 1.0700 late Wednesday before retreating toward 1.0650 on Thursday. The ECB is widely expected to raise its policy rate by 50 bps. Hence, investors will pay close attention to revised quarterly projections and President Christine Lagarde's comments on QT and the policy outlook.  ECB Preview: Five reasons to expect Lagarde to lift the Euro with a hawkish hike. GBP/USD touched its highest level since early June near 1.2450 on Wednesday but lost its traction. As market participants gear up for the BOE rate announcements, the pair trades in negative territory slightly below 1.2400. BoE Interest Rate Decision Preview: Focus on vote split amid high inflation and economic gloom. USD/JPY struggled to make a decisive move in either direction on Wednesday and closed the day flat. The pair clings to modest daily gains above 135.70 in the European morning. USD/CHF slumped to its lowest level since late March at 0.9216 late Wednesday but managed to stage a rebound. The pair holds above 0.9250 so far on Thursday. The SNB is expected to raise the policy rate by 50 bps to 1% but some experts think that the bank could opt for a 75 bps hike instead. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM Bitcoin rose to its highest level in over a month near $18,400 on Wednesday but erased its daily gains before closing flat below $18,000. BTC/USD edges lower early Thursday and trades near $17,700. Ethereum lost nearly 1% on Wednesday and is already down more than 1% on Thursday, trading slightly below $1,300.

Technical analysis: USD/JPY has been trading upside over the Asia session but I see strong resistance at 135.60 and potential for the downside movement. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM Trading recommendation: Due to the strong downside in the background and key resistance, I see potential for the the downside movement towards lower references. Watch for the potential selling opportunities with the downside objective at 134.65. Stochastic oscillator is showing overbought condition and potential for the downside movement..... Key resistance is set at the price of 136.00 Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM   Relevance up to 09:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305055

Post-Fed volatility risk is not over yet. All eyes are on the ECB's approach to quantitative monetary tightening and economic updates from the BoE. The US Federal Reserve has also delivered a 50bps interest rate hike, pushing borrowing costs to the highest level since 2007 and hinting at a rate peak of 5.1% next year, above previous projections The Federal Reserve's decision was as provocative as expected for policy decisions - at least in relation to market expectations. The observation of volatility from risk assets and the dollar was noticeably more limited than one might expect Despite Chairman Powell's hawkish tone, the US dollar fell to a new low. The dollar has since fallen to a new five-month low. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM EUR/USD The EUR/USD Pair is trading soft on the session and drops just before the ECB meeting. The euro fell 0.67% to $1.0611 The European Central Bank was set to raise interest rates for the fourth time in a row, although by less than at its last two meetings. The decision was as expected, ie a 50bp hike. Thus, interest rates in the euro zone reached the level of 2.50% Supply chain crisis in the Eurozone economy have not calmed yet as war tensions between Russia and Ukraine are still solid. This is expected to keep Eurozone inflation expectations solid ahead. The European Central Bank expects the inflation rate to remain above 2% for the next three years. This will force the president of the European Central Bank, Christine Lagarde, to further tighten interest rate policy in order to tame rampant inflation. GBP/USD There is an interest rate decision by the Bank of England, and the big fear is the same as the ECB's: recession fears that could stop the Central Bank from raising interest rates further next year. This could result in discrepancies in interest rate expectations between the US and the UK. The Bank of England (BoE) has raised interest rates for the 9th consecutive meeting as the UK central bank continues to battle with inflation. The BoE raised the bank rate by 0.50% to 3.50% today After the expected half-point increase by the Bank of England, the British pound continued to fall. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM AUD/USD The Australian dollar weakens slightly following disappointing rounds of key Chinese economic data. The Australian dollar is moving within a bearish trend China's slowdown has negative consequences for Australia. China is Australia's largest trading partner. Thus, economic performance in the former often has knock-on effects on the latter. If this is the case, a slowdown in China could hurt Australian production in the future, perhaps inspiring the Reserve Bank of Australia to change its policy course USD/JPY USD/JPY Pair rose to 136.6907 from 135.4721 getting a lift from the Fed decision. The Japan trade deficit narrowed modestly in November according to data released overnight, with brisk growth for both imports and exports. Source: finance.yahoo.com, investing.com

USD/JPY comes under fresh selling pressure on Friday amid a modest USD weakness. The Fed’s hawkish outlook to revive the USD demand and lend support to the major. Fading safe-haven demand could undermine the JPY and help limit losses for the pair. The USD/JPY pair meets with a fresh supply on Friday and erodes a part of the previous day's rally to over a two-week high. The pair maintains its offered tone through the early European session, though has managed to recover a few pips from the daily low and is currently placed just below mid-137.00s. The US Dollar struggles to capitalize on the overnight recovery move from a six-month low and comes under some renewed selling pressure on the last day of the week. This, in turn, is seen as a key factor acting as a headwind for the USD/JPY pair. That said, the Fed's hawkish outlook should help revive the USD demand and lend some support to the major, at least for the time being. It is worth recalling that the US central bank struck a more hawkish tone on Wednesday and signalled that it will continue to raise rates to crush inflation. In the so-called dot plot, policymakers projected at least an additional 75 bps increases in borrowing costs by the end of 2023 and see the terminal rate rising to 5.1%, higher than the 4.6% level forecasted in September. Apart from this, signs of stability in the financial markets could undermine the safe-haven Japanese Yen and contribute to limiting the downside for the USD/JPY pair. Even from a technical perspective, repeated failures to find bearish acceptance below the very important 200-day SMA and the subsequent bounce warrant caution before positioning for a further near-term depreciating move. Market participants now look forward to the release of the flash US PMI prints, due later during the early North American session. The data might influence the USD price dynamics, which, along with the broader risk sentiment, should provide some impetus to the USD/JPY pair. Nevertheless, spot prices remain on track to post modest gains for the second successive week.

What are Forex (FX) Options?Forex options are just like equity options which gives the buyer of the options the right but not the obligation to buy or sell a currency pair on a specific date (expiry) at a specific price (strike price). In exchange for this right, the option buyer typically pays a premium to the seller/writer of the option.The key point of difference between FX options and Equity options is that a call option on one currency is necessarily a put option on the other currency. If you are buy EURUSD call – you are essentially buying EUR call and USD put. Basic Terms Types of FX OptionsThere are two types of FX options – calls and puts. Buying a call option gives you the right to buy a currency pair while buying a put option gives you the right to sell a currency pair on the expiry date. Selling a call option involves taking on an obligation to sell at a pre-agreed price on the expiry date while selling a put option involves taking on an obligation to buy at a pre-agreed price on the expiry date in exchange for receiving a premium.We shall use an example involving EURUSD call and put options below to illustrate this:Scenario Analysis for EURUSD option at expiry vs Owning an outright 2 mth EURUSD forward Assumption: Buy/Sell 100,000 EURUSD Call/Put option at strike 1.07 with 2 month tenor for 0.0150 (150 pips), P&L in USD Buying FX OptionsTypically, traders who wish to place a directional bet on a currency pair would buy OTM calls or puts. As OTM options are much cheaper and as a result offer the most leverage, it gives the most bang for buck especially when one is trying to trade strategies that offer asymmetrical returns. OTM options however are most prone to time decay (meaning the more time passes without the spot prices moving in favour of the option the more acute the loss of value of the option). At times, traders might wish to buy ATM options due to their sensitivity to volatility and price changes in the underlying. Due to their higher deltas (sensitivity to spot price move), they are also relatively more likely to expire in-the money. The flip side is that ATM options cost more than OTM options and therefore can lead to higher loss of premium if the option expires worthless. ITM options have high intrinsic value (forward price - strike for calls and strike – forward price for puts) and often work like a proxy spot position. These options are usually much more expensive and thus offer little leverage. In addition, the total premium loss would be much larger should the option expire worthless. In short, the optionality in an ITM option is limited and hence it tends to be less popular. Another way good traders would try to reduce the premium paid is via trading option strategies to implement their views. Some common strategies include call spreads (Buy call, Sell call), put spreads (Buy put, Sell put), collar strategies (Long stock, Buy put, Sell call) and risk reversals (Sell put/Buy call or Sell call/Buy put) Selling FX OptionsTraders can generate income by selling FX options in exchange for a premium. As an option seller, you are receiving the premium to protect the option buyer from market moves. The maximum gain from selling options is the premium received while the losses can be unlimited. Why do traders sell FX Options?If selling FX options can lead to unlimited losses, why would anyone sell them? As the value of options comprise of volatility, time decay and moneyness of the option, traders can take advantage of temporary spikes in volatility to sell FX options to express their view on the market. Premium received can be measured in basis points to give you a fairer indication of the amount of premium you receive during different time periods. Selling putsIf you are bullish on USDJPY and think that the pair is unlikely to fall below 136 in the next month (and you are prepared to buy it at 136 even if it gets there), one way to express this view is to sell 1 month puts at the strike of 136 for some premium. If USDPY stays above 136, you do not have any obligations at expiry but if USDJPY falls below 136, you would be long USDJPY from 136. Selling callsOn the contrary, if you are bearish on USDJPY and think the pair is unlikely to rise above 140 in the next month (and you are prepared to sell at 140 even if it gets there), you can sell 1 month calls at strike 140 for some premium. If USDJPY stays below 140, you do not have any obligations but if USDJPY rises above 140, you will be short USDJPY from 140. Key differences between FX options and Equity options1. FX options are traded over-the-counter (OTC) instead of an exchange. As these products are traded OTC, the variables like the size, strike price, and tenor are customizable. You can choose your own size, expiry date and strike price instead of adhering to standardized ones you would typically find in an exchange traded option like equity options. 2. FX options are European style options. This means that these options can only be exercised on the expiry date as compared to any time before expiry in American options.3. When you exercise an FX option, the resulting position is a FX margin position instead of a position required to be fully funded by cash. For example, a 100,000 USDJPY call option expiring in-the-money (ITM) will result in a long 100,000 USDJPY position that utilizes way less margin than 100,000 USD. If initial margin is 5%, then 5,000 USD is required to receive this position at the strike price in addition to the position P&L. Key advantages of trading FX options1. The maximum loss from buying FX options is the premium paid. Buying FX options to express your view will not lead to margin calls due to mark-to-market losses. 2. Selling FX options in the right conditions can lead to a steady income (premium) stream to supplement your portfolio returns. Typically traders can take advantage of a interim spike in volatility in a deeply liquid market that trades 24 hours a day for 5 days a week to sell FX options to maximize their returns. 3. Options are often used by FX traders as proxy take profit (Sell call against long/Sell put against short) or stop loss orders (Buy put against long/Sell call against short) for their spot tradingKey risks of trading FX options1. There is a potential of unlimited loss when selling FX options due to the high leverage factor. 2. There is a risk of using FX options as a means to take profit or enter into a position as the option might be in-the-money before expiry and turn out-of-the-money at expiry. Without the option, you might have taken profit or entered into a position via a spot order otherwise. 3. Buying far OTM FX options frequently can lead to a low probability of success and too much premium loss due to time decay.   Source: Primer on FX Options | Saxo Group (home.saxo)

The dollar was little changed on Friday after jumping in the previous session as traders analyzed a string of central bank rate hikes and grappled with the prospect that borrowing costs could still rise. This week has been hot in central bank events. The Fed raised its key interest rate by 50 basis points on Tuesday. Jerome Powell's speech at the press conference sparked volatility in the market.Further tightening is excellent news for the US dollar. Yesterday, the ECB and the BoE also followed the Fed and raised rates by 50 bp. GBP/USD Thursday's Bank of England rate hike of 0.5 percentage point pushed base rates to highs not seen since 2008 (3.5%). But even that wasn't enough to prevent GBP/USD from its biggest daily drop in six weeks The markets interpreted the move as a "dovish" increase in interest rates, even though six of the nine members of the Monetary Policy Committee in London voted for it, and another member wanted stricter action. This division does not suggest that the Bank is willing to refrain from further rate hikes. Thursday's close of the day showed that GBP/USD fell convincingly below the uptrend line that had previously held back bearish enthusiasm for five weeks. This puts clear downward pressure on the pair. The pound fell on Friday against the euro and the U.S. dolar. Sterling fell 0.2% to $1.2160 against the dolar, versus the euro , the pound exchanged hands at 87.39 pence, 0.2% lower on the day. EUR/USD EUR/USD touched a post-ECB high of 1.0736 yesterday before consolidating gains around the 1.0650 area. The technical set-up for the pair remains positive. Yesterday the European Central Bank raised interest rates by 50 bp as expected. Thus, the rate level reached 2.50%. This level was last seen in 2008. The ECB expects it to increase further. The European Central Bank (ECB) will raise interest rates "significantly" in the coming months to fight entrenched inflation, The ECB President Christine Lagarde said yesterday, sending a hawkish signal to the market. This signal turned out to be crucial for the strength of the euro. The ECB's hawkish stance, if fully realized, suggests that the single currency has room to grow in the coming weeks. Read next: Knorr-Bremse Strengthens Its ESG Measures In Partnership With Deutsche Bank | Arizona Is Attractive For The EV Market | FXMAG.COM USD/JPY Against the Japanese yen, the dollar fell 0.54% to 137.01 on Friday. The Japanese yen held above 137 per dollar, facing renewed pressure after the US Federal Reserve offered a more hawkish outlook on its policy. The yen clearly depreciated after the Fed meeting. However, it may fall as the Bank of Japan meeting approaches early next week (19-20/12) AUD/USD The Australian dollar fell sharply to around $0.67, facing renewed pressure as major central banks presented a more hawkish monetary policy outlook than markets anticipated, adding to fears of a potential recession next year. In the European session, it will fall even more and is below $0.67. Moreover, the latest data showed that consumer inflation expectations in Australia hit a seven-month low in December, while the country's unemployment rate remained at 3.4% in November. Investors also reacted to data showing that Australian private sector activity contracted for the third straight month in December. Source: investing.com The RBA has now raised the cash rate for eight consecutive months and said it expects further tightening to bring down inflation. Source: finance.yahoo.com, investing.com, dailyfx.com

The Japanese yen is in positive territory, paring some of the sharp losses from Thursday. In the European session, USD/JPY is trading at 137.12, down 0.48%. Dollar rises as Fed hints at more rate hikes The Japanese yen has shown some strength recently, but it was the dollar’s day on Thursday, with broad gains against the majors. USD/JPY jumped 1.7%, briefly punching above the 138 line. The Fed has been consistently sending out a hawkish message, but the markets seemed a bit intoxicated over recent inflation reports which showed a downturn and were lower than expected. To the market’s surprise, Jerome Powell didn’t show much enthusiasm about the recent inflation data, saying that more evidence was needed to convince the Fed that inflation was on a “sustained downward path.” This week’s 0.50% rate hike raised the benchmark rate to 4.50%, its highest level since 2007. The rate statement was hawkish, stating that the Fed expected “ongoing increases” in interest rates. This poured cold water on market hopes that the Fed was poised to wrap up its current rate cycle at the next meeting in February. This message was not new, as Powell has said that he anticipated the terminal rate being higher than the September forecast. The terminal rate is likely to rise above 5%, with some forecasts projecting that rates will go as high as 5.6%. Read next: The Cable Market (GBP/USD) Held Back Bearish Enthusiasm, The ECB President Christine Lagarde Gave Support To The Euro| FXMAG.COM The Fed’s hawkish stance will likely mean a bumpy road for the yen. The post-Covid recovery has been slow, and the uncertain global economy outlook is not good news for Japan’s export sector. The Bank of Japan is in no hurry to change its ultra-loose policy, which means that the US/Japan rate differential will continue to widen after the New Year. Inflation is rising in Japan, but the BoJ is an outlier in that inflation is not a number one priority. USD/JPY Technical USD/JPY is testing support at 1.3707. This is followed by support at 1.3620 There is resistance at 138.25 and 138.90 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Fed sends yen sharply lower - MarketPulseMarketPulse

It was the most important week in 2022. Fed President Jerome Powell and ECB President Christine Lagarde reminded the markets that they are still committed to fighting inflation, rather than focusing on promoting economic growth. EUR/USD The pair ended the week at 1.0574, thus trading below $1.06. The close is similar to earlier this week, with the pair also trading above $1.05. Also on Monday it recorded a low of 1.0511. This week the most important event in the euro zone was the ECB's decision on interest rates. The central bank of the European Union made the same decision as the Fed and the Bank of England, i.e. it raised interest rates by 50 bp. But it was the president of the ECB who gave the euro strength. And on Thursday, after a hawkish statement, it reached its highest level of the week, hadel was close to 1.07 (1.0691 to be exact). A number of significant events took place in the European Union this week. The ECB meeting was adjourned; the remaining data must be resolved. Despite traders' expectations for a fall of 1.5-2.5%, industrial production fell by 2% in October. Instead of an increase of 10%, exactly as indicated by the first estimates of the index, inflation rose in November by 10.1%. The economic activity index in the manufacturing sector increased to 47.8, and in the services sector to 49.1. However, both indicators are still below the 50.0 threshold, so they cannot be considered positive at the same time. This week's macroeconomic reports from the EU seem to be disappointing. This problem has been around for a long time. In general, the euro continues to grow unreasonably, although it has already reached its peak. GBP/USD The GBP/USD pair started the week of December 12-16 at 1.2266. Then after the US data inflation traded between 1.2243-1.2300. The lowest level, similarly to the euro, was recorded by the cable pair at the beginning of the week, the lowest traded at 1.2217, and the highest at 1.2248 this week. The pair ended the week below $1.22 as fears of a recession increase. Overall, the British pound looks set to end the week under strong pressure against the US dollar, with weak economic data on Friday fueling fears of a recession in the national economy. Thursday's Bank of England rate hike of 0.5 percentage point pushed base rates to highs not seen since 2008 (3.5%).Markets interpreted the move as a dovish interest rate hike. The recent decision of the Bank of England revealed a three-way split of votes: six out of nine MPC members voted for a 50 bp rate hike, two members voted for no change, and the last member voted for another 75 bp rate hike. Recession fears are intensifying with prospects for the UK to be in recession for "an extended period" while inflation is expected to remain very high in the short term before falling sharply from mid-2023. Overall, the short-term outlook for the economy in the UK remain negative, which is starting to show in sterling now. AUD/USD The Aussie Pair started the week at 0.6780. The movements of the pair were similar to EUR/USD and GBP/USD. The pair recorded the lowest trade at 0.6678 and the highest at 0.6892. Ending the week at 0.6686. The Australian dollar was weakened last week after the US dollar posted an incredible rally amid growing fears of a recession. The Federal Reserve raised the interest rate by 50 basis points to a target of 4.25% - 4.50% on Wednesday. Read next: Assistance In Making Investment Decisions - Technical Analysis| FXMAG.COM Australia's unemployment rate remains at a multi-generational low of 3.4% after adding 64,000 jobs. jobs in November. This is in addition to the growing trade surplus from the previous week. The rest of the fundamental picture is a little mixed towards the end of the year, when building permits and retail sales data are disappointing. These figures appear to have been influenced by RBA interest rate hikes. USD/JPY USD/JPY started the week trading at 136.6790. The week's high is 138.15 and the low is 134.71. As you can see, the trade was very diverse and the price fluctuated rapidly. The pair ended the week at 136.69 Source: finance.yahoo.com, dailyfx.com, investing.com

On Friday, the USD/JPY pair returned to the 135.38-137.12 trend line range after another false breakout above its upper line of 137.12. Earlier, such false exits were on December 12 and December 6. Monday opened with a downward gap of about 80 pips and despite the high upper shadow of today's candle, that gap has not closed. Maybe the price will reach the bearish target at 135.38 and then go back to 137.12 to close the gap. As a result, we expect the price to move sideways in the current range of 135.38-137.12 today and tomorrow. Further, according to the main scenario, the price will cross support at 135.38 and move towards the target of 133.33. The Marlin oscillator is in the negative territory, but if the price is still flat, then the oscillator signal line will go along the zero line. Or it will continue its gradual decline in the area of the downtrend, showing us the increasing prospect of an expected fall. On the four-hour chart, the price has settled under the balance and MACD indicator lines. The Marlin oscillator also looks settled under the zero line. We expect the gap to close and the price to return under these indicator lines. Next, we expect an attack on support at 135.38 Relevance up to 03:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330109  

Volatility has been extremely high for financial markets last week due to the Fed, Bank of England and ECB meetings and the release of economic data. All of them caused sell-offs in risky assets, primarily because nothing new has happened and nothing substantial has been said. The ECB and the Fed raised interest rates as expected, while the latest statistics were in line with expectations. Most central banks also noted that tight monetary policy will continue in 2023. Basically, last week's events have brought back the expectations that a widespread recession could start as early as next year. This led to another stock market crash and a rise of dollar to recent highs. However, the decline is likely just a correction, not a full-scale downward trend as demand could return if market sentiment improves. That could also lead to a weaker dollar and more stable treasury yields during the last two weeks of the year. Forecasts for today: AUD/USD 0.6680 is a key support level in AUD/USD. If market sentiment improves today, the pair could bounce up to 0.6800, then go to 0.6915. USD/JPY Even if USD/JPY is bullish, a rise in risk appetite could prompt the pair to rebound to 138.00.   Relevance up to 06:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330121

Japan's inflation rate is finally starting to tick up. It's expected that the country will report a further increase in inflation in November to 3.9% from 3.7% prior. But, before that information is made available, the BOJ is expected to meet to decide its monetary policy stance. Normally this would be an issue for a central bank, having to make a rate decision without the latest inflation figures. But the long-standing consensus is that the BOJ won't change policy, at all, and keep its now decades-long extreme easing policy. So, if the interest rate isn't going to be a surprise, what could move the markets? Well, that's preparing for what's coming next year. A change in leadership Kuroda, known as an ultradove, will step down at the end of his term in April. The consensus is that since rates have been negative for the entirety of his mandate, it's unlikely he will change the situation just as he's about to go out the door. But, that doesn't mean he won't help set things up for whomever replaces him. And that could start coming out as soon as the next meeting. Read next: Netflix (NFLX) slumped 8.63%, as a media report said the video streaming firm is refunding advertisers after missing views targets| FXMAG.COM For a long time, it's been rumored that the most likely replacement for Kuroda would be Hiroshi Nakaso. He's a former Finance Ministry official, and is seen as a lot more hawkish than the current governor. In the past, he's already issued proposals on how the BOJ could exit its extraordinary easing policy. A change in outlook Nakaso has proposed a slow shift in policy, with small steps to bring inflation down. That could be something of a challenge, since many other central banks have raised dramatically to head off skyrocketing inflation. Japan has managed to avoid that situation, so far, but inflation is near double the target rate and keeps rising. Which has been increasing pressure on the BOJ to do something. One of the ways that the BOJ could relieve that pressure is to let it be known that it is considering some of the "soft" measures to lift rates, but not actually do any changes. Given how long the BOJ has been stuck in one policy, it could be enough to "re-anchor" inflation expectations. What about the weaker yen? One of the things that was driving inflation was the weakening yen earlier in the year. It got so bad that the Japanese government had to step in a couple of times. But since expectations that the Fed was about to level off in its rates started to cement in the mind of the markets, the yen has recovered a little. This has given the BOJ - and particularly Kuroda - more room to keep rates low at least for a while. But, if the trend with the currency could reverse, that could cause complications for the BOJ. One of the ways to deal with that would be to suggest the BOJ was looking at easing off on yield curve control. That's a policy that would be expected to be enacted if Nakaso were to become governor. But, whether the BOJ judges it an opportune moment to let that slip now or safe that card to play in the new year, is still an open question. That could be the determinant of whether the yen continues to drift in it's current direction, or starts to recover against the dollar on expectation of the new policy.

The US dollar fell on Monday as improved market sentiment pushed stocks and riskier currencies up. The US Dollar Index (DXY) - which tracks the dollar against a basket of six major currencies - fell 0.2% to 104.580 The euro gained 0.4% to $1.06260 , while sterling strengthened 0.7% to $1.22195. However, both remained lower than their levels before last week's central bank moves. EUR/USD The EUR/USD pair started trading above $1.06 this week. The technical outlook for the euro remains positive and reasonably well supported. The single currency appreciated against the US dollar The latest publication of the German Ifo shows that the sentiment in Europe's largest economy "improved significantly" at the end of the year. The business climate rose to 88.6 from 86.4 in November, breaking the index's six consecutive declines, while the expectations reading hit 83.2, up from 80.2 the previous month. GBP/USD And EUR/GBP GBP/USD generally trades in the range of 1.2170 - 1.2200 during the day. The intraday high was above 1.2240. Currently, the cable pair is trading in the range of 1.2170- 1.2180 The British pound crept back toward the previous week's six-month high against the US dollar on Monday, days after the Bank of England (BoE) raised its benchmark interest rate to its highest level since 2008. The Bank of England made its ninth consecutive interest rate hike on Thursday, raising interest rates by 50 basis points (bps) to 3.5% as the central bank battled double-digit inflation. Read next: Russian Drones Attacked Kyiv Again | Most respondents do not want Musk| FXMAG.COM The euro fell 0.1% against the pound to 86.94 pence. The single currency hit a month-high against the pound sterling on Thursday after decisions by the BoE and the European Central Bank (ECB). ING analysts believe the pound sterling could be vulnerable against the euro, and their target is to move to 89p in the first quarter of 2023. USD/JPY The Japanese yen galloped higher amid illiquid trading conditions on Monday morning on news of a possible change in the Bank of Japan's (BoJ) monetary policy targets. The Bank of Japan currently has a prime interest rate of -0.10% and maintains yield curve control (YCC), setting a range of +/- 0.25% around zero for Japanese government bonds (JGB) for up to 10 years. The BoJ and the People's Bank of China are the only two major central banks with loose monetary policies. Much of the rest of the world is tightening financial conditions to deal with uncomfortably high and volatile inflationary pressures. The BoJ meeting will take place tomorrow, but at this stage the market does not expect any changes. USD/JPY has been in a downtrend since it peaked at 151.95 on the day of the BoJ intervention. At the end of last week, the price moved towards the upper band of the channel but was unable to sustain the move above it. The downtrend may continue to resist, currently at 137.45. Looking at the chart of the pair, you can see the strengthening of the yen against the us dollar. The pair returned to trading around $135 but is now trading above $136, meaning the yen's strength was short. AUD/USD The uplifting Australian dollar is trading slightly higher against the US dollar this Monday. This comes after China announced its intention to stimulate the economy with loose monetary policy and fiscal support. Looking at the chart, it is clear that the beginning of the week for Aussie is strong. Comparing to the close, the can pray increased significantly and is now trading above $0.67. Source: investing.com, dailyfx.com, finance.yahoo.com

USD/JPY drops more than 3.0% to refresh multi-day bottom after Bank of Japan tweaks Yield Curve Control (YCC) policy. Chatters surrounding Japan’s budget, Treasury bond buying also entertain Yen traders. BOJ Governor Kuroda shows readiness to ease policy if needed, USD/JPY stays pressured. Risk aversion fails to underpin US Dollar as Federal Reserve appears less hawkish. USD/JPY bears the burden of the Bank of Japan’s (BOJ) surprise policy tweak during early Tuesday, despite the latest rebound. While portraying the Yen trader’s mood, the quote initially slumped to the lowest levels since early August before the recent bounce from 132.66 to 133.60. Even so, the quote remains 2.75% in the red as we write. Bank of Japan surprises markets with YCC move, drowns USD/JPY Bank of Japan (BOJ) held its benchmark rate unchanged at -0.10% and kept the short-term interest rate target at -0.1% while directing 10-year Japanese Government Bond (JGB) yields toward zero. In doing so, the Japanese central bank matched the market expectations and should have kept the USD/JPY intact. The surprise factor, however, was the BOJ’s alteration of the Yield Curve Control (YCC) and the bond issuance announcements. “The BOJ will expand the range of 10-year Japan government bond yield fluctuations from its current plus and minus 0.25 percentage points to plus and minus 0.5 percentage points,” reported Reuters. Following that, the Yen pair plunged to the multi-day low of 132.66 ahead of bouncing back beyond 133.00. The BOJ not only affected the USD/JPY prices but also roiled the risk appetite and propelled the Treasury bond yields across the board, which in turn allowed the US Dollar to pare intraday losses. BOJ Governor Haruhiko Kuroda defends Yen buyers Having witnessed the BOJ-inflicted slump in the USD/JPY prices, Governor Haruhiko Kuroda allowed the Yen traders to lick their wounds while defending the easy money policies for one last time. In doing so, BOJ’s Kuroda highlights the need for a 2.0% inflation target, as well as shows readiness to ease monetary policy if needed. “Today's decision on yield curve control is not an exit of yield curve control or change in policy,” said BOJ’s Kuroda per Reuters. Also read: BoJ’s Kuroda: Necessary to achieve 2% inflation target sustainably, stably in tandem with wage growth US Dollar fails to cheer risk-off mood Despite the risk-aversion wave, the US Dollar Index (DXY) remains mildly offered near 104.40, down for the second consecutive day. The reason for the USD/JPY pair’s weakness could be linked to the Federal Reserve’s (Fed) less hawkish bias, as informed via the latest monetary policy meetings, as well as the softer US Purchasing Managers’ Indexes (PMIs) for December. Also likely to have weighed on the US Dollar are the strongly hawkish statements from the European Central Bank (ECB) officials, as well as upbeat German data. Risk catalysts will be crucial for Yen sellers Looking forward, USD/JPY pair bears need to pay close attention to the risk catalysts and the bond market moves for near-term directions amid a light calendar. Also important will be the US Building Permits and Housing Starts could join Germany’s Producers Price Index (PPI) data to direct immediate moves. However, major attention will be given to the Fed’s preferred inflation gauge, namely Friday’s US Core Personal Consumption Expenditure (PCE) – Price Index for December, expected 4.6% YoY versus 5.0% prior. USD/JPY technical analysis USD/JPY extends a downside break of the 200-DMA, as well as an upward-sloping trend line from early August, towards refreshing the multi-day low. Given the impending bear cross on the Moving Average Convergence and Divergence (MACD) indicator, as well as the downbeat Relative Strength Index (RSI), located at 14, not oversold, the USD/JPY pair is likely to extend the latest weakness. However, the RSI (14) is near the oversold territory and hence signals limited downside room, which in turn highlights the 78.6% Fibonacci retracement level of the May-October upside, near 131.70. Also acting as the downside filter is the August month low near 130.40 and the 130.00 round figure. In a case where the USD/JPY rebounds from the current level, the support-turned-resistance line from August, around 134.15 by the press time, could challenge intraday bulls. Following that, the 200-DMA hurdle surrounding 135.75 will be crucial to watch for the Yen buyers. Above all, a two-week-old horizontal resistance area near 138.00 could restrict the USD/JPY buyers from entering the ring. USD/JPY: Daily chart Trend: Limited downside expected

The Japanese Yen is set to strengthen during 2023, in the view of economists at HSBC. If the BoJ tweaks its monetary policy, the JPY may strengthen further “We believe the upward pressure on USD/JPY exerted by its yield differentials should cease when the Fed stops hiking.” “If the Bank of Japan tweaks its monetary policy (not our economists’ base case), the USD/JPY pair may fall even harder.” “A normalisation of extremes in valuation and improving Japan’s current account should also support the Japanese Yen.”

The Bank of Japan appears to be joining the ranks of the world's other central banks in deciding to take the first step toward tightening monetary policy. While it has not raised its official interest rate, it has increased the range for Japan's bond yields, which may make its interest rates a bit more attractive. Since September 2016. The Bank of Japan has kept a check on bond yields, at the time setting a target for the 10-year bond yield at 0% with a maximum deviation of 10 bps. This was meant to stimulate inflation along with other programs and provide cheap financing. The BoJ then expanded the expected fluctuation range, and when sellers of Japanese paper became too numerous and yields rose above the range, it triggered unlimited buying of those bonds. In July 2018, the fluctuation band was extended to 20 bps, and in March 2021 to 25 bps from the 0% level. Today, the range was widened to 50 bp, pushing yields towards it, to their highest level since 2015. With today's decision, the Bank of Japan (BoJ) kept its key short-term interest rate at -0.1% and the 10-year bond yield near 0%, as expected. At the same time, the central bank changed the yield curve's tolerance range in an effort to reduce some of the costs of prolonged monetary stimulation (the Bank had to launch unlimited bond purchases). The council said it would widen the 10-year government bond yield spread from the current +/-0.25 points to +/- 0.5 points. Meanwhile, the BoJ assessed that the economy was possibly to recover, with the impact of COVID and supply issues waning, while downward pressure continued due to high commodity prices and a slowdown in foreign economies, tradingeconomics reported. The annualized inflation rate is possible to rise in 2022 due to increases in the cost of food, energy and durable goods, before weakening in the middle of fiscal 2023. The council reiterated that it will take additional easing measures if necessary, and expects short- and long-term rates to remain at current or lower levels. Significant impact on the yen exchange rate Although interest rates were not changed, Japanese bond yields moved up, reducing their divergence from bonds of the US, Germany or other countries where a rate hike cycle is underway. As a result of this, the Japanese yen was able to gain decisively, falling from the JPY137 area to JPY133 this morning. Japan was thus able to take another step to support the yen, following its previous second successful currency intervention. Source: Conotoxia MT5, USDJPY, Daily Perhaps after a strong dollar, the time would come for a strong yen as well, and changing the target for bond yields may be just the first step. Further possible action, may be an interest rate hike, where the market expects an increase to 0.3 percent in 2023. This would mean a 40bp increase, which, assuming US rates can start falling or stop rising at the same time, could give the yen a boost after a disastrous 2022. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

The Bank of Japan announced a surprise change in its yield curve control policy, and will now allow JGBs to trade to an upper bound of 0.50%. While Governor Kuroda has explicitly warned this is not a rate hike, taming speculation of further BoJ normalisation in 2023 won't be easy. USD/JPY may break below 130.00. Elsewhere, expect no fireworks from Hungary The Bank of Japan in Tokyo USD: BoJ hawkish shift may have broad implications Markets have been shaken from their pre-festive low volatility torpor this morning, as the Bank of Japan announced a surprising change in its yield curve control (YCC) policy. The target band for the 10-year JGB has been widened to +/- 0.50% from the previous 0.25%, essentially allowing higher interest rates in the current inflationary environment despite still officially targeting 0.00% as the outright target. The move was accompanied by an increase in the amount of JGB purchases, from JPY 7.3tn per month to 9tn. The immediate impact on the yen has been sizeable, with USD/JPY dropping by around 3.0%, and currently trading around 133.00. The BOJ's role as an ultra-dovish outlier among global central banks had been a key driver of JPY weakness in 2022, and markets are now assessing whether today’s announcement is effectively a first step towards a broader policy normalisation process in Japan, which would quite radically change the outlook for the yen in 2023. Incidentally, there is a risk that speculation of even higher JGB rates in 2023 could spill over into global bonds and equities (like it did today). Governor Haruhiko Kuroda’s press conference has been all about pushing back against such speculation: he explicitly warned markets not to interpret this as a rate hike and said that he doesn’t think a further widening of the yield band is needed. Our suspicion is that markets may need more reassurance with this, especially considering that Kuroda is due to be replaced in April 2023 and the timing may suggest the BoJ may be laying the groundwork for normalisation under a new governor. For now, we think risks remain skewed to the downside for USD/JPY into the festive break, and we cannot exclude a break below 130.00 - also given the generally soft dollar environment. For now, the negative reaction in global equities is capping pro-cyclical currencies, and offering some USD support on balance, but broader dollar weakness is surely a possibility in the near term. DXY could press 103.50 by the end of this week. In the US, housing data will be in focus today, with housing starts expected to have dropped further in November as high mortgage rates continue to weigh on the property sector. Francesco Pesole EUR: Sidelined, for now EUR/USD has been on the sidelines of the post-BoJ market reaction, holding marginally above 1.0600. It’s likely that the downward pressure on the dollar from the BoJ's hawkish shift has been fully offset by the deterioration in risk sentiment, which negatively impacts the pro-cyclical euro. As discussed in the USD section above, there are lingering downside risks to the dollar and we could see EUR/USD test 1.0700 before Christmas. Anyway, volatility should become significantly thinner from Wednesday/Thursday, with today’s BoJ announcement having been the last major event in markets. The eurozone calendar includes consumer confidence data – which is expected to have slightly improved in December – and speeches by ECB’s Peter Kazimir and Madis Muller. Francesco Pesole GBP: No domestic drivers There is nothing to highlight in the UK calendar today, and the pound should continue to be driven by dollar dynamics. EUR/GBP initially had a positive reaction to the BoJ announcement, likely due to GBP’s higher sensitivity to the adverse response in global equities, but is now back at yesterday’s close. Still, GBP downside risks should be larger than for the euro if risk sentiment remains pressured today, and EUR/GBP may move to the upper half of the 0.87-0.88 band. Francesco Pesole CEE: NBH ends a dramatic year with a quiet meeting The economic calendar for today offers several macro numbers from Poland, led by industrial production. We expect November's output to have slowed significantly in year-on-year terms, from 6.8% to 0.7%, well below market expectations. Also, today we will see data from the labour market and industrial producer prices in Poland. Then in Hungary, the State Debt Management Agency (AKK) will present its financing strategy for next year. The government is currently in the process of revising the budget, but the main question will be what the government's assumption will be for the absorption of EU money. Later, we will see a decision by the National Bank of Hungary (NBH) at its last meeting of the year. The NBH has made it clear on several occasions that the temporary and targeted measures, introduced in mid-October, will remain in place until there is a material and permanent improvement in the general risk sentiment. Although we’ve seen some progress here, we don't think enough has changed to trigger an adjustment in the monetary policy’s hawkish “whatever it takes” setup. Although the EU story is still not over, tangible progress should keep the forint on the stronger side and limit potential losses. Moreover, the NBH liquidity measures have worked, and implied FX yields once again soared to record highs during December; on average, they are double that of regional peers, protecting the forint from a further sell-off in our view. Overall, we expect the forint to move towards 400 EUR/HUF and below that level next year. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The Bank of Japan shocked markets by widening its target band for the 10Y JGB yield, lifting the upper ceiling to 0.5% from 0.25%. In consequence, the JPY jumped and the Nikkei index plunged. The financial market will try to find fair value for the time being Bank of Japan Governor Haruhiko Kuroda 0.5% 10Y JGB target band from 0.25% Higher than expected -0.1% BoJ policy balance rate   As expected "Today's move is not a rate hike," Kuroda said. The market responds, "Really?" We had expected the Bank of Japan to adjust its yield curve control policy around the end of 2023, but it came much earlier than we thought. We can't help but wonder, why now? As the Federal Reserve and other major central banks began to tighten policy, the Japanese yen plunged, and inflation began to take off, the market started to anticipate the first step towards normalisation by the BoJ earlier this year. Could high inflation be the cause? Well, Governor Haruhiko Kuroda reiterated that cost-push inflation is not sustainable and inflation will slow down to 2% next year.  At the press conference, Kuroda tried his best to minimise market expectations for further policy changes. He stressed repeatedly that today's move is not the first step towards an exit and a further widening of the yield band is not needed. We think today's decision has undermined the BoJ's credibility on future policy guidance. From the remarks made today, we are unable to answer our question, why now?.  Despite the denials, we think Governor Kuroda is trying to pave the way for policy normalisation before stepping down. A policy shift immediately after the leadership change is difficult and could miss the opportune time to end the decades-long ultra-low policy. He may be right that monetary policy should remain accommodative until a stable 2% inflation target is met and that the policy review is not needed in the short term. But, with today's tweak, his successor will have more flexibility to deploy monetary policy in the future.  We also expect that the BoJ will maintain its policy balance rate at -0.1% for a while and that the BoJ will take a wait-and-see approach until the next annual wage negotiation season (Shunto) in April/May.  However, market participants will likely bet on further tightening, which will likely create market noise that the BoJ did not intend.  Read this article on THINK TagsJPY JGB yields Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The Japanese yen has sent the dollar tumbling on Tuesday. USD/JPY has fallen 3.26% and is trading at 132.44 in Europe. In the Asian session, USD/JPY fell as low as 131.99 but has recovered slightly. BoJ tweaks yield curve control At the end of its policy meeting, the Bank of Japan stunned the markets with a change to its yield curve control (YCC). The BoJ announced it would widen the band around the 10-year bond yield to 50 basis points, up from 25 bp. The move allows long-term interest rates to rise higher and the reaction was deafening, as the yen soared and climbed to its highest level since August 11th. The move was completely unexpected, as the BoJ meeting was expected to be a sleeper with no policy changes. It was just yesterday that I wrote in these pages that the BoJ was not expected to change policy until the changing of the guard in April 2023, when Governor Kuroda steps down. The BoJ move is certainly dramatic but needs to be kept in proportion. The BoJ is maintaining its YCC targets and said it would sharply increase bond purchases. This could be a signal that the Bank is tweaking its current ultra-loose policy and is not planning to withdraw stimulus. The BOJ has staunchly defended its yield cap with massive bond purchases, and this has distorted the yield curve and fueled a sharp drop in the yen, which has contributed to higher costs for imports of raw materials. BoJ policy makers may have become uncomfortable with these side effects and felt that the time was right to take a small step towards normalisation. This ‘baby step’ packed a massive punch as seen in the yen’s reaction, and the markets will be looking for hints at further moves from Governor Kuroda as his term winds down.   USD/JPY Technical USD/JPY has broken below several support levels. The next support level is 131.13 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The US Dollar index retreated following the BoJ policy announcement helping EUR/USD edge higher. Later in the day we have US building permit data which could reignite some bullish behavior in the US dollar. Moreover, forex traders focused on the Japanese yen today, which jumped on key Bank of Japan (BoJ) policy. EUR/USD The EUR/USD pair also gains today, receiving a trade above $1.06. Currently, trading is in the range of 1.0630-1.0640. This morning we heard comments from ECB policymaker Nagel who stated the Central Bank is still a long way from hitting its inflation goal reiterating that the ECB likewise need to be persistent on rates. Yesterday’s upbeat German IFO survey on Business Climate and this morning drop in German PPI, which hit a 9-month low. Improving data coupled with a slightly hawkish ECB turn last week may speak in favor of a continuation of the current EUR/USD rate. At present, the mood remains bullish. Read next: Voluntary Extradition Of Sam Bankman-Fried | The Inflation Reduction Act (IRA) Is A Path To Net Zero| FXMAG.COM USD/JPY USD/JPY dropped sharply today from trading above 137 to below 134. The pair is now trading below 133, 132.6420 to be precise The Japanese Yen launched higher after the Bank of Japan tilted monetary policy at its meeting today. The USD/JPY Pair has raced to a four-month low. The pair tried to break above the upper band of a descending trend last week but was unable to do so. Today’s attempt was also unsuccessful and the BoJ’s announcement aided maintenance of the trend channel. All of this contributed to the couple's sentiment, which is currently bearish. Most BOJ watchers had expected no changes until the current governor Haruhiko Kuroda's 10-year term ends at the end of March. While it kept broad policy settings unchanged he BOJ decided to let long-term yields to move 50 basis points either side of its 0% target, wider than the 25 basis point band previously. The move has had a negative impact on the US dollar and could boost the Yen as Japanese investors are given an incentive to bring money home while increasing the Yens haven appeal. AUD/USD The price of the Aussie pair was above the 0.6725 level at the beginning of the day, but then fell below $0.67. Trading is currently in the range 0.6665- 0.6670 The Australian dollar fell above $0.67 to its lowest level in a month after the Bank of Japan's surprise decision. The Australian was also under pressure as other major central banks offered a more hawkish outlook on policy than markets anticipated, adding to fears of a potential recession next year. Meanwhile, recent minutes from the Reserve Bank of Australia's meeting revealed that policymakers were considering a bigger rate hike of 50 basis points. GBP/USD At the beginning of the day, cable trading was very mixed. The price of the pair traded above $1.22 and then fell all the way down to $1.2088. Currently, the price is stabilizing in the range of 1.2150-1.2175. The overall picture of the pair looks bearish and the price trades mostly above $1.21. The pound posted a slight gain on Tuesday in weak trading ahead of Christmas, but was on track for its biggest quarterly gain against the dollar since 2009. The pound is up 8.8% against the dollar in the last three months of the year, putting it on track for its best quarter in more than 13 years. Goldman Sachs expects the pound to fall to $1.07 in three months and hold at $1.11 in six months. Source: investing.com, dailyfx.com, finance.yahoo.com

Yesterday, after the Bank of Japan announced that it has decided to expand its target band for long-term government bond yields and increase the volume of bond purchases on its balance sheet, the USD/JPY pair collapsed by 3.79%. The lower shadow of the daily candlestick exactly worked off the support of the monthly chart's embedded price hyperchannel line at 130.58. Crossing this level of support will make 126.90 the next target. But so far the price (in corrective growth) is headed to the upper line at 133.33. The Marlin oscillator settled in the negative area, it has a decent margin of distance in moving down. We are waiting for the correction to end, an attempt to overcome 130.58 and attempt to break through 126.90. On the four-hour chart, the price makes a standard correction after a strong movement. The Marlin oscillator is in a hurry to get out of the oversold area, and the higher it rises, the longer it will decrease. The limit of the correction is the nearest resistance of 133.33, but the price may not reach this level. Relevance up to 03:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330354

Yen shot up on Tuesday after the Bank of Japan made a very bold decision on monetary policy. However, what is more important is the statements of Governor Haruhiko Kuroda, which gave investors an indication of what to expect when the policy ends. Yesterday, Kuroda shocked markets by announcing that he will allow 10-year bond yields to rise to around 0.5%. This is obviously a strategic adjustment to buy time in determining the yield curve next year following the changes in central bank policy, when interest rates are forecast to rise. Currently, the yield on 10-year Japanese securities is at 0.46%. This has led to a rise in Japanese bank stocks as investors are waiting for higher returns from financial institutions. Kuroda said all decisions taken were in order to increase the effectiveness of monetary policy. Given that his term ends next year, there will be at least two more meetings under his leadership, which means that his successor will complete the path to policy normalization. But there are those who point out that higher yields will mean unrealized losses on Japanese government bonds, including those held by the Bank of Japan. A sustained policy change could also hit Japanese stocks, as well as break the latest bond yield peg and trigger a sell-off in dollar in favor of yen. That will lead to Japanese investors divesting from overseas investments, which could result in a sell-off in emerging markets. As mentioned earlier, the forex market reacted to this by moving quite strongly. In USD/JPY, there is a strong support around 130.20, and its breakdown will lead to another sell-off around 126.20 to 121.10. In EUR/USD, demand remains quite weak, but there is a chance to return to December highs if the European Central Bank retains its hawkish monetary policy. However, traders need to keep the quote above 1.0660 because only by that will euro hit 1.0700 and 1.0740. In case of a decline below 1.0580, pressure will surge, which will push the quote to 1.0540 and 1.0490. Relevance up to 05:00 2022-12-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330368

The Japanese yen is unchanged on Wednesday, taking a pause after posting huge gains a day earlier. In the European session, USD/JPY is trading at 131.68. BoJ yield move sends yen soaring It was a day to remember for the Japanese yen, which gained a staggering 3.7% against the dollar. USD/JPY fell as low as 130.56, its lowest level since August. The yen’s upswing was triggered by the Bank of Japan, which stunned the markets by widening the yield control band to 50 basis points, up from 25 bp. The move, which was announced at the BoJ’s policy meeting, was completely unexpected as policy makers gave no hints of any changes prior to the meeting. The markets had assumed that any major policy moves would wait until after Governor Kuroda’s term ends in April. The band for 10-year yields has widened, but it’s important to remember that yield curve control policy, although modified, remains in effect, as the target of 0% hasn’t changed. At a press conference after the meeting, Governor Kuroda insisted that the move was not an interest hike. This is technically correct, although the effect of the wider band is the same, as Japanese bonds can now pay higher interest rates since the cap on yields is higher. Now that the dust has settled, the question is what’s next from the BoJ? The tweak to the yield control band can be viewed as a baby step towards normalisation, after decades of an ultra-loose monetary policy. There is now talk of the BoJ raising rates out of negative territory next year, which would mark a sea change in policy. The BoJ meets next in January, and the markets have priced in a rate hike at 22%.   USD/JPY Technical USD/JPY has support at 131.13 and 130.15  There is resistance at 132.83 and 134.12 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The USD gets some support from a slight increase in US Treasury yields, supported by the Fed's hawkish outlook. In fact, the US central bank has announced that it will continue to raise interest rates to suppress inflation. Moreover, the Bank of Japan's policy modification that sparked a sell-off in bond markets on Tuesday is acting as wind in the sails for US bond yields. Market participants are now awaiting economic data from the United States, including the release of the Consumer Confidence Index. EUR/USD The euro holds its level above $1.06, and today the mood is bearish. The current pair is trading below 1.0620. The US dollar is regaining some positive traction and reversing some of the overnight sharp decline which is seen as a headwind for the EUR/USD pair. Wednesday morning kicked off with German GfK consumer confidence data (see economic calendar below) for January which beat expectations suggestive of a more upbeat outlook for the third consecutive print. With the dollar trading higher today, EUR/USD has managed to utilize this economic data to keep in the green this morning. Read next: Indonesia Has Potential In The Development Of Solar Energy| FXMAG.COM GBP/USD Cable Market price is down today. At the start of the day, GBP/USD traded above 1.2190 and is currently trading at 1.2130. The US Dollar regains some positive traction and turns out to be a key factor acting as a headwind for the GBP/USD pair. On the other hand, the British pound is weakened by the dovish outcome of last week's Bank of England (BoE) meeting. The US Economic Report includes the Conference Board's Consumer Confidence Index, due to be released later during the early North American session. This, along with US bond yields and broader market sentiment for risk, will weigh on USD price dynamics and provide some impetus to GBP/USD. After that, the focus will shift to the publication of final UK GDP figures for Q3. AUD/USD The Aussie Pair trading rebounds below $0.67 today. It is currently above 0.6675. The Aussie and The Kiwi (NZD) are among the most liquid of these carry trades and took the biggest hit when the BOJ badly wrong-footed a very thin market in the week before Christmas. A good recovery in global risk attitudes – indicated by the optimistic tone in equity markets – is seen as a key factor supporting the perception of riskier Australians. That said, the appearance of some US dollar purchases limits any significant gains for the AUD/USD pair. USD/JPY The USD/JPY Pair is currently trading at June levels. Latest data helped Yen with effect on USD/JPY trading level in range 131.73-131.76 The bears of the pair are waiting for a return to the downtrend The currency pair remains vulnerable amid mixed comments from Japanese authorities about the Bank of Japan's surprising policy move The Bank of Japan kept the policy equilibrium rate at -0.10% but adjusted its Yield Curve Control (YCC) by setting a range of +/- 0.50% around zero for Japanese government bonds (JGB) for up to 10 years. Previously, the YCC target was +/- 0.25% around zero. The bond market had been moving into the upper 0.25% band for some time amid speculation that the bank would have to step down at some point in the face of accelerating inflation. BoJ Governor Haruhiko Kuroda remained steadfast in preparations for yesterday's meeting that the policy would be resolutely upheld. Source: investing.com, dailyfx.com, finance.yahoo.com

USD/JPY on the 4-hour chart seems to be continuing its bearish bias after being corrected and testing the 131.78 level now in the near future USD/JPY will try to fall down towards the 130.58 level where the bearish bias of this major currency pair has been confirmed by its movement. is below the 100 EMA but if on the way down there is a sudden upward correction which exceeds the 132.53 level then the decline scenario described will become invalid and cancel by itself. Relevance up to 04:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116175

USD/JPY bounces off intraday low but stays mildly offered around four-month bottom. Yields struggle for clear directions, grinding lower off late, as BOJ announced another unchanged bond buying. Tokyo to pull Covid alert to the highest, PM Kishida pushes Japanese industry for more investment. US GDP, Treasury bond moves eyed for fresh impulse. USD/JPY picks up bids to consolidate intraday losses around 131.90 during early Thursday. Even so, the Yen pair remains mildly offered while reversing the previous day’s rebound from a four-month low. That said, the quote’s latest weakness could be linked to the mixed headlines from Japan, as well as sluggish US Treasury yields and the holiday mood in the market. Additionally challenging the USD/JPY traders is the cautious mood ahead of the key US data/events scheduled for release. Tokyo is up for the highest Covid alert as the virus cases in Asia major increased recently. The same should have pushed the Japanese government to revise growth forecasts for the fiscal year 2023. “Japan's real gross domestic product (GDP) is expected to expand 1.5% in the fiscal year beginning in April 2023, the government said in its new semi-annual projection, up from 1.1% in the previous forecast made in July,” mentioned Reuters. On the same line were comments from Japanese Prime Minister (PM) Fumio Kishida who pushed local industries for 100 trillion Japanese Yen investment as soon as possible. Elsewhere, talks of China’s higher budget deficit in 11 months join fears of a spending slowdown in Australia and geopolitical concerns relating to Russia-Ukraine to probe the sentiment. It should be observed that the Bank of Japan’s (BOJ) second unscheduled bond-buying also exerts downside pressure on the USD/JPY prices. Amid these plays, the US Dollar Index (DXY) traces depressed Treasury yields while the S&P 500 Futures remains mildly bid by the press time. Looking forward, the holiday mood could restrict USD/JPY moves but final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain the pair traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period. Technical analysis Unless providing a daily closing beyond the early December low near 133.65, the USD/JPY bears can keep attacking August month’s low surrounding 130.40 to aim for further downside.

USD/JPY Temporary Growth! The USD/JPY pair is trading at 131.91 at the time of writing. As you can see on the H1 chart, after its massive drop, the rate tried to rebound and recover. It has climbed as much as 132.45 where it has found supply. USD/JPY increased within a minor up channel. Dropping below the channel's downside line, below the uptrend line signaled exhausted buyers. The 132.45 yesterday's high represents an upside obstacle while the 131.56 immediate low represents a downside obstacle. USD/JPY Trading Conclusion! Dropping below the 131.56 obstacle could confirm a deeper drop. 130.64 represents a potential downside target.   Relevance up to 09:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305954

The US Dollar is weaker today as markets appear to be restoring their signal ahead of next week's holiday. Chinese words about stimulating economic growth strengthened risk sentyment. The Australian Dollar is the biggest gainer today as the generally more optimistic sentiment towards risky assets helped to bolster it. Later in the day, the focus will be on US GDP, which is expected to improve for the third time in a row, revealing a downside risk for the EUR/USD pair. In addition, central banks must balance the need to fight inflation with the risk of further deepening of the economic slowdown. EUR/USD EUR/USD keeps trading above 1.06 for another day. For a significant part of the day, the pair traded in the range of 1.0630-1.0660. It is currently trading below 1.0630, 1.0622 to be precise The euro has a strong start to Thursday's European session with the dollar weakening. In addition, de Guindos of the European Central Bank (ECB) upheld the hawkish narrative, stating that "50 basis points may soon become the new standard" to quell rising inflationary pressures in the eurozone. GBP/USD The cable pair dropped to 1.2040. The British pound traded around $1.21, down slightly from its recent six-month high of $1.2446 as investors weighed less hawkish BoE and economic outlook. Analysts mainly see the risk of the pound falling between now and the end of the year as the UK economy is stuck in stagflation conditions. The outlook for the UK is still pretty bleak. The UK economy contracted slightly more than originally estimated in the third quarter and business investment performed poorly, the Office for National Statistics said on Thursday. Household spending and business investment fell significantly, boosting expectations that the British economy was heading into recession. Most services sub-sectors experienced a slowdown, however, services output increased by 0.1% in Q3 2022, revised upwards from the first estimate of solid output. Compared to pre-coronavirus (COVID-19) levels, service output is now 1.3% lower than in Q4 (October-December) 2019. Read next: Credit Suisse Sold Building In Geneva | Visa Is Building Success At The Expense Of Small Retailers| FXMAG.COM USD/JPY USD/JPY dropped from 137.50 to 130.50 in no time. It has since stabilized. USD/JPY in the Asian session fell to around 131.70, in the European session the pair rose above 132.10. The yen firmed on Thursday, returning towards a four-month peak against the dollar hit this week after an unexpected tweak to the Bank of Japan's bond yield controls spurred bullish yen bets. Japan is the largest holder of government bonds and once again, if domestic yields move north, the world's largest debt market could be affected. The bank's new CEO is due to be appointed in April 2023, and there is a perception that he could pave the way for the new leader to tighten policy in the face of accelerating inflation. The yen is used as a funding currency by some investors, and the rise in Japanese yields changes the price dynamics for these participants. AUD/USD Yesterday, at the end of the day, the exchange rate was below $0.67, but closer to midnight it started to increase. The new day will start with an increase in the Aussie pair. It peaked at 0.6769, then you start to fall. Trading is at 0.6726 The sentiment-linked Australian dollar outperformed its major counterparts on Wednesday, benefiting from a cautious improvement in risk appetite. The aussie also benefited from a general weakness in the US dollar, as well as hopes for more pro-growth policy measures in China. Earlier in December, the Reserve Bank of Australia raised its policy rate by 25 basis points to 3.1%, taking borrowing costs to a level not seen in a decade. Source: dailyfx.com, investing.com, finance.yahoo.com

Yesterday, the yen was calm, its slow growth (growth of the USD/JPY pair which means that the dollar rose) did not face any resistance, so this morning it continues to gradually rise. The price is facing the 133.35 target, the nearest internal resistance line in the price hyperchannel of the monthly chart. The Marlin oscillator can grow without interruptions until it touches the zero line. From 133.35, a synchronous reversal of the price and the oscillator downwards, to the target of 130.58. Yesterday, the U.S. stock index S&P 500 fell by 1.45%, and if the yen, with the Bank of Japan's help, will push for its role as a safe haven, then the pair could fall further to support around 127.00. On the four-hour chart, the Marlin oscillator has already reached the zero line. But the price can still reach 133.35. The main movement is likely to occur after the Christmas holidays. Relevance up to 03:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330592

The USD/JPY pair rebounded after its amazing sell-off. Still, the rebound could be only temporary. The price action developed a potentially bearish pattern, so a new bearish momentum is in cards. Fundamentally, the Japanese National Core CPI rose by 3.7% matching expectations. Later today, the US is to release important economic figures. So, the fundamentals could really shake the markets. Core PCE Price Index is seen as a high-impact event and could report a 0.2% growth. Personal Income, Personal Spending, Durable Goods Orders, Core Durable Goods Orders, New Home Sales, and Revised UoM Consumer Sentiment will be released as well. USD/JPY Up Channel! Technically, the rate developed an up-channel pattern. As long as it stays above the minor uptrend line, the rate could approach and reach new highs. Now, it challenges the weekly S1 (132.78) static resistance (support turned into resistance). The 132.90 former high represents an upside obstacle as well. On the other hand, 132.14 stands as static support. USD/JPY Forecast! The USD/JPY pair could resume its growth if it jumps and closes above 132.90. This is seen as a buying signal. The channel's upside line represents an upside target. Dropping below 132.14 activates a sell-off and brings new short opportunities.     Relevance up to 07:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306096

USD/JPY struggles for a firm intraday direction and seesaws between tepid gains/minor losses. A positive risk tone, widening US-Japan rate differential undermine the JPY and offer support. Bulls, however, seem reluctant and prefer to wait for the US PCE data before placing fresh bets. The USD/JPY pair builds on the previous day's rebound from the 131.65 area and touches a three-day high on Friday, though lacks bullish conviction. The pair manages to hold steady around mid-132.00s through the early European session as traders keenly await the US Personal Consumption Expenditure (PCE) data before placing fresh directional bets. The Fed's preferred inflation gauge, the Core PCE Price Index is due for release later during the early North American session and will provide fresh cues on inflationary pressures. This, in turn, should play a key role in influencing the next policy move by the Fed and help determine the next leg of a directional move for the US Dollar. Heading into the key data risk, investors prefer to wait on the sidelines, leading to subdued range-bound price action around the USD/JPY pair. The downside, meanwhile, remains cushioned amid a recovery in the global risk sentiment, which tends to undermine the safe-haven Japanese Yen. Apart from this, a further rise in the US Treasury bond yields, bolstered by reviving bets for a more aggressive policy tightening by the Fed, acts as a tailwind for the USD and lends some support to the USD/JPY pair. Against the backdrop of a more hawkish commentary by the Fed last week, the upbeat US macro data released on Thursday fueled speculations that the US central bank will have to stick to its hawkish stance to tame inflation. This, in turn, pushes the yield on the benchmark 10-year US government bond closer to the monthly top. The resultant widening of the US-Japan rate differential could contribute to driving flows away from the JPY and supports prospects for some meaningful upside for the USD/JPY pair. That said, the Bank of Japan's recent policy tweak, widening the range for fluctuations in the 10-year government bond yield, benefits the JPY and warrants caution for bullish traders. Hence, it will be prudent to wait for strong follow-through buying before confirming that spot prices have bottomed out.

The Central Bank of Japan's recent actions appears to have been intended as a warning. As of today, the primary measure of inflation in Japan has increased even further and reached its highest level since 1981, which will undoubtedly increase market speculation that the Bank of Japan will shock the markets once more by altering its monetary policy in 2023. The Ministry of Internal Affairs reports that consumer prices in Japan increased by 3.7% in November compared to the same month last year. The Bank of Japan's primary index's results and the economists' evaluation were in agreement. The growth of the index was primarily driven by higher food prices, which even outpaced the growth of energy prices. It is clear that a variety of government initiatives, such as funding travel, contributed to keeping prices below 4%, but the battle against high inflation is far from over. Those who trade Japanese bonds barely responded to these data: Benchmark 10-year bonds and five-year securities both saw modest increases, which caused yields to drop by one basis point to 0.205%. The foreign exchange market hasn't undergone many notable changes either. Notably, core inflation has gone above the Bank of Japan's 2% target for eight straight months. The main trend is strengthening, as evidenced by the current level of inflation, which is 2.8% when fresh food and energy are excluded. Now, speculation that the central bank is on the verge of a policy reversal will continue to be supported by recent actions of Bank of Japan Governor Haruhiko Kuroda and recent data. Let me remind you that Kuroda shocked the markets at the beginning of the week when he announced that he would now permit the yield on 10-year Japanese bonds to rise to about 0.5%, which is twice the prior cap of 0.25%. All of this is a tactical maneuver to buy time before determining the future yield curve, which will change after the Central Bank's policy is altered next year when it is anticipated that interest rates will be raised. Many economists now anticipate that after the new governor assumes office, a policy change could occur as soon as next spring. Regarding the outlook for monetary policy, many analysts now predict that core inflation in Japan will reach 4% in December of this year before dipping to 2.7% in the first quarter of 2023 as a result of new government subsidies. Furthermore, data for January won't be available until after the Bank of Japan meeting in January, although economists anticipate that these subsidies will start to have a significant impact on inflation in that month. Regarding the USDJPY pair's technical picture, it is clear that the area around 130.20 serves as strong support over the long term. After the most recent news, the level of 121.10 will be the furthest goal. Its breakdown will trigger another significant sell-off in the vicinity of 126.20. It is not necessary to mention that the demand for the yen will decline in some circumstances right now. Regarding the EURUSD's technical picture, the demand for the currency is still quite weak, but there is still a chance that it will reach its December highs. To achieve this, a break above 1.0660 is required, which will cause the trading instrument to surge toward the new December high of 1.0700. You can easily climb to 1.0740 above this point. Only the failure of support at 1.0580 will put more pressure on the pair and drive EURUSD to 1.0540 with the possibility of falling to a minimum of 1.0490 if the trading instrument declines. Relevance up to 08:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/330634

The dollar fluctuated on Friday and was little changed in morning trading in London after two days of gains, as investors weighed up the outlook for interest rates following the release of stronger than expected U.S. economic data on Thursday. The dollar index has dropped more than 8% since hitting a 20-year high in September, with a sharp slowdown in U.S. inflation raising hopes that the Fed may soon end its tightening cycle. A second report said the U.S. economy rebounded in the third quarter at a pace faster than previously estimated. In today's economic calendar, the focus is solely on US economic data. EUR/USD The euro was up slightly against the dollar, standing 0.1% higher at $1.061, after slipping less than 0.1% on Thursday. The pair traded low yesterday around 1.06, sometimes falling below this level. Today, the pair is recovering and trading above 1.06 again, mainly in the 1.0610-1.0620 range GBP/USD The cable pair is trading around 1.20. It is now up and trading close to $1.21, 1.2070 to be exact. Yesterday, the price of the pair fell even below 1.20, today it is recovering, similarly to the euro pair. It grows especially during the European session. Yesterday’s UK GDP brought about the first quarter of negative growth for the UK economy in 2022. In addition, strike action in the UK, dishing household income in the midst of elevated inflation makes conditions tough for the Bank of England (BoE) but may likely end rate hikes sooner than the Federal Reserve. Read next: Migration Of Sports From Traditional Television To Streaming Is Chugging Ahead- The NFL Sunday Ticket On YouTube| FXMAG.COM USD/JPY USD/JPY holds trade above 132. And like the other major currency pairs, it is trading much higher today than it did at the end of yesterday. The Japanese yen was down 0.2% at 132.62 to the dollar. Yet the Japanese currency was on track for a weekly gain of around 3% after the Bank of Japan (BOJ) tweaked a key bond market policy earlier this week. Former deputy finance minister Eisuke Sakakibara said in an interview with Bloomberg that he sees USD/JPY could rise to 120. Earlier this year, he said USD/JPY could rise to 150. In October it was just over 152, its highest level since 1990. And maybe this time his predictions will come true. He also believes the BoJ may raise the yield curve control limit at the January meeting. Further tightening of monetary policy by the BoJ may not be what some market participants expect, and further hawkish attitude may come as a surprise. The Japanese yen is a little confused after CPI figures bring pressure on building prices for the country's archipelago. The headline CPI was the highest in 30 years and by the end of November amounted to 3.8% yoy. It was below expectations at 3.9%, but above standard at 3.7%. AUD/USD The Australian pair traded below $0.67 yesterday. Today she tried to cross that level again. I managed to get over it for a while. Currently, the pair is below $0.67, 0.6696 to be exact. The Australian dollar traded below $0.67 facing renewed pressure as better-than-expected US data bolstered the case for further monetary tightening from the Federal Reserve. Meanwhile, a recent rise in local bond yields has saved the Australian from further losses as an unexpected hawkish turn from the Bank of Japan fueled expectations that Japanese investors could shed Australian debt to bring some funds back home. Source: dailyfx.com, investing.com, finance.yahoo.com

The dust is beginning to settle after the Bank of Japan’s stunning move earlier this week.  At its policy meeting, the BoJ widened the yield curve on long-term bonds from 0.25% to 0.50%. The move blindsided the markets, which had anticipated a ho-hum BoJ meeting with no changes in policy. The announcement sent USD/JPY tumbling by over 500 points and has raised speculation that the BOJ could make further changes before BOJ Governor Kuroda wraps up his term in April. The yen has since settled down and the markets are keeping an eye on other releases. National Core CPI for November delivered as expected, as the 3.7% gain matched the consensus and ticked up from 3.6% in October. The BoJ also released meeting minutes, but these were from the October meeting. Some members voiced concern about the strong descent of the yen, saying it caused uncertainty and had many negative effects on the economy. It should be kept in mind that the yen was much weaker in October when these comments were made, but it does indicate that the yen’s strength is of concern to the BOJ. Another interesting comment was that the Bank needed to assess how the markets would react if the BoJ decided to exit its easy policy. After this week’s yield curve move, this point takes on added urgency, with rising speculation that the BoJ could tighten policy in the near term. Markets eye PCE Core Index In the US, there are a host of events today. The markets will be paying particular attention to the PCE Core Index, the Fed’s preferred interest indicator. The index is expected to slow to 4.6% y/y in November, down from 5.0% a month earlier. Personal Spending and Personal Income are also expected to soften. The US also releases durable goods, UoM consumer confidence and UoM inflation expectations. Investors will be paying close attention to the inflation and inflation expectation releases. The US posted strong numbers on Thursday. Unemployment claims rose to 216,000, up from 214,000, but investors liked that the reading was lower than the consensus of 222,000. As well, GDP for Q3 was revised upwards to 3.2%, up from 2.9% in the initial estimate. The solid is another indication that the economy is well-positioned to handle additional rate hikes, which the Fed has promised as it battles inflation.   USD/JPY Technical  USD/JPY is putting pressure on resistance at 132.83. Above, there is resistance at 134.12 There is support at 131.13 and 130.15 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The dollar weakened against most currencies in uncertain, weak trading on Friday as data signaled the US economy was cooling down somewhat, bolstering expectations of smaller interest rate hikes by the Federal Reserve and improving investors' appetite for risk. Excluding the volatile food and energy components, the PCE index gained 0.2% after rising 0.3% in October. The so-called core PCE price index rose 4.7% year-on-year in November, following a 5.0% increase in October. The Fed tracks PCE price indices for its monetary policy. The Fed is widely expected to raise interest rates by just 25 basis points at its next policy meeting in January, after a series of big hikes. USD/JPY The Jena/Dollar pair enjoyed a high level only on Monday, i.e. before the Bank Of Japan meeting. The pair's trade on this day was the highest of the week, with the day's highest trade reaching 137.4430. On Tuesday, the day of the Bank of Japan meeting, the pair dropped drastically and traded below 133. It also hit a low on that day, trading at 130.68. USD/JPY traded in the 132-133 range for most of the week. It closed the week at 132.8720. Against the yen, the dollar rose 0.4% to 132.82 yen. The dollar, however, was on track for a weekly drop of 2.8% after the Bank of Japan (BOJ) revised a key bond market policy earlier this week. In a surprise move, the Bank of Japan adjusted its yield curve control strategy this week, broadening the range where long-term Japanese yields are allowed to trade. Governor Kuroda downplayed the action as a mere "fine-tuning" of policy to ensure the smooth functioning of the domestic bond market, insisting that it was not really a tightening. Markets now expect the BoJ to leave negative rates by April, pricing in a 15bps rate hike that will bring rates back above zero. Then the new governor of the BoJ will take over, so investors are basically betting that the change of leadership will usher in a new era of monetary tightening in Japan. EUR/USD EUR/USD traded mixed. The weekly range was very wide 1.0580-1.0660. The highest level was recorded at the upper end of the weekly range, 1.0660, and the lowest level was read on Thursday and it was lower than the 1.0578 range. In terms of projected fundamental event risk until the end of 2022, last Friday's PCE deflator was arguably the last significant release. The Fed's preferred inflation reading fell from 6.1 to 5.5, while the core reading was in line with expectations, falling from 5.0 to 4.7 percent. GBP/USD Contrary to EUR/USD, the cable pair has been falling day by day this week. It peaked at the beginning of the week trading above 1.22, 1.2241 to be exact. The lowest level was below 1.20. GBP/USD's weekly low was at 1,996. These declines were significantly affected by the publication of UK GDP. Revised figures show the UK economy contracted more than initially thought in the three months leading up to September. The economy shrank by 0.3%, down from the previous estimate of 0.2%, as business investment performed worse than initially thought. Growth figures for the first half of 2022 have also been revised downwards. The UK is expected to fall into recession in the final three months of the year as soaring prices hit growth. AUD/USD The currencies of Australia, New Zealand and Canada strengthened against the US dollar. The Australian unit rose 0.4% to $0.6710 The Aussie pair mostly traded in the 0.6650-06750 range this week. It peaked on Thursday, with the pair trading high at 0.6768, while the week's low was well below the weekly range. The low of the week is 0.6638. The Australian will close the week at 0.6720. The main drivers were Chinese optimism about stimulating economic growth in 2023, as well as fluctuations in the USD based on US economic data. Markets may be a bit overreacting to global risk sentiment given the worsening COVID situation in China, which could put the Australian dollar at risk for further weakness in the coming week as well as in the first quarter of 2023. Source: investing.com, finance.yahoo.com

Since our last update, wave A of the expected A-B-C correction is about done and wave B is ready to take over for a corrective rally toward 141.25 from where wave C is likely to take over for a decline towards 119.10 and maybe even closer to solid support near 115.00. In the short term, we expect a second dip closer to 130.00 to complete wave A and set the stage for wave B to take over and start the corrective rally toward 141.25. Relevance up to 07:00 2022-12-28 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306393

USD/JPY is treading listlessly amid a quiet start to the holiday-shortened week. US Dollar drops with Treasury bond yields amid China-led risk-on mood. USD/JPY bulls need acceptance above 133.00 to resume the recovery. USD/JPY is trading on the defensive heading into the early European morning, as the Japanese yen traders take it easy after a volatile last week.   The downbeat tone around the pair could be partly due to a broad-based US Dollar weakness, fuelled by persisting risk flows and lower US Treasury bond yields. Reports that China is planning to scrap the quarantine rules for inbound travelers alongside further relaxation of restrictions boosted risk sentiment, weighing negatively on the safe-haven US Dollar. Light trading following the Christmas holiday weekend also left the USD/JPY pair gyrating in a narrow range below the 133.00 level so far. Markets refrain to place any fresh directional bets on the Japanese yen after the previous week’s surprise yield curve revision by the Bank of Japan (BoJ). The BoJ’s move caught markets off-guard and triggered a fresh sell-off in bonds and stocks globally before a ‘Santa rally’ kicked in the second of the week, helping calm market nerves. The pair will take cues from risk trends for any moves, as the US data docket remains relatively light amid a holiday-shortened week. From a short-term technical perspective, USD/JPY is failing to find acceptance above the 133.00 level, threatening recovery attempts. A sustained move above the latter is needed to extend the corrective upside toward the 133.50 psychological mark. However, the bearish 21-Daily Moving Average (DMA) cut the mildly bullish 200DMA from above, validating a bear cross on Friday. The 14-day Relative Strength Index (RSI) is sitting just above the oversold territory, backing the bearish potential. Friday’s low at 132.15 is the next downside target for sellers, below which the December 22 low at 131.64 could be retested. USD/JPY: Daily chart USD/JPY: Additional technical levels

Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar. China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia. As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite. Currencies in New Zealand and Australia also rose. It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend. Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception. USD/JPY The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30. The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ). That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards. EUR/USD In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend. EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China. Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level. Today's high level so far has been 1.0671.   GBP/USD GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday. GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar. China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases. It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions. Today, the situation of the cable pair is downside with the current trade at 1.2036. AUD/USD The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737. Source: investing.com,  finance.yahoo.com Data released by the US Bureau of Economic Analysis on Friday revealed that the Core Personal Consumption Expenditure (PCE) price index rose 0.2% m/m in November. The annual core PCE price index, the Fed's preferred measure of inflation, fell to 4.7% over the same period from 5% in October. Ahead of the Christmas break, Wall Street's major indices posted gains on Friday and failed to find demand for the US dollar. China has said it will lift quarantine requirements for incoming visitors, further easing three years of border controls to contain COVID-19. China's reopening, which also entails a resumption of Chinese tourist outbound trips, will boost the consumer and service sectors outside the country, particularly in nearby Southeast Asia. As a result, the dollar weakened significantly on Tuesday as most emerging Asian currencies strengthened and risk appetite. Currencies in New Zealand and Australia also rose. It is too early to tell how China's reopening will affect global economic activity, but there appears to have been a positive shift in risk sentiment after the three-day weekend. Attention will also focus on the US economic report, which will include the October housing price index and November data on the balance of trade in goods. Investors, however, are likely to ignore these numbers and focus on risk perception. USD/JPY The yen's strength didn't last long and I'm already seeing a slight increase in USD/JPY today. Today, USD/JPY is back to trading above 133. The pair is trading around 133.30. The weakness of the pair, however, does not excuse the recent mixed data from the US and Japan, let alone comments trying to challenge the political hawks at the Bank of Japan (BOJ). That said, Japan's unemployment rate fell to 3.5% in November from 3.6% previously expected, while the jobs/apprentices ratio again printed 1.35 in the month in question compared to 1.33 market forecasts. Moreover, retail trade growth fell to 2.6%YoY against 2.8% of market consensus and 4.4% previously revised upwards. EUR/USD In recent days, the currency pair has been trading in a short range between $1.0580 and $1.0650. Currently, it is trading slightly above this range, signaling an uptrend. EUR/USD has continued its move higher. The pair is taking advantage of US dollar weakness extensively as risk flows dominate further moves to reopen China. Taking advantage of the weakness of the US currency, the EUR/USD pair is up today and is trading around 1.0650, mostly just above that level. Today's high level so far has been 1.0671.   Read next:Shopping On Etsy Continues To Be Popular| FXMAG.COM GBP/USD GBP/USD lost its bullish momentum after encountering resistance near 1.2100 early in the European session on Tuesday. GBP/USD drops towards 1.2050 on light trading as UK markets are closed for Christmas. The pair is downplaying the risk sentiment surrounding China that is weakening the US dollar. China announced earlier in the day that it would lift quarantine requirements for travelers from January 8 as part of its reopening efforts. Over the weekend, Chinese officials said they would stop publishing daily revisions to the number of confirmed coronavirus cases. It is worth noting that the valuation of the US dollar through risk perception should continue to drive the pair's actions. Today, the situation of the cable pair is downside with the current trade at 1.2036. AUD/USD The Aussie trades in a strong tone on Tuesday, supported by positive market sentiment. The pair is rising for the third day in a row, extending its rebound from 0.6650. It is currently trading at 0.6737. Source: investing.com,  finance.yahoo.com

USD/JPY has slipped marginally to near 134.00, however, the upside is still favored amid uncertainty in the market. Federal Reserve might look for returning to policy easing led by the recent decline in retail demand and economic activities. The expression of loose monetary policy continuation in the Bank of Japan’s summary of opinions has weakened the Japanese Yen. USD/JPY may display more upside after a Rising Channel breakout and bullish signs from the momentum oscillator. USD/JPY pair has sensed long liquidations after a vertical rally around 134.40 in the early European session. The asset has corrected marginally to near 134.10, however, the corrective move seems healthy for the major as the market sentiment is still risk-averse. The Japanese yen pair is expected to resume its upside journey for recapturing the critical resistance of 135.00 ahead. Meanwhile, S&P500 futures are displaying a subdued performance as the market participants are getting anxious amid the festive mood. The 500 United States stock basket witnessed selling pressure on Tuesday led by weakness in technology stocks and a decline in International Trade Deficit. The return on 10-year US Treasury bonds has trimmed below 3.85% but is still showing promising signs of recovery ahead. The US Dollar Index (DXY) is struggling to surpass the crucial resistance of 104.00, however, the upside is still favored amid uncertainty in the global market towards the rapid reopening approach of the Chinese administration. Federal Reserve might return to policy easing sooner Recent decline in the United States Durable Goods Orders and Personal Consumption Expenditure (PCE) Price Index have delivered an expression of a slowdown in inflation expectations further. A sheer decline in the demand for durable goods, and consumption expenditure by households are critical for a decline in inflationary pressures. And now, a decline in Tuesday’s International Deficit as firms are restricting themselves from expanding operations due to higher interest obligations is going to compel the Federal Reserve to return to policy easing context sooner. On Tuesday, the US Census Bureau reported that Exports of goods for November were $168.9 billion, $5.3 billion less than October exports while Imports of goods for November were $252.2 billion, $20.8 billion less than October imports. This indicates a decline in overall economic activities, which might result in lower employment opportunities in the CY2023. United States economy is far from recession Market participants have been debating over the United States economy getting into recession and a higher Unemployment Rate to achieve price stability. As the Federal Reserve is hiking interest rates dramatically, economists have been compelled to trim Gross Domestic Product (GDP) projections and firms get restricted from executing of expansion plans. Thomas M. Mertens, a Researcher from the Federal Reserve (Fed) Bank of San Francisco’s Economic Research Department came out with a recession predictor based on macroeconomic time series, particularly the jobless unemployment rate. He cited that no predictors indicate an upcoming recession over the next two quarters currently. And, the jobless rate does not currently signal an impending recession. Bank of Japan’s Summary of Opinions favors easy monetary policy ahead In the Summary of Opinions by the Bank of Japan, the central bank cleared that widening of the yield band was meant to address distortion in 10-year Japanese Government Bonds (JGBs) pricing but this is not a step toward an exit from ultra-easy policy, as reported by Reuters. The expression from the Bank of Japan’s summary of opinions indicates that the central bank must maintain the easy policy as the Japanese economy is in a critical phase in hitting the price goal. No doubt, the economy is showing signs of wage rises, and a positive economic cycle but it is appropriate to maintain an easy policy for time being. USD/JPY technical outlook USD/JPY is on the verge of kissing the horizontal resistance plotted from the December 14 low around 134.52. The US Dollar is extremely strong as the asset has delivered a breakout of the Rising Channel chart pattern formed on an hourly scale. The pair has scrolled above the 200-period Exponential Moving Average (EMA) at 133.88, which indicates that the long-term trend has turned bullish. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which signals that the upside momentum has been triggered.     search   g_translate    

The Japanese yen continues to lose ground this week and is in negative territory on Wednesday. In the European session, USD/JPY is trading at 134.11, up 0.49%. Post-Christmas holiday trading remains thin, but USD/JPY has made steady gains and climbed 1% this week. The US dollar has recovered somewhat after last Tuesday’s slide when it fell a staggering 3.8% after the BoJ widened its yield curve band. The move blindsided the markets, which had not expected any major policy moves prior to the end of Governor Kuroda’s term in April. Summary of Opinions – no exit from loose policy Investors were all ears as the BoJ released today the summary of opinions from last week’s dramatic meeting. The summary of opinions showed that several of the nine board members said that the tweak to yield control was aimed at enhancing the current stimulus programme rather than ending it. This reiterated what Governor Kuroda stated in a press conference after the meeting. Still, speculation remains high that the BoJ could take further steps that tighten policy, and even exit the Bank’s ultra-loose policy, especially with inflation running at a 40-year high. The summary of opinions indicated that members discussed rising inflation and the possibility that higher wages would remove the risk of a return to deflation. The BoJ has been focused on wages, arguing that strong wage growth will ensure that inflation is sustainable, as opposed to inflation that is driven by higher costs for energy and raw materials. The government is also making wages a top priority, and there are indications that major companies and labour unions will negotiate higher wages in the spring. If the BoJ sees that wages are rising it could raise its yield curve control target, which is currently around 0% for 10-year bonds. The BoJ will likely be back in the headlines shortly, with its next meeting on Jan. 17th and 18th. Read next: Leading Used Tesla Prices Fall Faster Than The Market| FXMAG.COM USD/JPY Technical  USD/JPY is testing resistance at 134.12. Above, there is resistance at 134.82 There is support at 133.25 and 132.29 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

Data on the US housing market will be in the spotlight, and with the housing recession dominating recent headlines, these indicators will provide important information on the health of the US housing market. What's more, the optimism around China and the easing of Covid protocols has dimmed a bit since yesterday after rumors that the US may impose new restrictions on travelers from China. This is because US officials are concerned about the lack of "transparent" data coming from Beijing. USD/JPY The dollar gained against the yen by as much as 0.67% to 134.40 In the morning of the Asian session, the USD/JPY pair rose above the 134 level. This level did not last long and the pair returned to trading at 133. In Asian trade, the highest since December 20, when the BOJ caused the pair to fall sharply as a result of an unexpected loosening of the yield band on 10-year Japanese government bonds. On that day, the yen posted its biggest one-day gain against the dollar in 24 years, closing 3.8% higher on the day as traders speculated on an eventual withdrawal of the stimulus. Now, the yen has also come under pressure after the Bank of Japan signaled last week's surprise policy change did not mark the beginning of a broader withdrawal of monetary stimulus. BJ Governor Haruhiko Kuroda said that "The Bank will pursue the target price in a sustainable and stable manner, accompanied by wage increases, by further easing monetary policy under the control of the yield curve." Meanwhile, Kuroda expressed hope that ongoing labor shortages would encourage companies to raise wages, and said conditions in the Japanese labor market were expected to tighten further. GBP/USD The situation on the cable market has improved. The pair in today's trading was on the rise. Currently, the pair is approaching the level of 1.21. EUR/USD EUR/USD is trading above 1.0630 today. It is currently maintaining its high level above 1.0650. Maintaining support for EUR/USD has recently been more hawkish rhetoric from the European Central Bank (ECB) compared to the US Federal Reserve (FED). ECB policymaker Klaas Knot reiterated this in an interview yesterday, stating that between now and July 2023 it would provide “a pretty decent rate of tightening. Fudge warned that doing too little remains a greater risk with a slowdown to 50 basis points, giving the central bank time to assess the impact of rate hikes. In the rare positive nexus that has been talked about, the worst may already be behind the Eurozone, and the potential recession, if it does occur, will be relatively shallow and short-lived. AUD/USD The Aussie pair is in an uptrend on the daily chart. AUD/USD is trading close to 0.68. The gains were short-lived and the Australian currency is now facing resistance. Australian and New Zealand dollars fluctuated on Wednesday as initial optimism from China, which reopened its borders after three years, gave way to greater volatility over global growth prospects. Australian government bond yields rose as markets reopened after Christmas, catching up with their overseas counterparts. Source: finance.yahoo.com, investing.com, dailyfx.com

USD/JPY Uptrend Intact USD/JPY dropped a little but it could still resume its uptrend as long as it stays above the uptrend line. Technically, the uptrend line represents a downside obstacle. The 134.52 former high stands as an upside obstacle (resistance), while the 133.49 former low represents a static downside obstacle (support). The current retreat could be only a temporary one before resuming its growth. The rate could test and retest the near-term downside obstacles before jumping higher. USD/JPY Trading Conclusion As long as it stays above 133.49 and above the uptrend line, USD/JPY could come back higher at least towards the 134.52 former high. An upside continuation could be activated if the price passes above 134.52. Relevance up to 07:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306697

Summary:  USDJPY bounced from strong support but still in a down trend. The pair needs to break bullish out of falling channel for 140EURGBP testing key resistance at 0.8867. Upside potential to 0.92GBPUSD broken out of rising wedge but sellers have failed to take control. 1.19 support is key USDJPY bounced off support area 131.49-130.38 and the lower trendline in the falling channel like pattern. Divergence on RSI indicates that could have been the lows for now. There is still negative sentiment however, but if USDJPY breaks above the upper falling trend and back above 200 daily SMA there could be short-term upside momentum to 140-141.25.If USDJPY slides back and closes below 130.38 it is likely to fuel a sell-off down to around 126.35 . That scenario is likely to unfold if RSI also breaks below its lower rising trendline.   All charts and data : Saxo Group EURGBP has at first attempt been rejected at the resistance at around 0.8867. A close above could move the pair for 0.92 i.e., same distance a wide sideways consolidation area illustrated by the vertical arrows.However, if EURGBP slides back below 0.8754 it could stay range bound for quite some time.RSI is showing positive sentiment however and all Simple Moving Averages (SMA) are rising i.e., showing underlying bullish sentiment indicating we are to see higher levels in EURGBP. GBPUSD broke bearish out of its rising wedge like pattern now hovering around the 200 daily SMA. Bears don’t seem to be able to push the pair lower. RSI is still showing positive sentiment and there is no divergence indicating we could see a GBPUSD moving higher and have another attempt reaching resistance 1.2667.If sellers succeed in pushing GBPUSD below 1.19 that could change and give them more energy to push GBPUSD down to around 1.1629. Medium-term pictureGBPUSD got rejected at the 55 weekly SMA which is dropping sharply and has not managed to close a week above resistance at 1.2293. Weekly RSI is still showing negative sentiment indicating GBPUSD bounce from September trough has run its course and lower levels is in the cards. GBPUSD could slide back down to around 1.14For GBPUSD to gain further upside a weekly close above 1.2293 is needed combined with RSI closing above 60 threshold.       RSI divergence explained: When  price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend Source: Technical Update - USDJPY, EURGBP & GBPUSD | Saxo Group (home.saxo)

The dollar weakens on Thursday after gaining in the previous session, and investors were nervous towards the end of the year as initial optimism about China reopening has faded. China's reopening was initially met with applause in global markets, giving a boost to the commodity complex and risk assets in general, however, the rising number of COVID cases flooded local Chinese hospitals, adding to the level of concern for a positive reopening. What's more, the Asian stock market is also influenced by information from China. Asian stocks weakened slightly on Thursday as soaring COVID cases in China alarmed investors and cast doubt on the chances of a quick recovery for the world's second-largest economy after the easing of stringent COVID-related restrictions. From the USD's perspective, labor market data is scheduled for later today. Weekly initial jobless claims will be the only data appearing in the US economic report. Although expectations are slightly weaker than the previous reading, if the actual data is in line with these forecasts, the impact on the dollar breakout should be minimal given the minor changes. USD/JPY The Bank of Japan announced an unplanned bond purchase operation for the second time during the day, trying to limit yields. The Central Bank offered purchases of unlimited amounts of 2- and 5-year bills and a daily offer to buy 10-year debt at 0.5%. The BoJ faces an increasing challenge as it plans to increase its planned bond purchases in Q1 2023 by 23%. Although yesterday during the US session USD/JPY exceeded 134, today it is trading well below 133.80. Read next: The First Technical Problems Of Twitter Under The Leadership Of Elon Musk, Tesla Shares Worst Of The Year| FXMAG.COM AUD/USD The uplifting Australian dollar has danced to the rhythm of global factors recently. The Australian and New Zealand dollars struggled to recover on Thursday after failing to sustain overnight gains as concerns over the global interest rate outlook outweighed optimism over China easing COVID-19 restrictions. Faced with a scarcity of major market catalysts, the Australian pair (AUD/USD) lay flat. Thus, the Aussie failed to break the resistance at around 68. Today, the pair is trading above 0.6710 The futures market now suggests the Reserve Bank of Australia may be more aggressive than previously thought as traders price in a higher peak of around 4% by September next year, down from 3.6% just a week ago. They also suspect the RBA will not cut rates until 2024. EUR/USD The EUR/USD pair traded mostly in the range of 1.0620-1.0630 in the morning, sometimes falling below the lower limit. Currently, the pair is trading around 1.0640. EUR/USD fell below 1.0650 in the second half of the week as the risk aversion of the market environment helped the US dollar find demand. However, the pair remains within its horizontal trading range and the technical outlook offers no directional guidance for now. GBP/USD GBP/USD managed to rebound and climb towards 1.2050 early Thursday after falling to the 1.2000 area late Wednesday. The pair's short-term technical picture suggests buyers are still hesitant to commit to a steady recovery. The cable pair trades below $1.21. Mostly trading on the daily chart is below 1.2050. Source: investing.com, dailyfx.com, finance.yahoo.com

The Japanese yen has posted gains on Thursday, putting the brakes on this week’s dollar rally of over 1%. In the European session, USD/JPY is trading at 133.64, down 0.60%. This week has been marked by low liquidity, with many traders closing their books or taking a holiday at the end of the year. Japanese markets have been open all week, and USD/JPY has shown more movement than the other majors. BOJ defends yield curve target In a week that has been light on economic releases, the Bank of Japan has provided plenty of material for the markets. The BoJ shocked the markets last week when it widened the yield curve band on 10-year bonds, from 0.25% to 0.50%. The move had the same effect as a rate hike and sent the yen sharply higher. After the move, Governor Kuroda said that the tweak was aimed at making the yield curve more sustainable rather than removing it. Investors remain unconvinced, with speculation rising that the BoJ could raise the cap to 0.75% or eliminate its yield curve control altogether. The BoJ has tried to dispel speculation that further changes to the yield curve are on the way. The Bank announced on Wednesday and again today unlimited bond purchases, with the aim of defending its yield curve target, which is around 0% for 10-year bonds. The tweak on the yield curve band did not affect this target, which the BoJ has insisted will remain in place. What we are seeing here is a continuation of a cat-and-mouse game between the BoJ and investors, with each side testing the resolve of the other. In October, the yen fell close to 152 before the Ministry of Finance intervened in the currency markets and propped up the yen. Inflation is on the rise in Japan and has climbed to 3.7%, a 40-year high. The BoJ, however, remains unconvinced that inflation is sustainable unless accompanied by stronger wage growth. If labour agreements in early 2023 result in higher wages, the BoJ could raise its yield curve control target, which would be a massive change in policy. Read next: EUR/USD Pair Remains Within Its Horizontal Trading Range, The Aussie Failed To Break The Resistance At 0.68| FXMAG.COM USD/JPY Technical USD/JPY tested support at 133.62 earlier. The next support level is 132.62 There is resistance at 134.86 and 135.98 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

USD/JPY justifies weekly support break to print two-day downtrend. Bears approach eight-month-old horizontal support area before poking the latest multi-month low. Descending trend line from October, 21-DMA restricts immediate upside. USD/JPY drops for the second consecutive day after reversing from a two-month-old descending resistance line, down 0.35% intraday near 132.60 during early Friday. In doing so, the Yen pair also justifies the previous day’s downside break of a one-week-old ascending support line, now resistance around 133.90. That said, the quote is declining towards a horizontal support zone comprising multiple levels marked since April, around 131.50-30. However, the pair’s further declines past 131.30 appear limited due to the sluggish MACD signals. In a case where the USD/JPY breaks the 131.30 support the recent bottom surrounding 130.55, also the lowest level in four months, will be in focus. Also likely to challenge the USD/JPY bears is the August month’s low near 130.40 and the 130.00 round figure, a break of which could quickly drag the quote towards May’s low near 126.35. Alternatively, the immediate support-turned-resistance line, around 133.90, guards short-term USD/JPY recovery. Following that, a downward-sloping resistance line from October 21 and the 21-DMA could challenge the bulls around 134.20 and 135.00 respectively. It’s worth noting, however, that a convergence of the 200-DMA and the 61.8% Fibonacci retracement level of the pair’s May-October upside, near 136.25, appears a tough nut to crack for the USD/JPY buyers. USD/JPY: Daily chart Trend: Further downside expected

As we enter the final trading day of 2022, the rebound in the dollar index can be attributed in part to investor repositioning as markets remain cautious ahead of the long weekend. The lack of data this week left markets fueled by renewed tension between Russia and Ukraine, as well as mixed sentiment around rising Covid numbers in China. EUR/USD The EUR/USD pair in the European session exceeded the level of 1.0680. It is currently trading just below that level - 1.0679 EUR/USD surged towards 1.0700 during European trading hours before pulling back slightly. The renewed weakness of the US dollar on the last trading day of the year seems to be helping the pair stay in the red in the absence of fundamentals. In the absence of high-impact macroeconomic releases, investors are unlikely to take large positions on the last trading day of the year. Data from the euro zone showed Spain's Harmonized Index of Consumer Prices fell to 5.6% on an annualized basis in its preliminary December reading from 6.7% in November. However, these data did not have a noticeable impact on the behavior of the euro against rivals. The ISM Chigao Purchasing Managers Index for December will be the only data to appear in the US Economic Report. GBP/USD The Cable pair is trading at 1.2050 now. GBP/USD managed to climb above 1.2050 early Friday after breaking a two-day streak on Thursday. As trading conditions remain weak on the last trading day of the year, the pair may struggle to make a firm move in either direction. Despite cautious market sentiment, the US dollar is struggling to find demand on Friday and is helping the pair limit their losses. Fears of recession in the UK are likely to limit sterling growth in Q1 2023, especially if the housing market continues to deteriorate. In theory, the impact on the GBP should be negative, with lower housing demand resulting in softer inflation and a more dovish Bank of England (BoE). Read next: TC Energy Corp Has Announced That It Is Aiming To Fully Reactivate The Keystone Oil Pipeline System After The Largest Reported Spill In The Pipeline's History| FXMAG.COM AUD/USD The Aussie pair was heading above 0.68 today and it managed to do so, but failed to maintain the level. At the time of writing, the AUD/USD pair is trading below 0.68 at 0.6794. The Australian dollar is set to fall in 2022, falling for a second consecutive year as the US Federal Reserve's aggressive monetary tightening, China's economic woes and slowing global growth have affected the currency. The Reserve Bank of Australia has also made a radical policy change after committing late last year to keeping the cash rate at a record low of 0.1% in 2022. The RBA has now raised the cash rate to 3.1%, its highest since November 2012, and said it expects further tightening as part of ongoing efforts to bring down inflation. USD/JPY USD/JPY is trading below 132 on the last trading day. In October, the yen fell to a 32-year low of nearly 152 per dollar as the Bank of Japan maintained its ultra-low interest rate policy while the US Federal Reserve began an aggressive monetary policy tightening campaign to curb rising inflation. However, the currency recovered about half of those losses as Japanese authorities intervened in the FX markets and defended the yen in the last quarter of 2022, while the BOJ unexpectedly raised the upper end of its 10-year government bond tolerance range to 0.5% from 0.25 % in December. Source: investing.com, dailyfx.com, finance.yahoo.com

The Fed and central banks around the world have been raising interest rates to fight soaring inflation stemming from supply chain problems related to the COVID-19 pandemic and an energy crisis related to oil producer Russia's Ukraine invasion. As a result, all three major averages registered their biggest one-year percentage declines since the 2008 financial crisis. Along with domestic worries, investors around the world have also been monitoring China, the world's second biggest economy, for signs of weakness. The dollar was on track to record its best year since 2015 on Friday on the last trading day of the year, dominated by Federal Reserve rate hikes and fears of a sharp slowdown in global growth. Since March, the Fed has raised interest rates by a total of 425 basis points in an attempt to stem rising inflation. The last trading week of the year is behind us. How the major currency pairs fared. GBP/USD The cable pair ended the last week of the year in bullish sentiment. The week the GBP/USD pair started trading below $1.21 at 1.2050. The pair traded mostly in the 1.20-1.21 range. The highest level of the pair reached the level above the upper limit of the crossbody, i.e. 1.2113. The highest was at 1.2003 and came before the weekly high. The British pound ended 2022 nearly 11% lower at $1.2, its worst year since the Brexit vote in 2016, amid a general cautious mood regarding the economic outlook for 2023, political uncertainty, and as a hawkish Fed sent the USD higher. The pound recovered since then after Rishi Sunak became the new prime minister but remains under heavy pressure, as the recession is looming while the Bank of England appears more dovish compared with its peers. Read next: ESG - Business Management For The Common Good| FXMAG.COM  EUR/USD EUR/USD traded above 1.06 but below 1.07. The pair started the week at 1.0630 and ended at 1.0712. The highest level reached at the end of the trade exceeding 1.07. The lowest level was still above 1.06 - 1.0611. AUD/USD The Australian pair, similarly to the euro pair, managed to break the upper level of resistance, which was at the level of 0.67. Thus, the couple ended the week on the highest level. The lowest level was at the beginning of the week (0.6699). Then the pair received support from information from China and thus grew above 0.67. USD/JPY The USD/JPY pair traded mostly around 132. It peaked above 132 at 134.420 and the low was below 131 (130.8210). The pair ended the last week of the year at 131.1050 The Bank of Japan (BOJ) is considering raising its January inflation forecast to show price growth close to its 2% target for fiscal years 2023 and 2024, the Nikkei reported on Saturday. This month, the BOJ launches an extension of its 10-year yield caps, which is officially intended to straighten out bond market disruptions, but some analysts see them as a way out of ultra-loose monetary easing. Japan's core consumer prices excluding fresh food in November hit their highest since 1981, according to last week's government data. The BOJ will release its latest quarterly growth and price forecasts after its next policy meeting on Jan. 17-18. Source: finance.yahoo.com, investing.com, dailyfx.com

USD/JPY only needs a small dip below 130.56 to complete wave A and set the stage for a temporary rally in wave B towards resistance in the 141.25 - 143.78 area before wave C takes over for a decline toward 113.90. This will likely complete an X-wave and call for renewed upside progress in USD/JPY. That said, we will as always take baby steps and start by looking for the small dip to just below 130.56 to complete wave A and set the counter rally in wave B towards 141.25.   Relevance up to 06:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306962

USD/JPY is expected to surrender the 131.00 support as the USD Index has faced immense pressure. The FOMC minutes will provide a detailed explanation of December’s monetary policy decision. The BOJ is considering raising its inflation targets to 2% for CY2023 and 2024. The USD/JPY pair is hovering around 131.00 after a less-confident rebound from 130.78 as settled on Friday. The asset is hoping for a continuation of weakness, which might drag the asset again below the immediate support of 131.00. The major is likely to face significant heat amid weakness in the US Dollar Index (DXY). The USD Index remained in the grip of bears on Friday after surrendering its trading range of 103.47-104.57. The consolidation of two weeks displayed a breakdown as investors poured liquidity into risk-perceived currencies led by declining inflation expectations for CY2023. Analysts at Natixis cited the monetary policy expression by the Federal Reserve (Fed) is a restrictive one as the mortgage rate is higher than nominal wage growth in the United States economy. While S&P500 remained choppy on Friday as the trading activity was trimmed dramatically amid a festive market mood but ended on a subdued note. The 10-year US Treasury yields advanced further to 3.88% as the demand for government bonds dropped. This week, the critical event that will support the USD Index in gauging a decisive move will be the release of the Federal Open Market Committee (FOMC) minutes. The FOMC minutes will provide a detailed explanation of December’s monetary policy decision. Apart from that, the market participants will keep an eye on cues about economic projections and likely monetary policy action by Fed chair Jerome Powell ahead. On the Tokyo front, clear inflation projections for the next two years by the Bank of Japan (BOJ) are supporting the Japanese Yen. Nikkei reported on Saturday that the BOJ is considering raising its inflation forecasts in January to show price growth close to its 2% target in fiscal 2023 and 2024

Summary:  Today, we look at how markets closed last year, noting the weakening of the US dollar in to year-end even as US treasury yields backed up into year end. Despite those higher yields, USDJPY trades near multi-month lows in anticipation of the Bank of Japan and the Fed moving in opposite directions with their policy for the balance of this year. Elsewhere, we dive into commodity positioning and the energy market as mild weather continues to drive gas and power prices down in Europe while crude oil actually rallied. A look at energy stories to track this year and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: First weeks of a New Year often pivotal | Saxo Group (home.saxo)

The yen started 2023 with modest gains on Monday as traders weighed the risk of further technical strength amid thin holiday trading. The Japanese currency rose 0.3% to 130.77 per dollar in early trading in Tokyo. A close below the dollar-yen's August low of 130.41 would open up the door for further declines in the pair, according to chart watchers. Some investors were opening small short-dollar positions in case a break occurs in the absence of normal market liquidity, said some Asia-based currency traders familiar with the transactions who asked not to be named because they were not authorized to speak publicly. The yen is up about 16% from its October low amid government intervention, hopes for slowing US rate hikes and speculation about a possible policy shift from the Bank of Japan this year. The BOJ's unexpected December decision to tweak its yield curve control parameters is seen by many as a sign that its ultra-easy monetary policy might soon be coming to an end. Read next: Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM Relevance up to 09:00 2023-01-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331287

Summary:  The year is starting off with the US dollar on its back foot even as US treasury yields rose into year end as the market continues to believe that we are nearing the end of the Fed rate hike cycle, with easing to follow, while the ECB has grown increasingly hawkish and the Bank of Japan is seen further adjusting its policy mix under new leadership from early Q2. Will the first key data of 2023 on Friday play well with the market’s strong convictions? Today's Saxo Market Call podcast.Today's Market Quick Take from the Saxo Strategy Team FX Trading focus: USD stumbles into the New Year, with sterling also on its back foot. The JPY has risen to the top of the heap on the anticipation of a further shift in BoJ policy after Governor Kuroda’s exit in early April. Even with US yields backing up into year – particularly at the longer end of the curve – the market continues to express view is that the Fed is set for peak policy rates at the March or May FOMC meeting, followed by eventual cuts as soon as Q4. This has been the case for some time, with the only new information available in the last days of 2022 a particularly strong US Consumer Confidence reading for December that is rather out of synch with an anticipated dip into recession in the US. End-of-quarter and end-of-year flows may have been behind the surge in treasury yields and the weakening of the greenback, so we will need at least this week for a sense of how things are shaping up, and the most interesting test of the market’s conviction would be another batch of stronger than expected jobs and especially earnings data and another strong ISM Services print this Friday. Another important factor for the US dollar in the opening weeks to a couple of months of this year is the debt ceiling fight and how much brinksmanship the weak GOP majority in the US House is willing to engage in. As the ceiling approaches, the US Treasury runs down its general account with the Fed, currently at $400+ billion and capable of being run down to $100 billion or less, which is a net boost to USD liquidity. Once the ceiling is inevitably raised, with or without concessions from the Biden administration, the opposite effect swings into gear as the Treasury then builds its account again, sucking liquidity out of the market. EUR and especially JPY strength. The drivers (and some of the irony) of sharp JPY strength are discussed with the look at the USDJPY chart below. The driver of a strong euro into year-end was ECB President Lagarde finally getting religion on the inflation fight here very late in the cycle. The strongest evidence of how the market sees a divergence in the Fed vs. ECB forward is in something like the far forward 3-month short-term-interest rate contracts, which suggest that by the end of 2024, the Fed policy rate will be little more than 50 basis points above the ECB’s policy rate, at something like 3.50% for the Fed and just under 3.00% for the ECB. This has narrowed from well over 100 basis points in early November and something like 180 basis points early in 2022. A factor tempering the upside euro potential is concern that the ECB won’t be able to deliver as much as it would like for the market to believe it is capable of without triggering an ugly new aggravation of peripheral spreads as a weak economy like Italy’s can’t fund itself at 3% without QE. Italian Prime Minister Meloni has already http:been out complaining against the ECB’s communication style and the ESM. Read next: The First Trading Day Of 2023: GBP/USD Is Trading 1.2051, USD/JPY Pair Below 131, The Aussie Pair Is Around 0.68 And EUR/USD Above 1.0680| FXMAG.COM Chart: USDJPY USDJPY tanked into year-end, nearing the recent cycle lows even as US long treasury yields climbed into year-end. For most of 2022, long US yields were a very reliable coincident indicator, but the market has its sights next year on the decelerating Fed hikes that it eventually sees turning into rate cuts, while the Bank of Japan is seen further tinkering with its policy in the direction of tightening, particularly once Governor Kuroda’s replacement is found after his early April exit. Ironically, the anticipation of a BoJ shift is resulting in enormous QE to enforce the current regime. When yields were on the rise last year and the US 10-year yield first hit the current level of 3.85% in late September, the USDJPY rate was near 145.00. From here, the current USDJPY trajectory can only find support from a follow through from the BoJ in the direction of tightening (incrementalism remains a risk there) and a world that is diving into a classic disinflationary recession, with the Fed continuing to get marked lower. The challenge for this assumption would be a far stronger than expected global economy, with resilient US activity for another couple of quarters and inflation and a fresh surge in energy prices. Source: Saxo Group Overnight, we got a miserable official Non-manufacturing PMI for December from China as the end of Zero Covid early last month is likely reaching peak impact now and through the next few weeks, followed by a likely strong resurgence in Chinese demand. How the Chinese policy and its economy shapes up on the other side of the early Lunar New Year holiday (January 23) will be an important factor in how 2023 shapes up. Table: FX Board of G10 and CNH trend evolution and strength.The US dollar and sterling starting off the year in worst shape. The latter may be a durable theme this year as the Bank of England is set for QT – a tricky proposition for a twin deficit country that will have to find buyers of its paper outside of the country. Elsewhere, the outsized JPY strength is the most prominent development as this year gets under way. It looks excessive relative to the recent rise in global bond yields. CAD is paying for the Bank of Canada’s dovishness, but oil is a bit resurgent. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Note that the “ATR heat” is fading to light orange (second quintile of last 1000 observations) for about half of the pairs tracked here as volatility has eased in recent weeks. Will be watching USD and JPY pair status over the coming week or two for developments, which are often important on calendar year rolls, as emphasized for EURUSD in my most recent FX Update. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights US Markets Closed 0145 – China Dec. Caixin Manufacturing PMI Source: FX Update: USD stumbles into the New Year. | Saxo Group (home.saxo)

Central banks and inflation remain the focus of the markets, as well as signals indicating how long and deep the recession may turn out to be. The Euro area economy also heading into recession, concerns over winter gas supplies have eased meaning the slowdown may not be as severe as feared just a few months ago. The first trading day of the year was subdued with many countries, including major shopping malls such as the UK and Japan, closed for the holidays. The dollar strengthened on Monday, moving away from its recent six-month lows against a basket of major currencies for the time being. This week, the critical event that will support the USD Index in gauging a decisive move will be the release of the Federal Open Market Committee (FOMC) minutes. The FOMC minutes will provide a detailed explanation of December’s monetary policy decision. Once trading conditions normalize and major markets return to operation on Tuesday, safe harbor flows could begin to dominate financial markets. In this scenario, the US dollar is likely to hold its ground against its risk-sensitive rivals. USD/JPY The USD/JPY pair is trading below 131 on the daily chart. It is trading in a narrow range of 130.75-130.80. On the Tokyo front, clear inflation projections for the next two years by the Bank of Japan (BOJ) are supporting the Japanese Yen. GBP/USD The cable pair is trading at 1.2051 at the time of writing. On the daily chart, the pair is moving in a narrow range. Following the modest rebound witnessed on the last trading day of 2022, GBP/USD came under subtle bearish pressure and declined toward 1.2050 on the first trading day of 2023. Nevertheless, trading action remains relatively subdued in the absence of data releases. Read next: Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years| FXMAG.COM EUR/USD After falling towards 1.0650 in the early morning hours in Europe on Monday, EUR/USD managed to rebound towards 1.0700. Thanks to Friday's increases, the pair closed the previous six weeks in the black. Currently, the pair is trading in a range below 1.07, to be precise 1.0686 Meanwhile, the S&P Global manufacturing PMI for the Eurozone was 47.8, in line with market expectations and preliminary estimates.  On the negative side, Germany's S&P Global Manufacturing PMI was 47.1, slightly below the initial estimate of 47.4. In the rest of the day there will be no publication of important macroeconomic data. Eurozone and US bond and equity markets will be closed for the New Year holiday, suggesting EUR/USD is likely to trade in a narrow channel in the second half of the day. AUD/USD Similarly to the euro, the Australian failed to maintain the high level seen at the end of the year. Today, it mostly traded above 0.68, but has now fallen below that level. Trading just below 0.68, at 0.6798 Source: investing.com, finance.yahoo.com

We have seen the expected break below the former low at 130.56. This should be the final decline in wave A. We should see wave B take over anytime now for a corrective rally towards 141.25 and perhaps closer to the 61.8% corrective target at 143.78. In the short term, a break above minor resistance at 130.33 and more importantly a break above resistance at 131.40 will confirm that wave A has been completed and wave B is in progress towards 141.25. This is not the time to go short USD for more downside progress. Relevance up to 06:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307097

Ulrich Leuchtmann, Head of FX and Commodity Research at Commerzbank expresses his take on the impact of the Bank of Japan (BoJ) bond purchases on the Japanese Yen. Key quotes “The Bank of Japan’s (BoJ) decision to allow higher JGB yields had spontaneously been interpreted as the beginning of the end of ultra-expansionary monetary policy not only by me.“ “It seemed to be the general interpretation. In the meantime the market no longer seemed to be 100% certain whether that was correct. Because the BoJ justified its explanation with purely market-technical reasons. USD-JPY temporarily traded with a 134 handle.” “However, in particular the fact that Japanese central bankers will have to defend the new upper limit for JGB yields with even more determination resulted in a reversal. USD-JPY is once again trading at levels around 131.00 (while I write this), so roughly where the currency pair was trading following the BoJ decision.”  

Summary:  Today, we remind traders that the market action doesn't really start for much of global liquidity until today's opening of UK and US markets, with Japan not even set to start trading until tomorrow. This makes the JPY volatility in particularly difficult to interpret in thin markets. Most of the USD move that has unfolded this morning did so during and after the recording of this podcast, but we suggest that it is important to wait for the US data on Friday for a firmer sense of where the market stands on the US dollar and other markets, including gold. Today we also discuss the important year ahead for Tesla, with more products and platforms in the mix than at any time in its history, contrasting its outlook with that of Volkswagen. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Read next:The Korea Fair Trade Commission (KFTC) Will Impose A Fine Of $2.2 Million On Tesla Inc| FXMAG.COM If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source:Podcast: 2023 really starts today and tomorrow | Saxo Group (home.saxo)

The dollar-yen pair tested the psychologically important price level of 130.00 today, temporarily falling to the area of the 129th figure. The pair has updated a six-month low, but this is not surprising: USD/JPY bears consistently develops a downward trend. Looking at the weekly chart, we can see that the price is now declining as part of the next wave of downward movement. Three weeks ago, the Bank of Japan provoked price turbulence, which turned out to be in favor of the national currency. In general, the downward rally began in October last year, when the pair reached a multi-year price high (151.96). After that, the Japanese authorities conducted another currency intervention, thereby extinguishing the upward impulse. And further events also turned out to be in favor of sellers: the dollar weakened against the backdrop of slowing inflation in the U.S. and a decrease in the Fed's aggressiveness, while the yen received unexpected support from the Japanese regulator. And all this happened and is happening against the background of a kind of "election race" for the post of head of the Bank of Japan: traders react to statements by possible successors of Haruhiko Kuroda (as a rule, these statements are quite hawkish). At the same time, the dovish statements of Kuroda himself, who is guaranteed to leave his position in April, are ignored by market participants. And now the yen, after a short respite in the pre-New Year period, continues to strengthen its position due to several fundamental factors. First, there is growing confidence in the market that the Bank of Japan, having doubled the yield ceiling on 10-year bonds in December, has taken only the first step towards normalizing monetary policy. Last week, on New Year's Eve, Kuroda refuted this assumption. He stated that this decision of the central bank was due to "market and technical reasons." But traders, apparently, are betting that the regulator will further weaken its policy of controlling the yield curve in the future or abandon it altogether. The market is increasingly talking about the possible implementation of such a scenario. In particular, Columbia University professor Takatoshi Ito (who worked with Kuroda at the Japanese Ministry of Finance in 1999–2001) recently said that such a decision by the central bank is a kind of prelude to the rejection of ultra-loose policy. He did not agree with the current head of the central bank that inflation in Japan will slow down this year. Arguing his position, Ito points to the latest data on the growth of the consumer price index: in November, annual consumer inflation reached 2.8%, even without taking into account energy and food prices. This means that inflation may remain above the 2% target level in 2023, even if prices for energy resources and products stop rising. Moreover, according to Ito, this year's wage negotiations are likely to lead to significant increases, boosting consumers' purchasing power, triggering another spike in prices, due to stronger demand. By the way, Takatoshi Ito is one of the candidates to replace Kuroda as head of the Bank of Japan. Other likely successors to Kuroda are also saying in one form or another that the Japanese regulator may have to take the next steps towards normalizing monetary policy. In particular, former Vice Finance Minister for International Affairs Takehiko Nakao said that he favors a smooth transition from the central bank's ultra-loose monetary policy. In my opinion, the market has formed a common position on the interpretation of the December decision of the Japanese Central Bank. And this position boils down to the fact that at the end of last year, the Bank of Japan marked the beginning of the end of the ultra-loose monetary policy. In turn, "hawkish" comments of Kuroda's possible successors are further confirmation of this assumption. The yen is in high demand on the back of such conclusions. Also, we should not forget that Japanese currency has a status of a "safe-haven," so a negative news flow from China provides indirect support for USD/JPY bears. On Saturday, it became known that China's official Manufacturing PMI for December dropped to 47.0, contrary to expectations of a 48-point decline. As we know, the 50-point mark separates contraction from growth, while the Manufacturing PMI has been below the key level for the third consecutive month. China's Caixin Manufacturing PMI, released today, fell to 49.0 (with a forecast of a decline to 49.4). Economists polled by Reuters said the worsening epidemiological situation in China could lead to temporary labor shortages and increased supply chain disruptions. Meanwhile, a new wave of coronavirus infection is spreading in China at an unprecedented rate. Thus, the existing fundamental background contributes to the further decline of the USD/JPY pair. Today, traders tested the 129.50 support level (the lower line of the Bollinger Bands indicator on the daily chart), but then retreated to the area of the 130th figure. There is no doubt that the bears will again storm this price barrier in the medium term, overcoming which will open the way for them to the next support level at 129.00 (the lower Bollinger Bands line on the H4 timeframe). Relevance up to 09:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331353

The Japanese yen has posted winning sessions for three straight days and is in positive territory on Tuesday. Japanese markets are closed today for a holiday, so any strong movement from the yen is unlikely today. It’s a very light day on the economic calendar. There are no Japanese events, while the US releases Final Manufacturing PMI. Yen keeps rolling Japanese markets remain closed for an extended holiday but the good times continue for the yen. Since falling to 151 in October, the currency has rebounded and earlier today broke below the symbolic 130 level, for the first time since May. If USD/JPY closes the day below 130, that will give support for the downtrend to continue. The next target for a downside push is the 125 line, which has held since April. Investors would love to know what the Bank of Japan has planned in the coming months. The BoJ tweaked its yield curve band in December, a move that blindsided the markets and sent the yen flying higher. With Governor Kuroda winding up his 10-year term in April, there were no expectations that Kuroda would make any significant policy changes, and the focus was on his potential successor. Kuroda has insisted that the tweak was not a prelude to the Bank exiting its massive stimulus program, but the markets aren’t so sure. What is clear is that inflation continues to rise in Japan, which is putting pressure on the BoJ to tighten policy. This could take the form of further widening the yield curve band or eliminating the 0% target for 10-year yields. The BoJ next meets on January 18th and investors will be all ears. BoJ policy meetings used to be sleepy affairs, where board members dutifully announced they were maintaining current policy. This is clearly no longer the case, with the BoJ widening the yield curve band at the December meeting and board members discussing the impact that an exit from stimulus would have on the markets. Read next: New Record For Electric Car Manufacturer - Tesla Deliveries Increased By 40% Year-On-Year| FXMAG.COM USD/JPY Technical USD/JPY is testing support at 130.50. The next support level is 129.76, which has held since June There is resistance at 131.25 and 132.13 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: Japanese yen breaks below 130 - MarketPulseMarketPulse  

The US dollar appreciated, mainly due to the minutes from the December meeting of the Federal Reserve. The U.S. central bank raised interest rates by 50 basis points last month after four consecutive increases of 75 basis points in a year, but said it may have to keep interest rates higher for longer to bring inflation under control. Minutes from the December Fed meeting are due to be released on Wednesday, with investors looking for clues as to what rate path is likely to be taken in 2023. The market seems to be struggling to interpret the change in China's Covid-19 strategy. On the one hand, it is predicted that it is likely to unleash the world's second largest economy and its associated supply chains. The Chinese data remains soft and the Caixin manufacturing PMI released today came in with a narrow miss. In December it was 49.0 instead of 49.1 forecast and 49.4 earlier. Moreover, there was a desire from the Chinese side for better relations with the US after their foreign minister said they would look for more open channels of communication. It is worth noting, however, that the exchanges point to a risky market environment, which usually makes it difficult for the US dollar to find demand. USD/JPY The Japanese yen continued to strengthen today with USD/JPY dipping below 130 for the first time since June last year. It has now returned to trading above 130 and is close to 131. The yen, which hit a seven-month high during the Asian trading hours, was recently trading low at 130.45 to the dollar. The pair's decline was mainly driven by a new Japanese yen buying spurt as US equities futures fell at the open and bolstered safe-haven inflows into the yen. Speculation that the BoJ was about to start moving away from its very lax policy flared up in December when the central bank extended the yield cap on 10-year Japanese government bonds (JGB). This was further reinforced by the Nikkei report on Saturday. Read next: The Korea Fair Trade Commission (KFTC) Will Impose A Fine Of $2.2 Million On Tesla Inc| FXMAG.COM GBP/USD GBP/USD drops below the key 1.2000 level for the first time in 4 weeks as the dollar index recovers. Today's morning drop in GBPUSD is due to the recovering dollar index. The risk-positive market environment does not appear to be helping sterling find support so far. As noted above, the decline is attributable to the stronger dollar and not to UK-specific factors, which may also have exaggerated the impact. The UK economy is weighed down by recession fears, high inflation and the cost of living crisis. The Bank of England has raised interest rates nine times since December 2021 to try to bring down inflation, which remains close to a 41-year high. EUR/USD EUR/USD lost traction and fell towards 1.0550 early Tuesday after climbing above 1.0700 on Monday. It's hard to stop the driving force of the pair's recent actions as the market recovers with the US dollar strengthening again. Nevertheless, technical forecasts point to a bearish slope after the sharp decline seen during the European session. Euro still awaits German CPI data release, which may help EUR/USD move towards 1.06. Source: investing.com Read next: New Record For Electric Car Manufacturer - Tesla Deliveries Increased By 40% Year-On-Year| FXMAG.COM AUD/USD The Australian pair fell from above 0.68 to 0.6695 Weaker than expected official Chinese PMI data released over the weekend may have contributed to the decline. The Australian remains supported by expectations that the Reserve Bank of Australia will raise interest rates later this year as part of its ongoing effort to bring down inflation. Markets are currently divided on whether the RBA will deliver another rate hike in February. Australia's trade balance remains at a record high and the AUD/USD exchange rate weakens due to interest rate differentials, and the domestic economy continues to benefit from this. Source: investing.com Source: dailyfx.com, investing.com, finance.yahoo.com

USD/JPY has completed wave A with a test of 129.50. Wave B has taken over for a rally towards 141.25 in the days/weeks ahead. In corrective waves, the B-wave is always the hardest to predict in terms of shape, as all possible combinations are possible. This also means that wave B could make a new low below 129.50 before rallying higher towards the ideal target at 141.25. Let us be clear, we are not saying that wave B will make a new low. Wave B could be a simple zig-zag moving nicely higher from here. What we are saying is that all possible options within the wave theory are realistic in B-waves, which makes them almost unpredictable and very hard to trade.   Relevance up to 07:00 2023-01-05 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307266

USD/JPY is struggling to extend its recovery above 131.00. A spree of lower highs in the asset indicates a continuation of the downside trend. Downward-sloping 20-and 50-EMAs add to the downside filters. The USD/JPY pair is struggling to extend its recovery above 131.00 in the early European session. Earlier, the asset rebounded after sensing buying interest around 129.50 as investors underpinned the US Dollar amid a risk-off market mood. The US Dollar Index (DXY) is displaying a subdued performance as investors are awaiting a fresh trigger for a decisive move. On a four-hour scale, one could easily identify the continuation of the downtrend and the absence of any recovery move from the US Dollar. The Relative Strength Index (RSI) (14) is constantly failing to overstep 60.00, which indicates the presence of a ‘sell on rise’ context in the trading activity. Apart from that, downward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 131.15 and 132.15 indicates more weakness ahead. It would be prudent to wait for a pullback move to near the 50-period EMA around 132.15 for building a short position, which will drag the asset toward the psychological resistance at 130.00 followed by May 4 low at 128.63. On the flip side, a rebound move above December 29 high at 134.50 will drive the asset towards December 7 low around 134.00. A breach above the latter will send the asset towards December 20 high at 137.47. USD/JPY four-hour chart  

Problems of tech companies in the US appeared again, causing the local market to fall. Similarly, the European market fell because right after a significant increase, shares of TESLA and APPLE collapsed by more than 14% and 4% respectively, resulting in a negative closing of stock indices. This shattered all hopes of a rise in demand for equities, which had been expected at the start of the new year. The forex market could not stay away from the situation of the stock market either as dollar began to rise before the opening of the US trading session. The driver was the growing expectations of lower inflation in Europe, which was influenced by the CPI data from Germany. This increased the likelihood that other global central banks will follow the Fed in taking a pause in raising interest rates. The oil market also came under pressure, showing a strong local drop in prices. Most likely, the negative sentiment will continue if the minutes of the December Fed meeting, which is due out today, do not hint at a pause in rate hikes in the 1st quarter of the new fiscal year. The labor market data not showing a slowdown in growth will give a similar effect. The turning point could be the upcoming US consumer inflation figures as markets will surely shift from bearish to bullish once the data shows a slowdown. This could be accompanied by a marked weakening of dollar. Many remain optimistic on a global reversal in markets. Forecasts for today: USD/JPY The pair is trading below 131.40. If market sentiment improves today, there will be a local recovery towards 132.50. AUD/USD The pair is trading below 0.6825. Again, if the situation in the markets stabilizes and investor sentiment improves, the pair will rise above 0.6825 and surge to 0.6900 Relevance up to 06:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331411

The dollar fell on Wednesday, losing against currencies such as the Australian dollar and against the euro, which gained ground on the data series. The dollar was already under pressure from investors becoming more optimistic about the prospect that China's easing of strict COVID restrictions would breathe life into the world's second-largest economy. Wednesday's data showed that consumer price pressure in France fell much more than expected in December, while the previous day's data from Germany also showed that inflation fell much more than expected. Last week's Spanish inflation data painted a similar picture. The Fed meeting minutes from the last Federal Open Market Committee (FOMC) meeting are due to be released later and may shed more light on the board's outlook for the monetary policy tightening cycle. Perhaps more importantly, the market will also be watching employment and inflation figures ahead of the next FOMC meeting in early February. EUR/USD The euro saw its biggest one-day fall against the dollar on Tuesday. Today, the EUR/USD pair is trading above 1.06 again. The breakout took place during the European session, in the asia session the pair stayed below 1.06 The Eurozone showed resilience in late 2022 with plenty of positive data, which so far looks set to continue into 2023. Yesterday brought more positive data as German inflation figures came in at -0.8% vs. forecast - 0.3% with unemployment rate beating estimates. French flash inflation figures were released earlier today, further strengthening the narrative. The S&P Global Eurozone PMI Composite Output Index remains below 50 and is down for the sixth consecutive month at 49.3, up from 47.8 in November. The data signaled the slowest decline since July last year, when activity levels began to decline. This decline has moderated in each of the last two periods of the study. Eurozone Services PMI business activity index rose to 49.8 in December from 48.5 in November. Source: investing.com Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM USD/JPY The yen pair in the European session is heading towards 131. Japan's manufacturing PMI declined slightly in December. AUD/USD The Australian dollar surged towards 0.68 on Wednesday. Moreover, some experts believe that AUD/USD is moving towards 0.69. The current level of the pair shows that it is further than close to this level. The Australian was driven by optimism that . China considers partial lifting of Australia's coal mining ban Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM GBP/USD Sterling rose against the weakening dollar and was slightly higher against the euro as the easing of COVID rules in China prompted investors to bid on risky currencies. The cable market in the morning session stayed below 1.20, in the European session there was a breakout and the pair returned to htrading around 1.2050. ING analysts warned of a potential bearish sentiment in the pound against the US dollar. ING analysts believe that sterling's performance against the euro this year will likely depend on how quickly the Bank of England (BoE) can stop tightening monetary policy. Investors see potential bullish signals for the single currency against the pound if the ECB continues to raise interest rates while the BoE sends mixed messages. Source: investing.com, dailyfx.com, finance.yahoo.com

USD/JPY recovered nicely yesterday and broke without problems through minor resistance at 130.73 telling us, that wave A has completed and wave B now is unfolding towards the ideal target seen near 141.25. The next hurdle to look for is seen at 134.45 and we do expect the first attempt to break above here to be rejected for a corrective decline towards at least the 132.10 - 132.60 area before the next attempt to break through for a continuation towards the 141.25 target. Short-term we see support near 131.42 which we expect will act as a floor for the rally towards 134.45. Read next: The EUR/USD Pair Is Trading Above 1.06 Again, The USD/JPY Pair Is Close To Level Of 131| FXMAG.COM Relevance up to 07:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307430

USD/JPY has rebounded after dropping below 132.00 as investors have shifted their stance to a risk-off mood. Upbeat US payroll data would serve as a reason for the continuation of hawkish policy by the Fed. The BOJ may continue to ease policy further to achieve higher inflation targets. The USD/JPY pair has picked bids after a corrective move below the crucial support of 132.00 in the Tokyo session. The asset has displayed a recovery as the risk-off impulse has rebounded firmly amid soaring anxiety ahead of the United States Employment data. S&P500 has sensed immense pressure as an expression of upbeat employment addition in the United States economy could serve as a reason for the continuation of hawkish monetary policy by the Federal Reserve (Fed) for the entire CY2023. The US Dollar Index has squared off its entire morning gains and is looking to recapture the immediate resistance of 104.00. Meanwhile, the 10-year US Treasury yields have also rebounded to near 3.72%. Friday’s US Nonfarm Payrolls (NFP) data will be keenly watched by the market participants. As per the consensus, the US labor market has witnessed an addition of fresh payrolls of 200K in December against 263K reported earlier. The Unemployment Rate is seen unchanged at 3.7%. Although inflation has been softened in the past few months led by higher interest rates, the Fed is still worried that the low jobless rate could spurt the price index again. The sheer demand for labor would be compensated by higher wages, which would result in higher retail demand as individuals will have more money in pockets for disposal. Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM Before the release of the official US employment data, investors will look after Automatic Data Processing (ADP) Employment Change data, which is seen higher at 150K against the prior figure of 127K. On the Tokyo front, the Bank of Japan (BoJ) is likely to raise fiscal 2022 and 2023 forecasts for the core Consumer Price Index (CPI) in its new quarterly projections, as reported by Reuters. A scenario of a higher inflation forecast will fade rumors of policy shift as higher inflation will be augmented by more policy easing measures from the central bank.  

Following the decline that occurred on January 2, which was due to the collapse of TESLA and APPLE shares, stock indices rose as investors focused on the latest economic statistics from the US and the minutes of the December Fed meeting. Data in the Euro area also caused a strong surge not only in local indices, but also in EUR/USD. Conversely, the US indicator was in decline, which should have led to a decline in the US stock market. However, this did not happen, probably due to growing expectations that the Fed will soon stop raising rates. Investors are clearly hopeful that the local equity market will not fall further as they believe that the worst has already happened. It can be said that the US stock market is off to a low start before the bull market resumes. The positioning of short and long positions has reached the strongest divergence in favor of sellers, which can be overcome at any time if the market thinks that it is time to start buying. The upcoming inflation data in the US will be a signal to buy, but only if there is a noticeable decline in the figures. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM Forecasts for today: USD/JPY The pair is trading around 132.70. A break above this level, which could happen if there is positive sentiment in the market, will push it to 134.45. WTI Oil found support at 73.00. If this level holds and positive sentiment prevails, a rise to 75.00 can be expected.   Relevance up to 07:00 2023-01-07 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331508

The dollar was more or less flat in choppy trading on Thursday after the Federal Reserve's closing minutes were released. The FOMC minutes repeated the message of a critical fight against inflation, more rate hikes ahead and no forecasts for 2023. The Fed publication reminded markets that policymakers do not anticipate a rate cut in 2023 and want to see "much more evidence" of progress to conclude that inflation is on a downward path. Analysts said the protocols were broadly in line with expectations, explaining the markets' relatively subdued reaction. A higher-than-expected JOLT reading of 10.45 million job vacancies in November and the ISM Manufacturing PMI survey triggered a rebound in the US dollar (DXY) index. Although the headline PMI fell slightly in December, the employment index in the PNI report unexpectedly rose to 51.4 from 48.4 in November. Meanwhile, the hawkish tone in the minutes of the December Federal Reserve meeting provided additional support for DXY. Looking ahead, the market will be watching the US employment data today to decipher the potential implications for the Fed at its next meeting in February. It's worth watching future reports. Private ADP employment figures will be released tomorrow ahead of NFP figures and on the EU side EU inflation figures will be released tomorrow after Italy showed slightly lower inflation readings in monthly and yearly comparisons. Next week, the US inflation data for December will be watched closely as the Fed continued to stress the impact of inflation on market disbelief as another lower printout would mean a sixth consecutive cooler printout for the headline and third for the core indicator. USD/JPY The Japanese yen trimmed losses from the previous session against the US dollar. On the Tokyo front, the Japanese yen witnessed a sharp decline after BJ Governor Haruhiko Kuroda advocated further policy easing to push the wage price index to meet elevated inflation projections for 2023 and 2024. The currency and commodity markets started the year with a break in volatility. Japan relies heavily on imports for most of its energy, and with crude oil down about 9% in the last few days, the yen could be the beneficiary of this move. In addition to the yen, the US dollar was weakened during the New York close but has since recovered some of those losses. The USD/JPY pair managed to exceed the level of 132 in the Asian session. It looks like the pair will be headed in the direction of 133 in the near future. GBP/USD GBP/USD traded slightly lower in the early hours of Europe on Thursday and fell towards 1.2000. The UK services PMI rose close to breakeven in December, suggesting little change in activity this month. Read next: Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000| FXMAG.COM EUR/USD EUR/USD keeps trading above 1.0600, but a drop below is still possible. The fundamental landscape surrounding the euro area economy has changed slightly compared to the first three quarters of 2022 and this is largely due to the significant reduction in oil and gas prices, which has brought a huge relief to the bulk importer of these commodities. From today's data from europe, the PPI report is expected. The European Economic Report will include a Producer Price Index (PPI), but that data is unlikely to trigger a significant reaction, especially ahead of Friday's Eurozone Inflation Report. AUD/USD The Aussie Pair keeps its trade above 0.68 despite being closer to 0.68 than 0.69. The Australian dollar soars as traders boost economic confidence in China Most of the AUD's gain took place during Wednesday's trading session in the Asia-Pacific region. At the time, investors likely priced in the potential economic impact of future trade flows between Australia and China due to several developments. Read next: Harvard Business Review Research Shows That Education Is No Longer So Important On The Labor Market, The Ban On The Import Of Hamsters Has Been Lifted, 60/40 Portfolio Is Ended?| FXMAG.COM Source: dailyfx.com, finance.yahoo.com, investing.com

The dollar offset earlier gains after US employment data showed employers created 223,000 jobs in December, more than economists had forecast, while wage growth slowed this month. Fed futures traders have raised bets that the Fed will raise interest rates by 25 basis points at the end of its two-day meeting on February 1 after Friday's data. An increase of 25 basis points is now seen as a 67% probability, up from 54% before, and an increase of 50 basis points is now seen as a 33% probability. USD/JPY USD/JPY started the week at 130.92, ended the week much higher at 132.0540. The week's high was even higher than the last reading and the pair crossed 134 at that point. The low was shockingly low compared to the high as it was below 130, 129.53 to be exact. EUR/USD The EUR/USD pair started the week and the new year at a high level of 1.07. It ended the week trading at 1.0648. It was a tumultuous week for the pair as they had to struggle many times to keep their trade above 1.06 and thus their low was read below that level. The lowest level was even below 1.05 at 1.0491, the highest later was at the level from the beginning of the trading week, i.e. at 1.0709. Unsurprisingly, drastically lower energy prices in the Eurozone helped to soften the headline measure of inflation, where it improved year-on-year and month-on-month - highlighting the trend of lower prices for EU consumers. EU headline inflation drops from 10.1% to 9.2% YoY. Core inflation rises from 5% to 5.2% YoY. According to estimates, energy price growth, although still the largest contributor to the overall index, fell from 41.5% in October to 25.7% in December. By contrast, price pressures on non-energy or food items are higher, suggesting that high inflation remains quite common. GBP/USD Similarly for the euro, the cable pair also had a difficult week. The pound was exceptionally weak and fell below 1.20. They will start the week at 1.2111 and thus it is the highest reading in this trading week, and the end of the week was at 1.2093. The lowest level of the GBP/USD pair was below 1.1850 (1.1848). AUD/USD The Aussie pair was the best among the major pairs of valises. Throughout the week, AUD/USD traded in a tight range compared to other pairs. The pair's weekly range was 0.6700-0.6875. The pair started the year trading at 0.6821 and finished at 0.6879. The end of the week was close to the week's high at 0.6888. The pair dropped the lowest in the week at 0.6690. The factors contributing to the pair's volatility appear to have been largely external, with Chinese politics, Federal Reserve meeting minutes and US employment figures playing a role. China's efforts to break out of its economically stifling zero-case Covid-19 policy appear to come with several challenges. While official figures show a situation that is under control, anecdotal evidence from hospitals and morgues suggests a more problematic transition. At the moment, Australia's trade surplus remains at record highs and the November figure will be known this Thursday. Source: finance.yahoo.com, investing.com

USD/JPY oscillates in a narrow trading band on the first day of a new week. The prevalent USD selling bias is seen as acting as a headwind for the major. The risk-on mood undermines the safe-haven JPY and limits the downside. The USD/JPY pair struggles to gain any meaningful traction on the first day of a new week and seesaws between tepid gains/minor losses through the early European session. The pair is currently placed just below the 132.00 round-figure mark and seems vulnerable to extending Friday's retracement slide from over a one-week high. The US Dollar adds to Friday's softer US macro data-inspired losses, which, in turn, is seen as a key factor acting as a headwind for the USD/JPY pair. In fact, the closely-watched US monthly jobs report (NFP) showed that Average Hourly Earnings grew 0.3% last month, lowering the YoY rise to 4.6% from 4.8% in November. This was seen as an indication that inflation pressures could be weakening. Furthermore, the US ISM Services PMI fell into contraction territory and hit the worst level since 2009, fueling expectations for a less aggressive policy tightening by the Fed. This leads to an extension of the downfall in the US Treasury bond yields, which continues to weigh on the buck. That said, the risk-on impulse undermines the safe-haven Japanese Yen and acts as a tailwind for the USD/JPY pair. China's biggest pivot away from its strict zero-COVID policy boosts investors' confidence, which is evident from a generally positive tone around the equity markets. The latest optimism, however, is likely to remain limited amid concerns that the massive flow of Chinese travellers may cause another surge in COVID infections and worries about a deeper global economic downturn. Moreover, the recent reports that the Bank of Japan (BoJ) plans to raise its inflation forecasts could lend support to the JPY. This, in turn, suggests that the path of least resistance for the USD/JPY pair is to the downside. Hence, any attempted recovery could be seen as a selling opportunity and runs the risk of fizzling out rather quickly in the absence of any relevant macro data from the US.

The Japanese yen is calm on Monday and is trading slightly higher, at 132.27. The yen ended the week on a strong note, posting gains of about 1% on Friday. USD/JPY has shown significant volatility since late December. Last week, the pair traded in a range of over 500 points, which included breaking below the 130 line for the first time since May. We could see stronger movement again today, as Japan releases Tokyo Core CPI and Household Spending later in the day. Tokyo Core CPI expected to rise to 3.8% Tokyo Core CPI has been moving steadily higher since January 2022, when it came it a negligible 0.2%. The December report rose to 3.6%, up from 3.4%, and the upward trend is expected to continue, with a forecast of 3.8% for January. After years of deflation, rising prices have become the new norm. The Bank of Japan has repeatedly stated that it will not change its ultra-loose policy due to higher inflation. Governor Kuroda said last month that he expects inflation to fall below the 2% target as the effect of soaring import costs will ease. The BOJ shocked the markets in December by widening the yield curve band, and there is speculation that Kuroda’s successor, who will take over in April, could raise the yield targets on long-term bonds, which would be a major policy change. High inflation has taken a bite out of Household Spending, which fell to 1.2% in October, down from 2.3% a month earlier. The downtrend is expected to continue, with a weak gain of 0.6% expected for November. The US dollar was lower across the board on Friday, after the US posted some soft data. Nonfarm payrolls was slightly better than expected at 223,000, but wage growth headed lower. Average hourly earnings rose 4.6%, well off the 5.0% estimate and shy of the prior reading of 4.8%. The ISM Services PMI underperformed, slipping to 49.6, down sharply from 56.5 and the forecast of 55.5. This marked the first time the PMI has fallen into contraction territory since May 2020, with a reading below the neutral 50.0 threshold. The drop in wages and the weak services data indicate that the US economy is slowing and is likely to tip into recession, which could force the Fed to reconsider its aggressive rate-tightening policy. Read next: Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM USD/JPY Technical There is weak support at 132.13, followed by 131.14 133.28 and 134.75 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The US dollar on Monday approached a seven-month low against other major currencies after data suggested the Federal Reserve could slow the pace of rate hikes. The dollar suffered its biggest quarterly loss in 12 years in the last three months of 2022, driven mainly by investor confidence that the Fed would not raise interest rates above 5%. The probability of a 25 basis point Fed rate hike in early February rose above 70% after the release of this data, reflecting the return of dovish Fed betting. The US economic report will not contain any important macro data on Monday. Later in the day, Atlanta Federal Reserve Bank Chairman Raphael Bostic will give a speech, and he said on Friday that he expects the Fed to keep interest rates at peak levels until 2024. Friday's monthly employment report showed an increase in non-farm payrolls and a slowdown in wage growth. The US employment data hit the US dollar hard. USD/JPY The Japanese yen strengthened above 132 to the dollar, returning to its highest level in seven months. The yen is building on December gains amid mounting speculation that the Bank of Japan may soon move away from ultra-easy policy after it unexpectedly raised the upper end of its 10-year government bond tolerance band to 0.5% from 0.25% last month . However, BJ Governor Haruhiko Kuroda clarified that the move was not a sign of starting a massive stimulus exit, but was intended to improve the functionality of the bond market. AUD/USD The AUD/USD pair builds on Friday's strong rally and gains strong traction on the first day of the new week. This marks the second day in a row of positive movement. The Aussie pair broke through the 0.69 level in the Zajati session. China's hopes of reopening may have contributed to the strengthening of the commodity currency. The world's second largest economy has lifted quarantine requirements for visitors, taking another step towards reconnecting to the world in the post-Covid era. Over the weekend, China finally reopened its sea and land border crossings with Hong Kong, the last pillar of its zero-covid policy, after three years. On the monetary policy front, the currency remains supported by expectations that the Reserve Bank of Australia will raise interest rates further this year in an ongoing effort to bring down inflation. Otherhand, markets are currently split on whether the RBA will deliver another rate increase at its Feb. GBP/USD The British pound hit a two-and-a-half-week high on Monday against a fundamentally weak dollar. GBP/USD entered a consolidation phase and pulled back towards 1.2100 after hitting a two-week high at 1.2175 earlier in the day. The US dollar came under strong selling pressure before the weekend. Traders are fully pricing in a 25bps rate hike at the February BoE meeting with around a 65% chance of a larger 50bps hike. The money markets predict that the bank rate will peak at around 4.5% in the middle of this year. EUR/USD EUR/USD is on a strong gain for the second day in a row. After Friday's rally before the weekly close, EUR/USD rose to 1.0699 on Monday. The euro benefited from better market sentiment. Today the EUR/USD pair climbed towards 1.0700. Unemployment in the EU shows a downward trend and November's print jobs reached 6.5% . Lower gas prices are also contributing to optimism in the eurozone and a better economic outlook for the eurozone, but the main driver of the euro appears to be a sell-off of the dollar along with flows into risky assets. Source: investing.com, finance.yahoo.com, dailyfx.com

A glance at the Yen over the next few days might be interesting. Antje Praefcke, FX Analyst at Commerzbank, expects the USD/JPY pair to dive below the 130 level. How far does the BoJ go? “Next week's BoJ meeting will be exciting. After the surprise widening of the yield target in December, the big question is how far the BoJ will go. Perhaps next Wednesday we will get a first hint. Although it is likely to get really exciting starting in April, when the new Governor will take over, whose nomination is still pending.” “If there are already signs next week that the BoJ really is moving further away from its ultra-expansionary stance, I would expect USD/JPY to quickly fall below 130.”

The Japanese yen continues to have a quiet week. USD/JPY is showing little movement on Tuesday, trading at 131.84. Tokyo Core CPI hits 4.0% Tokyo Core CPI, a key inflation indicator, was higher than expected and in December hit 4.0% for the first time since 1982. This was up from 3.6% in November and above the forecast of 3.8%. Food and energy costs were the drivers behind the uptick, but higher prices were broad-based, casting doubt on the Bank of Japan’s argument that inflation is mainly due to import costs. The BoJ says that inflation is close to a peak, but inflation indicators such as Tokyo Core CPI don’t corroborate that view. The markets were caught flat-footed by the BoJ in December when it suddenly widened the yield curve control band, and wary investors are on the lookout for further policy changes, such as another widening of the band or eliminating its yield curve control target for long-term bonds. Higher inflation is putting pressure on the BoJ to respond, and the monthly policy meetings are no longer sleepy affairs that have no bearing on the markets. The BoJ meets again on January 18th and in addition to announcing policy will update its inflation forecasts. High inflation has taken its toll on consumers, and Household Spending declined in November for the first time since June, with a reading of -1.2%. This was down from 1.2% in October and missed the consensus of 0.6%. The government has introduced an economic stimulus package that includes subsidies for electric bills and is counting on the measures to push inflation lower. Still, the package isn’t expected to make an impact until February, which means inflation could continue to accelerate in January. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM USD/JPY Technical There is weak resistance at 132.13, followed by 133.30 131.25 and 130.60 are the next support lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The US dollar improved slightly against its major trading partners early on Tuesday. The National Federation of Independent Business's monthly small business sentiment reading fell further in December as small businesses continue to struggle with high inflation that is dragging down profits. The economic outlook has deteriorated further this year. Markets are increasingly doubting whether the Fed will need to raise interest rates above 5% to cool down inflation as the effects of its aggressive rate hikes last year are already being felt in the economy. The focus for today will be Fed Chair Powell’s comments. USD/JPY So far, the Japanese yen has changed little against the dollar this week. USD/JPY was little changed on the news, but the Bank of Japan’s ability to maintain a loose monetary policy setting may come under closer scrutiny. USD/JPY is currently bullish and trading at 132.2600. In the earlier trading hours, the pair was even below 132. Japanese inflation appears to be accelerating after the headline Tokyo CPI hit a 40-year high at 4.0% year-on-year to the end of December. This was in line with forecasts, but core CPI was also 4.0% for the same period, above the 3.8% anticipated and 3.6% prior. EUR/USD EUR/USD has lost its traction and declined toward 1.0700 in the early American session on Tuesday. The EUR/USD was even above 1.0750 today. But the current level shows that the pair failed to break through the 1.0740 level, and the daily chart shows that the pair is barely down. It is possible that the EUR/USD pair will drop below 1.0700. While the US dollar remains under pressure from lower rate expectations, the Euro continues to be bolstered by the ECB’s insistence that rates will need to go higher to dampen ongoing price pressures. With the Fed coming to the end of its rate hike cycle, and with the ECB still in full flow, rate differentials between the two will continue to favor Euro strength. The EUR/USD pair as focus shifts to FOMC Chairman Powell's speech. GBP/USD The British pound traded above to $1.2, near a two-and-a-half-week high against the dollar, which hit Monday, The Cable Market is currently below that level, far from it. Trading is at the time of writing around 1.2120. The Bank of England's chief economist, Huw Pill, warned of the risk of continued inflationary pressures from a tight labor market, even if natural gas prices stabilize or fall. The UK central bank is likely to raise interest rates again to 4% next month. Meanwhile, markets are divided as to how much more interest rates will rise. On the data front, all eyes are on the monthly UK GDP figures. AUD/USD The Aussie pair stayed above 0.69 in the early hours of trading, but failed to maintain that level and found itself below it again. Currently, the Australian pair is trading around 0.6860. In addition, the market is also slightly favoring a quarter point hike from the Reserve Bank of Australia (RBA) to 3.35%. The probabilities may change data on monthly prices of consumer goods and services and retail sales for November, which will be published on Wednesday. After a surprise dip in October, inflation picked up again to an annualized 7.3%, while retail spending is expected to rise by a solid 0.7% thanks to major sales this month. Source: finance.yahoo.com, investing.com

If we look at 4 hour chart USD/JPY main currency pairs looks like the following facts: 1. There is a deviation between price movements with Awesome Oscillator Indicator. 2. The form of Bullish 123 pattern. 3. The appearance of Wiseman. 1 (Bullish Divergent Bar). 4. The appearance of Wiseman. 2 (SAO). Based on the four facts above, in the coming days the main currency pair USD/JPY has the potential to appreciate, rally upwards to test the 134.77 level. If it is successfully penetrated, USD/JPY will continue its rally up to the 136.19 level and if momentum and volatility are supportive then USD/JPY will continue its rally up to the level of the 138.03-140.03 area but if on its way to the targets of this area suddenly USD/JPY reverses back to its initial bias (Bearish) to break below the 129.51 level then all the scenarios previously described will become invalid and cancel by itself.   Relevance up to 03:00 2023-01-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117341

USD/JPY’s weakness has slowed a little following the aggressive sell-off in Q4. Economists at Credit Suisse expect the pair to eventually find a floor at key support at 127.53/27. Resistance at 138.14/18 is expected to cap “Whilst a near-term consolidation phase should be allowed for, resistance at 138.14/18 is expected to cap and strength, if seen, will be seen as temporary and our broader outlook stays negative for further weakness in Q1 back to 129.62, then our core target of the ‘neckline’ to the multi-year base and 50% retracement of the 2020/2022 uptrend at 127.47/27. We would then look for a potentially major floor here.” “Should weakness directly extend below 127.27/126.36 we would see support next at the 61.8% retracement at 121.44.” Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM

Fed Chairman Jerome Powell gave no policy guidance at Tuesday's panel discussion in Stockholm, and with other Fed officials saying their next moves will depend on the data, investors are very focused on the US CPI data. The dollar has weakened sharply in recent months on hopes that U.S. inflation is declining, which, along with some signs of pressure on the U.S. economy, is fueling expectations that the Fed is nearing the end of its rate hike program. In terms of energy, both the UK and the Eurozone have benefited from the fall in oil and gas prices, but with sanctions and price caps tightening on Russia, Russian retaliation could push energy costs up again. USD/JPY The USD/JPY pair is rising today and trading above 132.7500. What's more, the pair keeps its trade above 132.0000 for second day The current term of BoJ Governor Haruhiko Kuroda ends in April, and former Bank of Japan (BoJ) board member Sayuri Shirai has called for a review of the Bank's policies over the past 10 years in light of the changing inflation landscape. Moreover, the generally positive tone in the equity markets is weakening the safe haven of the Japanese yen and providing some support for the USD/JPY pair. In addition, broader risk sentiment will be taken into account for short-term trading opportunities around the USD/JPY pair. Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM AUD/USD The AUD/USD pair traded above the $0.69 level in the Asian and European sessions. Currently the Aussie pair is below 0.69, trading above 0.6880 at the time of writing The Australian dollar remains high, continuing to push towards the five-month high seen on Monday near 0.6950. Today's retail sales were 1.4% month-on-month in November, well above the forecast of 0.6% and -0.2% previously. The year-on-year figure to the end of November was 7.4%, not the expected 7.2% and 6.9% earlier. The data shows a downward correction in retail sales in early 2021, but an acceleration in November. Today, the monthly CPI for November was also released, with the headline CPI year-on-year printed at 7.4%, above estimates of 7.2% and 6.9% earlier. Markets are currently divided over whether the RBA will deliver another rate hike in February. China changed its Covid-19 policy in December and the reopening of the world's second largest economy could provide further opportunities for Australian exports. Frosty relations between Australia and China appear to be thawing, which could provide additional stimulus to the Australian economy. Source: investing.com EUR/USD The EUR/USD exchange rate maintains a steady upward trend after reaching a 20-year low of 0.9535 in September. EUR/USD regained traction and turned positive during the day near 1.0750. Currently, the pair is trading just below this level (1.0743) European Central Bank (ECB) Governing Council member Mario Centeno said late Tuesday that the current process of interest rate hikes may be coming to an end. As for the inflation outlook, Centeno noted that inflation may encounter some resistance in January and February before starting to decline in March. Nevertheless, these comments had no noticeable impact on the euro's valuation. The hawkish narrative was reinforced by one of the more aggressive officials in Isabel Schnabel, while ECB's Villeroy spoke in today's speech, stating the need for additional rate hikes in the coming months. Given this, higher relative rate hikes could support the strength of the euro over the next few months. Read next: According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM GBP/USD GBP/USD extended its downward correction towards 1.2100 during European trading hours on Wednesday. Improving market sentiment seems to be helping GBP/USD to contain losses for now. The Bank of England (BoE) is projected to move slightly slower than other central banks (e.g. ECB), given that the rate hike cycle started much earlier than the ECB. Source: finance.yahoo.com, investing.com, dailyfx.com

FX markets are consolidating ahead of tomorrow's important December US CPI release. But the dollar bias is lower. Business surveys point to a slowing US economy and, if inflation allows, the Fed will be in a position to ease policy later this year. Commodity markets remain bid on the China rebound story and we expect emerging and commodity FX to remain bid USD: Business pessimism builds We highlighted in yesterday's publication that the day presented two event risks to the building dollar negative sentiment. Those were Federal Reserve Chair Jerome Powell's comments at a Riksbank symposium and the US NFIB small business confidence reading. In the end, Chair Powell avoided discussing monetary policy and instead warned against central bank mission creep into climate policy. And the NFIB survey was very pessimistic indeed, including a view on pricing power which ING's US economist, James Knightley, says is consistent with US core inflation dropping to a more comfortable 2-3% year-on-year area by the late summer. That core reading is currently running at 6.0% year-on-year and is expected to drop to 5.7% YoY in tomorrow's December CPI release - the key US release this week. Thus this year's FX market proposition remains whether US inflation can acquiesce enough to allow the Fed to cut later this year. The markets price a 50/60bp hike into the spring, then a cut of a similar magnitude by year-end. A further 150bp of easing is priced into next year. ING's house view is a little more aggressive, looking for 100bp of cuts this year and then a further 150bp next year. Assuming no upside surprises in inflation then and the increasing focus on China firmly supporting domestic demand, the risk environment is being read as positive. We note copper, a key barometer of Chinese demand, climbing back to $9000/MT in Asia today. We think investors will therefore be looking to sell the defensive dollar on rallies as they put money to work in 2023. As always, we think the short end of the US yield curve will play a major role in FX markets and as long as two-year US Treasury yields continue to hover near the range lows at 4.20/4.25%, the dollar will stay on the soft side.  DXY remains soft and we would say the near-term bias remains towards the 102.00 area, unless tomorrow's US CPI release throws a hawkish curveball. The US event calendar looks exceptionally light today, although we will start to see US quarterly earnings releases build through the week. Chris Turner EUR: Options market turns more bullish EUR/USD remains gently bid, buoyed by expectations of a Fed U-turn in the second half of this year, China reopening and a belatedly hawkish European Central Bank. On that subject, we have four ECB speakers today. Market expectations are firmly set on a further 125-150bp of ECB tightening this year - seemingly 50bp hikes in both February and March and a final 25bp in May to take the deposit rate to 3.25%. Our eurozone team agrees with this pricing.  Looking at the FX options market we can see EUR/USD optimism continuing to build. Measures such as the risk reversal - the cost of a 25 delta EUR/USD call option versus a similar EUR/USD put option - continue to move in favour of EUR/USD upside. As recently as October, the markets were prepared to pay 2% extra in volatility terms for a 3-month 25 delta EUR/USD put option. That skew for euro puts has now narrowed to 0.67%. The skew turning positive - in favour of EUR/USD calls - would be a big moment for the FX market. As above, the seemingly benign investment environment (despite the horrors in Ukraine) probably has investors wanting to buy EUR/USD on dips. It is the time of year when FX markets move on fixing flows from the asset management community. Today's EUR/USD bias looks towards resistance at 1.0785 and potentially towards the 1.09 area tomorrow, should the US CPI release oblige. Chris Turner JPY: Lots of focus on the BoJ USD/JPY is consolidating at the lows and the focus very much remains on Bank of Japan (BoJ) policy after December's surprise widening in the 10-year JGB yield target band. 10-year JGB yields continue to press the topside of the new +/- 0.50% band, with the expectation growing that the band will be widened to +/- 1.00% over the coming months. Despite the BoJ marketing these adjustments as a measure to address JGB market functioning, investors are reading this as BoJ tightening - and yen positive. Focus on the exit of the ultra-dovish BoJ governor in April means that investors will be very cautious selling the yen over coming periods. One month realised USD/JPY volatility is still at an incredibly high 16.5% - making the JPY far too volatile for any kind of funding currency - and we think USD/JPY can end the quarter somewhere near 128. Chris Turner CEE: Czech inflation to rise again Yesterday's meeting of the National Bank of Romania (NBR) brought a 25bp rate hike to 7.00%, as expected. Although we consider this to be the last hike in this tightening cycle, we feel that the NBR wants to keep the door open if needed. But probably the most interesting part is the dropping of the "firm liquidity control" commitment. While dovish in essence, we read this more like an after-the-fact acknowledgement rather than any forward guidance. The Romanian leu barely changed yesterday but we still think it should benefit from global factors, catch up with the lag behind the region and make another move below NBR levels. Today, the focus shifts to the Czech Republic. December inflation we think will show a rise from 16.2% to 16.4% year-on-year, above market expectations. However, as we showed earlier, there is still room for upside surprises. Moreover, fuel prices are the main reason for slower inflation than we have been used to, while inflation remains strong in other parts of the CPI. For the market, the higher number should be a reminder that the inflation problem is still with us and this may be the first opportunity this year to reassess the strong dovish expectations built up recently. At the one-year horizon, markets expect a 170bp rate cut, which is hard to believe given the current Czech National Bank rhetoric, the record strong koruna and the inflation profile. However, the koruna is looking the other way and ignoring domestic conditions. More important for it and the entire CEE region at the moment is the global story, the massive improvement in sentiment in European markets and gas prices below EUR70Mwh. This, in our view, should keep the positive sentiment in the region at least for the rest of the week and keep FX steady.                                Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

This morning, the Japanese yen fell to the lower limit of the consolidation of the last four days. Like the European currencies, the yen is waiting for today's US inflation report for December. The signal line of the Marlin oscillator makes a second attempt within a week to move into a downward trend area. If it succeeds this will help the price reach support at 129.77. Crossing the level makes the 127.10 target available. The embedded lines of the global price channel marked on the daily chart have changed in accordance with the current situation. On the four-hour chart, the price is trying to cross the support of the MACD line. It is helped by the Marlin oscillator, which has already moved into the downward trend area. So, we wait for the price to reach the first target at 129.77. This is the main scenario. The alternative involves crossing the resistance at 133.50 and a possible further growth to the MACD line on the daily chart (137.00).   Relevance up to 03:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332042

FX markets today see one of the most highly awaited data points of the month - US CPI. The last two soft releases were the foundation for the fourth quarter rally in risk assets and today's release should determine whether this year's rally - and the decline in the dollar - continue. Next week's Bank of Japan meeting is also in focus as is strength in EUR/CHF EUR: Sowing some independent strength The euro showed some independent strength yesterday and had quite a strong rally against European currencies - especially the Swiss franc (see below). Some tried to link that rally to a story that Germany would support fresh EU bond issuance to support state aid in Europe's fight against US green subsidies in its Inflation Reduction Act. That linkage seems a little far-fetched and European peripheral debt barely budged on the story. But we are still seeing eurozone equity outperformance, which must be providing the euro with some good support. For today, the FX options market prices a 90 pip EUR/USD range for the CPI release. Assuming no upside surprises in CPI, the EUR/USD direction of travel looks towards the 1.09 area. 1.0660/1.0700 might well contain any downside today. Chris Turner USD: December CPI to determine whether risk rally continues It has been a relatively good start to the year for risk assets. Global equity indices are up around 3.7%, led by Europe. Bond indices are up a decent 2-3% and emerging market assets are in demand, with EM local currency bond indices up close to 3%. This environment of money being put to work has weighed on the defensive dollar, which is softer against many emerging market currencies and quite a few G10 currencies. This benign environment has been secured partially on the back of soft US price and activity data. Softer US price data has come both in the form of hard data and through surveys. Today sees the release of the December US CPI. Expectations are that the core will be rising at a relatively subdued 0.3% month-on-month pace and 5.7% year-on-year. This compares to 0.6/0.7% MoM readings last summer. As always, there are many moving parts in the data. For example, will medical costs and used car prices continue to drag the number lower? And does it remain too early to expect lower rental prices to drag shelter costs - a big component - down? Recently, the Federal Reserve has been highlighting that it is focused on the core services inflation reading ex-housing. So let us see what that number offers today. ING's US James Knightley is on consensus forecasting the 0.3% MoM/5.7% YoY reading. A number in line with consensus probably allows the risk rally to continue. Expectations of a Fed easing cycle in the second half of the year, China reopening and lower energy prices are all encouraging this reallocation towards risk and should today's CPI number oblige, DXY could make a move towards the 102 area. Any upside surprise in the number could see DXY bounce to the 104.00/104.25 area, but we doubt it would completely spell the end for the better risk/softer dollar environment. Chris Turner JPY: Bank of Japan meetings are all live USD/JPY sold off in early Asia on a local media report that the Bank of Japan could again review its JGB yield target at next week's meeting. The report suggested December's widening of the JGB yield target band might not have been enough to address the BoJ's concerns over bond market functioning. The report also suggested that the BoJ would raise its fiscal 2023 and 2024 inflation ex-food forecast to 2% - effectively signalling the end of its deflation fears. This comes at a time of much focus on a pick-up in wages in Japan and a more sustainable rise in inflation. The FX options market prices a 1.3% range for USD/JPY today, where a benign US data print could send USD/JPY back to this year's low at 129.50. Next week's BoJ meeting means that any upside should be limited to the 132.60/133.00 area. Chris Turner CHF: Wrong We had been forecasting a lower EUR/CHF this year on the view that the Swiss National Bank wanted a stronger nominal Swiss franc to fight inflation. Instead, EUR/CHF yesterday broke above 1.00. There are probably two factors driving the move. The first is that USD/CHF is a lot lower, meaning that the SNB is getting its stronger Swiss franc via gains against the dollar and does not need it a lot stronger against the euro. The second is that the hawkish European Central Bank and the further 125bp of tightening expected will out-tighten the SNB. Given that it looks like the dollar will stay offered for the time being and the ECB looks unlikely to relent on its hawkishness, this trend to a higher EUR/CHF may remain in place. However, we doubt the SNB would want to see a big rally this early and the move may stall in the 1.0070/1.0100 area. We had thought EUR/CHF could trade to 0.95 this summer, but it looks like we will have to revise up those forecasts. Chris Turner  Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

USD/JPY came under modest bearish pressure early Thursday and declined below 132.00. The pair could plunge to 129.50 on mild US data, economists at ING report.  Any upside should be limited to the 132.60/133.00 “The FX options market prices a 1.3% range for USD/JPY today, where a benign US data print could send USD/JPY back to this year's low at 129.50.” “Next week's BoJ meeting means that any upside should be limited to the 132.60/133.00 area.” See – US CPI Preview: Forecasts from 10 major banks, price pressures to ease further

Summary:  Today we look at global equity markets gunning for more to the upside, apparently expecting a benign US CPI release today and pricing in a soft landing scenario as long treasury yields settled back lower after a strong US 10-year treasury auction yesterday. We also look at a resurgent JPY, why the euro is strong, but some thoughts on longer term caution, coffee and grains in commodities, the latest expansion plans abroad from TSMC, weak housing news but strong housing stocks & more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Market showing no fear ahead of US CPI | Saxo Group (home.saxo)

Financial markets started Thursday with optimism putting some pressure on the US dollar, although activity remained subdued ahead of the release of the US Consumer Price Index (CPI). Traders, meanwhile, seem reluctant to place aggressive bets and prefer to wait for the release of US consumer inflation data on Thursday. The headline CPI is expected to rise by 6.5% in the 12 months to December, much better than previously at 7.1%, and further decline from a multi-year high of 9.1% recorded in June. Investors will pay particular attention to the underlying reading, which excludes fluctuations in food and energy prices. Core inflation peaked at 6.6% y/y in September, falling to 6% in November. A key US CPI report should clarify whether the Fed will need to raise its interest rate target above 5% to curb stubbornly high inflation. December inflation data from the US may significantly affect the valuation of the US dollar. Apart from inflation data, the US will publish preliminary jobless claims data for the week. USD/JPY The yen gained ground on Thursday amid expectations that the Bank of Japan will review the side effects of monetary easing. Due to the strengthening of the yen, USD/JPY fell to the level of 130.7030. Overall, the yen also indirectly benefited from the more dovish move markets are pricing in for the Federal Reserve. Markets are clearly pricing in a Fed turnaround that will come early after weaker US economic data earlier this month. The upcoming BOJ meeting, expectations of an upward revision of the bank's inflation forecast, and the imminent announcement of a new BOJ chairman are also likely to fuel expectations for a change in policy. Read next: The New Disney Drama: Disney Is Opposing Activist-Investor Nelson Peltz| FXMAG.COM EUR/USD The EUR/USD daily chart has seen an impressive series of green candles this year, extending its rally from deep below par that started in September 2022. EUR/USD keeps trading above 1.0750. On the “EUR” side, further interest rate hikes from the European Central Bank are expected. The bottom line is that expectations for future interest rate support will continue to favor the euro. GBP/USD The GBP/USD Pair lost the momentum of its rebound and dropped below 1.2150 ahead of Thursday's US session amid cautious market sentiment. The short-term technical outlook suggests that GBP/USD's bullish bias remains intact. What's more, the pound fell to its lowest level since late September on Wednesday as the rising euro hit a seven-month high amid hawkish messages from European Central Bank officials. AUD/USD In the Asian session, the pair traded above 0.69, only in the European session did it drop below this level. Currently, the pair of the Australian has regained strength and again trades above $0.6910 The Australian and New Zealand dollars rose on Thursday as markets assumed incoming US data would confirm a cooling in inflation, while Australia boasted a surprisingly large trade surplus amid falling imports. Local data showed how Australia continued to benefit from being a net exporter of resources when commodity prices were still relatively high. The country's trade surplus rose to A$13.2bn ($9.13bn) in November, well above forecasts. Source: dailyfx.com, finance.yahoo.com, investing.com

The Australian dollar rose 61 pips on Thursday due to good data on lower US inflation. The 0.7048 target level is about 80 pips away. It is possible that the price will reach that level, but the possible divergence from this level will be much stronger than the one from the current levels. This morning's figures from Australia and China are pessimistic. Home loans in Australia fell by 2.0% over the month, real estate investment fell by 3.6%, China's trade balance for December increased from $69.8 billion to $76.2 billion, but at the expense of a strong export decline of 10.0% y/y (imports fell by 9.8% y/y). As a consequence, we expect the price to settle at the support of 0.6917. Consolidation under the level, which will not happen today, will open the next target at 0.6800. But for now we are watching the development of moderate growth. On the four-hour chart, a price divergence has formed with the Marlin oscillator. The general trend is still growing. After the end of the correction, the price can rise to the 0.7048 target.     Relevance up to 03:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332180

An on-consensus US December CPI release has allowed the FX markets to revert back to the main event – a potential sea-change in Bank of Japan (BoJ) policy and perhaps plenty of downside in USD/JPY. That is the hottest story in town right now. Soft US consumer sentiment and softening inflation expectations should also keep the dollar bias bearish today Looking at the FX options market, USD/JPY remains the stand-out interest USD: Slip sliding away An on-consensus US CPI release yesterday did not interrupt this year’s narrative of the US Federal Reserve being able to cut rates later in the year and the dollar being able to fall. As our US economist James Knightley wrote in his review of the release, it seems that it is mainly the shelter component holding the core month-on-month reading up here and shelter should start to come sharply lower in the second quarter. Consensus is now behind consecutive 25bp Fed hikes in February and March, followed by a Fed turning dovish over the summer and starting to deliver rate cuts later in the third quarter. The Fed taking rates back towards less restrictive territory remains a tailwind to risk assets – especially to emerging risk assets buoyed by China rebound expectations. Fund flow data show good momentum in Chinese equity ETFs, which is normally very supportive of the renminbi. It is a quiet day for US data, and a soft University of Michigan consumer sentiment plus declining inflation expectations can keep the dollar on the back foot. With USD/JPY expected to stay under pressure into next Wednesday’s Bank of Japan meeting, the DXY can stay biased to the 102.00 area near term. Chris Turner EUR: ECB will be happy with the stronger euro The ECB’s trade-weighted euro has now returned to levels seen last February. And actually, the year-on-year change in EUR/USD is now mildly positive. This will be welcome news to the ECB, where last summer’s 6% YoY EUR/USD decline was contributing to the inflation problem. With short-dated (two-year) USD swaps drifting to new lows for the move, EUR/USD swap differentials continue to move in favour of EUR/USD. And this is a theme which we suspect will play a greater role in EUR/USD pricing over the next 12 months. For today, the eurozone data calendar sees the release of November industrial production and the trade balance. We will also find out how much European banks have repaid of their targeted longer-term refinancing operations (TLTROs) drawings in January. The expectation is around €200bn, with the range being around €50bn-450bn. Any higher-than-expected repayment might be positive for two reasons: i) it would reduce excess euro liquidity and would be supportive of eurozone rates and ii) it might be seen as a sign of confidence as precautionary borrowing is paid back. Let’s see. EUR/USD remains on course for 1.0900 and possibly 1.0950. Weekend profit-taking may pose the biggest risk to EUR/USD, but 1.0750 should now be a good near-term base. Chris Turner JPY: Off to the races Looking at the FX options market, USD/JPY remains the stand-out interest. One-week implied volatility remains at a very high 20% and volatility for the Bank of Japan (BoJ) meeting next Wednesday is priced as high as 40% or a near 1.7% move in spot USD/JPY. As events showed yesterday with the 2% USD/JPY fall, even at these levels the FX options market may still be under-pricing volatility. This huge interest in USD/JPY is understandable. The BoJ may be on the verge of its biggest policy change in decades. Even short-dated JPY Interest Rate Swaps have started to move and are at the highest levels (near 30bp) since 2008! Clearly, USD/JPY has come a long way very fast, but some of the longer-term skews in the FX options market point to a structural shift in the market’s view in USD/JPY. We suspect few will want to stand in the way of the USD/JPY downside. 126.50 looks like the clear near-term target for USD/JPY. Chris Turner CEE: Higher EUR/USD is a small boost for region All the important numbers have already been published this morning. Romania's December inflation fell from 16.8% to 16.4% YoY, more or less in line with market expectations. In Hungary, on the other hand, inflation rose from 22.5% to 24.8 % YoY, less than the market expected. Later today, we will see the final December inflation number in Poland, which surprised in a flash estimate to the downside to 16.6% YoY. We'll also have some secondary data such as the current account in Poland, Czech Republic and Romania, and today, after the end of trading, Fitch will publish a rating review of Poland. The country is currently rated A- with a stable outlook and we do not expect any changes today. Also in Poland, the lower house of parliament will vote on a bill that should help unlock EU money and get access to €35.4bn. On the FX market, we found the CEE currencies almost unchanged after yesterday's US inflation number. However, higher EUR/USD today will give them a chance to erase this week's losses. But still, it shouldn't change much in the picture of a flat week. For the Polish zloty we see a return below 4.680 EUR/PLN and for the Czech koruna levels below 24.00 EUR/CZK. Hungarian inflation numbers should be good news for forint and we can go back below 396 EUR/HUF. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The data from the US revealed that the Consumer Price Index declined by 0.1% on a monthly basis in December. The Core CPI, which strips volatile energy and food prices, was up 0.3% in the same period. Finally, annual Core CPI arrived at 5.7%, down from 6% in November, as expected. Although the US Dollar struggled to find direction with the initial reaction to the US inflation report, dovish comments from Fed officials triggered a sharp decline in the US T-bond yields and weighed heavily on the currency. Atlanta Federal Reserve Bank President Raphael Bostic said that he was comfortable with a 25 basis points (bps) increase at the next meeting. On the same note, Philadelphia Fed President Patrick Harker noted that it was time for future Fed rate hikes to shift to 25 bps increments. Dovish comments from Fed officials, however, made sure that investors continued to move away from the US Dollar. The latest Michigan Consumer Sentiment report showed consumer sentiment remaining low. Year-ahead inflation expectations fell to 4% from 4.4% while the five-year reading nudged a touch higher to 3% from 2.9% in December. USD/JPY USD/JPY started the week trading at 130.8020. Over the next days, trading was in the range of 131.50-132.50. The USD/JPY pair reached its highest level on Wednesday, a record high was set at 132.8370. After that, the pair began to fall below 130. The pair recorded a low just before the end of the trading week at 127.53, and ended the week just above the weekly low of 127.8340. The Japanese Yen ended last week on the front foot from both USD weakness driven by softening inflation in the U.S. as well as market hopefulness around a more aggressive Bank of Japan (BoJ). A change from the current ultra-loose monetary policy due to elevated inflationary pressures could be something that can take place next week. The Bank of Japan meets on January 18. EUR/USD For the EUR/USD pair, this week was in an uptrend. The pair started the week at 1.0669. And around 1.0660 it recorded its lowest weekly level. In the following days it was growing, exceeding the level of 1.07. On Thursday, the EUR/USD pair crossed the threshold of 1.08 and above this level reached the weekly maximum - 1.0870. The trade for the pair ended above 1.08 at 1.0828. European Central Bank (ECB) policymaker Martins Kazaks said there was no reason for markets to be betting on an interest rate cut. While the Fed is now widely expected to ease further policy tightening, ECB policymakers are scrambling to ensure markets understand their commitment to the hawkish outlook. GBP/USD The cable pair started the week at 1.2114 and finished much higher at 1.2234. GBP/USD traded the low for the week at 1.2097. The record high level in the week was reached by the pair at the level of 1.2242. GBP/USD has benefited from the broad-based selling pressure surrounding the US Dollar and reached its highest level since December 15 at 1.2250. The pair's near-term technical outlook suggests that the bullish stays intact. Gross Domestic Product Growth was 0.1% when the markets had been looking for a 0.2% contraction. However, as manufacturing and industrial production missed expectations. Interest rate support for sterling is likely to remain fitful as the economic numbers trickle out. Continued poor labor relations and the prospect of recession, possibly accompanied by a degree of ‘stagflation’ will keep the Pound a nervous bullish bet. AUD/USD The Australian pair started the week at 0.6901. In the following days, trading was in the range of 0.6865-0.6950. The lower border of the range was also the weekly low of the AUD/USD pair. The Aussie Pair's weekly peak traded close to the 0.70-0.6984 level. The pair finished trading near 0.70 at 0.6980 Source: finance.yahoo.com, investing.com

The downtrend of the USD/JPY pair and the rising trend of the Marlin oscillator dragged on in a counter move. Considering the fact that the oscillator is leading, as well as data showing a price reversal following the established trend of the oscillator, I expect the pair to rise, at least into a significant correction from a decline since October 21, 2022. If we don't run into surprises, the reversal will occur from the nearest support at 127.10, which we can see on the daily chart. The first bullish target will be the nearest enclosed line of the price channel around 129.80. Crossing it opens the way to the next line (133.70), which is close to the MACD indicator line. The MACD line acts as an independent level of support and resistance, if it coincides with any other graphic line that strengthens it. On the four-hour chart, there is a reversal of the Marlin oscillator. There are no other signs of reversal. But while these signs are forming, the price can still manage to reach the support 127.10.     Relevance up to 03:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332315

USD/JPY has sensed buying interest after dropping to near 127.20. The USD Index has recovered to near 101.60 despite the upbeat market mood. Downward-sloping 20-and 50-EMAs indicate more weakness ahead. The USD/JPY pair has retreated after sensing buying interest around 127.20 in the early European session. The asset has followed the footprints of the US Dollar Index (DXY) and has attempted a recovery. The USD Index has recovered to near 101.60 despite the upbeat market mood, which could result in a resumption of the downside journey. Meanwhile, the Japanese Yen bulls are likely to dance to the tunes of the Bank of Japan (BOJ) monetary policy, which is scheduled to be announced on Wednesday. The commentary from BOJ Haruhiko Kuroda will be keenly watched amid soaring chatters bout an exit from a decade-long ultra-loose monetary policy. USD/JPY is declining towards the horizontal support plotted from May 24 low at 126.36 on a daily scale. Downward-sloping 20-and 50-period Exponential Moving Averages (EMAs) at 132.10 and 135.36 respectively, add to the downside filters. The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, showing no signs of divergence and oversold, which might result in further weakness in the US Dollar. Going ahead, USD/JPY needs to drop below Monday’s low at 127.22, which will expose the asset for more downside towards the horizontal support plotted from May 24 low at 126.36. A slippage below the latter will open room for further downside toward the psychological support at 125.00. Read next: The Swedish Real Estate Market Will See Significant Price Drops| FXMAG.COM On the flip side, a decisive move above December 20 low at 130.57 will drive the asset toward January 9 low at 131.31 followed by January 12 high at 132.56. USD/JPY daily chart  

At the start of the new trading week, the dollar-yen pair updated its multi-month price low, reaching 127.25. The pair was last in this price area in May last year. The yen is strengthening ahead of the Bank of Japan's January meeting, which will be held the day after tomorrow, January 18. Traders ignore Kuroda Rumors that the Japanese regulator will continue to move towards monetary policy normalization are supporting the national currency. In my opinion, Bank of Japan is really on the threshold of cardinal changes, but these changes will probably take place not in January but in the spring of this year, when a new leader will take over the helm of the Japanese central bank to replace the consistent "dove" Haruhiko Kuroda. All of his potential successors are delivering rather hawkish messages, while Kuroda himself maintains a dovish attitude. Therefore, one should not expect any sensations from the January meeting: the current head of the central bank will most likely repeat the previously announced messages about commitment to accommodative policy. Nevertheless, the yen continues to strengthen its position, despite Kuroda's soft comments. The USD/JPY pair has been within the downward trend since October last year, when the Japanese authorities re-conducted a currency intervention. Then a series of events followed in favor of the development of a bearish scenario: first, the dollar weakened throughout the market (against the background of slowing inflation in the U.S. and rumors of a slowdown in the Fed rate hike), and then the Bank of Japan unexpectedly doubled the yield ceiling on 10-year bonds. According to a number of experts, the central bank has taken only the first step towards normalizing monetary policy. And although Haruhiko Kuroda, as they say, "directly" refuted this assumption (stating that this decision was due to "market-technical reasons"), traders, apparently, are betting that the regulator will further weaken its policy of control over the yield curve in the future or even abandon it altogether. The market is increasingly talking about the possible implementation of such a scenario. Recall that yield curve control was one of the key factors behind the 12% devaluation of the Japanese currency against the dollar. And after the Bank of Japan expanded the range of yield tolerance from the target level in December, the yen strengthened by more than six percent. It is noteworthy that traders ignore Kuroda's dovish statements, who not only refutes hawkish intentions, but also expresses readiness for further steps to ease monetary policy. Despite such announcements, there is growing confidence in the market that the Bank of Japan will announce further adjustment to the yield curve management procedure or even abandoning it in the coming months. Some analysts suggest that this will happen as early as Wednesday, following the results of the January meeting. Read next: Lowering The Price Of Electric Vehicles Is Supposed To Be Tesla's Unusual Strategy To Generate Demand In The US Market| FXMAG.COM Downward outlook for USD/JPY In my opinion, market expectations are too high, so the results of the January meeting of members of the Japanese regulator may not be in favor of the yen. But the trading principle "buy on rumors, sell on facts" is now playing on the side of the USD/JPY bears: during the Asian session on Monday, the yen was in high demand. Setting aside intraday price fluctuations, we can assume that the pair retains the potential for further decline, both in the medium and long term. First, don't forget about the weakening dollar. The latest CPI growth report, which reflected a slowdown in U.S. inflation, put pressure on the greenback. The probability of a 25-point rate hike at the Fed's February meeting rose to 93%. In addition, the market again started talking about the fact that the Fed may end the cycle of raising interest rates ahead of schedule, and its final level will be below the aanounced level of 5.1%. Secondly, the yen will only strengthen its position in the near future, even if the outcome of the Bank of Japan's January meeting is not in its favor. In just 3.5 months, Haruhiko Kuroda will leave his post, while his likely successors, in one form or another, say that the Japanese regulator may have to make the next steps towards normalization of monetary policy. In particular, former Vice Minister of Finance for International Affairs Takehiko Nakao said he supports a smooth departure from the central bank's ultra-loose monetary policy. Another contender, Columbia University professor Takatoshi Ito, voiced a similar position. Technical picture of the pair The technical picture also speaks about the priority of the downward scenario: on the daily chart, the pair continues to be on the lower line of the Bollinger Bands indicator, as well as under all the lines of the Ichimoku indicator, which shows a bearish Parade of Lines signal. Considering medium-term and long-term trading, it is advisable to use corrective bursts to open short positions to the first support level at 127.25 (the price low of the current year) and 126.50 (the lower line of the Bollinger Bands indicator on the weekly chart).   Relevance up to 09:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332370

The dollar started the week on the back foot to a seven-month low against a basket of major competitors in Asian trading, with the yen in particular, as investors increased bets that the Bank of Japan would further improve its yield control policy. USD/JPY Year-on-year PPI by the end of December amounted to 10.2%, above the previous forecasts of 9.5% and 9.7%. The month-on-month figure for December was 0.5%, above 0.3% expected and 0.8% earlier. The data revealed upward revisions. From a macro perspective, the soaring PPI is problematic for corporate Japan, with companies facing a dilemma related to rising production costs. The upcoming central bank meeting, expectations of an upward revision of the bank's inflation forecast, and the imminent announcement of a new BOJ chairman are also likely to fuel expectations for a policy change. A generally positive tone around the equity markets undermines the safe-haven Japanese Yen and lends some support to the USD/JPY pair. Now the pair is above 128.20. Source: investing.com Source: finance.yahoo.com AUD/USD The AUD/USD pair started the new week on a positive note and climbed to its highest level since mid-August during the Asian session, surpassing the 0.70 level. Unfortunately, the Australian pair failed to hold above 0.70 and is now trading above 0.6970. Iron ore, Australia's main export, fell slightly on Monday but remains well above its low of last October. Tomorrow, China's GDP data will be watched closely for clues on the health of the world's second-largest economy. Higher commodity prices and China's quick re-opening from Covid restrictions have also supported the currency, with Australia's main trading partner partially lifting restrictions on Australian coal exports after an unofficial ban in 2020. Markets are currently divided over whether the RBA will make another rate hike in February. Read next: McDonald's Will Be Replaced In Kazakhstan By The Russian Vkusno & Tochka| FXMAG.COM EUR/USD EUR/USD showed a decent gain after breaking the critical resistance of 1.0840 in the Asian session. Although the EUR/USD pair failed to hold above 1.0840 and then dropped significantly, it has recovered and is trading above 1.0830. The publication of the expected decline in the US consumer price index (CPI) for December increased the chances of further slowing down the pace of policy tightening by the Fed. It is worth noting that in December the Fed announced a less hawkish monetary policy. The Fed raised interest rates by 75 basis points (bp), but after observing a significant decrease in inflation, it may change the scope of the increase. In the euro area, the European Central Bank (ECB) wants to reach the final interest rate faster. ECB Governing Council member and French central bank governor Francois Villeroy de Galhau, quoted last week, said the central bank should aim to reach its final interest rate by the summer. GBP/USD GBP/USD halted the correction, recovering to 1.2200 in the European session on Monday. The US dollar continues to rebound despite betting on smaller rate hikes by the Fed. Furthermore, a bank holiday in the US market could also keep volatility high around the GBP/USD pair with limited liquidity. Attention is now focused on the testimony of Bank of England (BoE) Governor Andrew Bailey before the Treasury Select Committee of the UK Parliament. Source: investing.com, finance.yahoo.com

Summary:  The highly-watched Bank of Japan policy decision due Wednesday has spooked tremendous volatility and warrants a cautious stance. But whether we see further policy tweaks this week or not, speculation for BOJ to remove its yield curve control will likely to build into BOJ chief nominations due February 10, spring wage negotiation in March and a change of hands at the helm in April. There is a lot at stake with regards to the upcoming Bank of Japan decision on January 18. Quiet unusual for those who have spent years covering Japan macro and realize how it was so easy to miss headlines from BOJ meetings previously. But with the implied volatility in overnight USDJPY options at over 50%, the highest levels since 2016 (see Chart below), all eyes will be glued to the BOJ announcements this week. USDJPY traded to lows of 127.23 on Monday before rising back towards 129 on Tuesday morning – all this despite the US bond markets being closed on Monday. Enough reason to believe that the focus for the Japanese yen has moved to domestic events, rather than being a pure play of yield differentials. USDJPY Overnight Option Implied Volatility. Source: Bloomberg, Saxo Markets Why BOJ could further tweak its policy this week? The surprise December move to shift the ceiling of the trading band for 10-year Japanese government bonds from 0.25% to 0.5% was the first step to removing massive stimulus Bond yields have since tested the new cap, and breached it for the last three consecutive days prompting the BOJ to announce unscheduled bond buying worth over 10 trillion yen. A local media report last week also said that the central bank will evaluate the side effects of its massive monetary policy easing, which fuelled further speculation that another policy tweak may be on the cards. December Tokyo CPI touched 4% levels and the latest PPI numbers have risen to double digits at 10.2% YoY, suggesting Japan’s inflation has not yet started to cool Increasing case of a global soft-landing would likely continue to support Japan’s exports and overall growth But the BoJ loves to surprise the markets. With so much speculation built in for this week’s tweaks, officials may rather choose to wait to see the full impact of last month’s move before taking further action. But whether the BOJ announces a change this week or not, bears are unlikely to give up with Governor Kuroda set to retire in April and the next BOJ chief will likely be under pressure to exit negative rate policy before too long. That selection process could be taking place over the next month, with nominations likely by February 10. Hawkish names would spur further expectations that the BOJ will eventually end its YCC policy. Thereafter, focus will shift to spring wage negotiations due in March. Many Japanese corporate, including Uniqlo owner Fast Retailing, Nippon Life Insurance and Suntory Holdings, have already announced wage hikes. BOJ Governor Kuroda continues to emphasise the need for wage growth in Japan to consider removing stimulus. Finally, the change of hands at the helm of the BOJ in April, with a new Governor and two new deputy Governors set to take charge, could further continue to fuel speculation of a policy shift. So the direction of where this is headed seems correct, but the timing is uncertain. It may be worth considering a bearish outlook on Japan equities (JP225) and a positive outlook on Japanese banks (Topix Bank ETF), but the current volatility levels suggest a cautious stance may be warranted this week.   Source: Macro Insights: Bank of Japan meeting playbook – bracing for volatility | Saxo Group (home.saxo)

USD/JPY picks up bids to extend the week-start rebound from the lowest levels since May 2022. Upbeat RSI backs confirmation of bullish chart pattern to tease buyers. 200-HMA acts as final defense of buyers, 50-HMA guards immediate downside. USD/JPY refreshes intraday high around 129.15 as it pierces the neckline of a two-day-old inverse head-and-shoulders (H&S) bullish chart pattern during early Tuesday, retreating to 129.00 by the press time. Not only the inverse H&S confirmation but the upbeat RSI (14), not overbought, also adds strength to the USD/JPY rebound from the lowest levels since late May 2022. As a result, the Yen pair buyers are well-set to approach the 130.00 round figure before aiming for the theoretical target surrounding 130.40. It’s worth observing that the RSI line is approaching the overbought territory and may probe the USD/JPY bulls around 130.40, if not then the 200-HMA level surrounding 131.25 will be in focus. Additionally, the 131.00 round figure could act as an extra filter towards the north. On the flip side, the resistance-turned-support line of the stated inverse H&S, around 128.75 by the press time, restricts the immediate downside of the USD/JPY pair ahead of the 50-HMA level near 128.30. In a case where the Yen pair remains bearish past 128.30, the monthly low around 127.20 and May 2022 low near 126.35 will gain the market’s attention. Overall, USD/JPY is likely to witness further recovery but the upside room appears limited. USD/JPY: Hourly chart Trend: Further recovery expected

USD/JPY traders are feeling nervous. The Bank of Japan will sum up the results of its 2-day monetary policy meeting on Wednesday. Now any surprise from the BOJ could have a significant effect. The culminating event of the week in the currency market should be the Japanese central bank's monetary policy meeting, which kicked off on Tuesday. With inflationary pressures intensifying in Japan and chaos reigning in the local bond market, many investors believe that the BOJ could announce a major policy shift this week, like it did last month. Recall that the BOJ tweaked its Yield Curve Control policy (YCC) in December, causing the yen to rise sharply against the dollar. Since then the pair has fallen over 6% and its future prospects are not bright at all. Investors clearly see that the BOJ is in a difficult predicament. Its decision to widen its tolerance range for 10-year bond yields was dictated by a desire to improve market functioning, as the bond market faced a liquidity problem. But the measure has made the situation even worse. By changing the YCC, the BOJ stoked the flames of market speculation about its possible surrender. This in turn provoked a massive sell-off in 10-year Japanese Government Bonds (JGB), which pushed their yields up. Since last week, the central bank has been trying its best to keep the index within the new limits by conducting daily emergency operations to buy JGBs. However the yield of 10-year JGBs is still growing above the set ceiling. That's what leads investors to think that the BOJ will be forced to further increase the permissible range of long-term bond yield fluctuations from its 0% target at the January meeting. If the BOJ makes such a decision again, it will serve as a great catalyst for the yen. In the short term, the USD/JPY risks falling below its 7-month low at 127.22. An even greater threat to the pair is the development of a radical scenario, which implies a complete abandonment of the BOJ's YCC policy. If the central bank decides to burn all bridges, USD/JPY will go into a prolonged free-fall. "The 10-year JGB yield could rise as high as 1% if the BOJ abandons yield curve control this week," according to estimates by Daiwa Securities strategist Eiichiro Tani. This negatively affects the movement of the pair. According to analysts at Goldman Sachs, the next YCC correction will help the yen strengthen against the dollar by more than 3%, to the level of 125, and an abandonment of the YCC will open a fast way to even higher levels for the Japanese currency. It's worth noting that US bank analysts don't even consider the latter scenario. Most of Goldman Sachs' analysts expect the BOJ to keep YCC in place with possible further tweaks to improve its sustainability. Financial analyst Barbara Rockefeller is of the same opinion. She believes that we should not expect the BOJ to take impulsive actions in the form of abandoning the YCC or a sharp change in the monetary course. "Allowing a giant move from 25 bp to 1% in under a month is too wild for any central bank, let alone the staid BoJ. So, abandonment is almost certainly out of the question, but that doesn't mean the market will not be expecting it and testing prices, forcing the bank to buy more bonds. We expect a whole lot of backroom arm twisting," Rockefeller said. According to ING economists, the USD/JPY pair can fall sharply ahead of the results of the BOJ meeting. They suspect USD/JPY can trade down to 126.50 before Wednesday. As for the dynamics of the dollar-yen asset after summing up the results of the BOJ meeting, everything depends on the market's reaction to the rhetoric of the Japanese officials. If it is considered hawkish, the quote will fall, as I mentioned before. If the central bank stays true to its dovish principles, in the short-term, the pair may show a steady recovery from the recent lows. By the way, this scenario is followed by all economists recently surveyed by Bloomberg. Experts expect the BOJ to refrain from any changes at its January meeting. But the probability they are wrong is quite high, because last month none of the 47 economists surveyed by Bloomberg was able to predict YCC changes   Relevance up to 08:00 2023-01-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/332473

The Japanese yen is in calm waters on Tuesday, as the Bank of Japan’s two-day meeting starts today. In the European session, USD/JPY is trading at 128.76, up 0.18%. Markets eye BOJ meeting The markets are keeping a close eye on the BOJ meeting. The central bank shocked the markets at the December meeting with a policy tweak that widened the bank around 10-year JBs to 0.50%, up from 0.25%. The speculation that the BOJ could follow through with additional moves at this meeting has pushed USD/JPY back below the 130 level. On Monday, USD/JPY touched 127.21, its lowest level since May. It seems likely that further moves are coming from the BOJ, but it’s unclear whether the BOJ will announce the changes on Wednesday or will wait until the new BOJ Governor takes over in April. Unlike the Fed, the BOJ appears to have no interest in telegraphing its plans and is keeping mum, which is making this meeting that much more dramatic. I expect to see some volatility from USD/JPY on Wednesday – if the BOJ does make any policy tweaks, the yen will likely continue to improve. Conversely, if the BOJ maintains the status quo, traders will be disappointed at the lack of action and the yen would likely lose ground. The BOJ has spent over six trillion yen ($86 billion) since Friday to defend its new 0.50% cap on 10 JGB, as sellers continue to flood the bond market. The central bank could widen the band to 0.75% or make a radical change and discard its yield curve control altogether. Let’s not forget that the BOJ is expected to increase its inflation forecast at the meeting, which would mark a step closer to normalization and would be bullish for the yen. USD/JPY Technical There is resistance at 129.40 and 130.82 128.40 and 127.54 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The US dollar is under pressure as the market seems to expect the Federal Reserve to ease its aggressive monetary policy later this year. USD/JPY The yen was close to a seven-month high as investors took a breather ahead of a potential change in policy at the Bank (BOJ). At the last meeting, the Yield Curve Control (YCC) program was changed, setting a range of +/- 0.50% around zero for Japanese government bonds (JGB) for up to 10 years. They previously targeted +/- 0.25% around zero. While they are not expected to change their prime interest rate, which currently stands at -0.10%, another change to the long-term yield target range is being discussed. Today, USD/JPY managed to break above 129 but failed to hold. The USD/JPY pair stabilized above 128.50. AUD/USD The Australian dollar jumped towards yesterday's six-month high against the US dollar, with China's GDP much better than forecast. China's GDP printed at 2.9% year-on-year in the fourth quarter versus expectations of 1.6% and 3.9% previously. At the same time, other Chinese data were released, and industrial production for the year to end-December was 1.3% instead of the expected 0.1%. On the monetary policy side, the local market favors a quarter-point hike from the Reserve Bank of Australia (RBA) to 3.35% in February, with some chance it could stop at its first meeting since May. Australian government bond yields remained stable, albeit close to last week's one-month lows. Monday's drop in the AUD/USD pair did not affect the prevailing uptrend. The pair of the Australian in the morning session was approaching the key level of 0.6975, the pair managed to exceed this level, but did not hold it and fell in the European session. Currently the Aussie Pair is trading above 0.6955. Read next: Alibaba And Its Share Buyback Program Which Is Supported By Ryan Cohen, Microsoft Corp. Plans To Incorporate AI Tools| FXMAG.COM GBP/USD The British pound edged higher on Tuesday after data showed a tight labour market and accelerating pay growth. GBP/USD trades above 1.2200, bouncing back from daily lows after the UK jobs report. The UK unemployment rate stabilized at 3.7% in November, while average hourly earnings rose more than expected. GBP/USD raises bids to reverse early-week pullback from monthly high. Broad US dollar pullback lays foundation for cable pair recovery ahead of key jobs report. Talks of Brexit labor shortages, UK labor strikes and British Prime Minister Sunak's difficulties are being explored by the GBP/USD bulls. The Bank of England is expected to raise interest rates at its tenth consecutive meeting on February 2 in an attempt to bring inflation down further. Today's UK employment data becomes more important for GBP/USD traders. The pair traded close to 1.2200 in both the Asian and European sessions and also fell below 1.2200. Currently, the cable pair is rising and trading above 1.2260 EUR/USD The latest German economic sentiment index, ZEW, rose in January, beating both last month's reading and market forecasts. The positive reading, the first since February 2022, points to "a notable improvement in the economic situation over the next six months" Today's ZEW release had little or no impact on the euro, which has been treading water against the US dollar so far. EUR/USD remains above 1.0800. The euro is expected to take center stage as the European Central Bank (ECB) aims to peak interest rates by the summer. The EUR/USD pair started Tuesday trading around 1.0830. In the European session it fell below this level. It managed to cross 1.0840 but dropped to around 1.0835 Source: investing.com, dailyfx.com, finance.yahoo.com

The USD/JPY pair strengthens the reversal signs every day. Now it is the reversal of the signal line of the Marlin oscillator from the lower limit of its own ascending channel, confirmed price reversal from the enclosed line of the global price channel around 127.14, settling above the median line of the descending price channel in green. Now the resistance and target levels are as follows: 129.80 - the price channel line, 131.10 - the upper limit of the price channel, 133.65 - the embedded line of the global channel, where the MACD line is approaching. On the four-hour chart, the Marlin oscillator broke into the green zone this morning. This is a good thing, since the price has to fight with the resistance of 129.80, near where the MACD line is.   Relevance up to 03:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332562

The spike higher is confirmation that wave b of B completed with the test of 127.22 and wave c of B now is in progress towards the 138.20 - 138.73 area to complete the expanded flat correction in wave B. The ongoing c-wave should unfold in five sub-waves and end above the termination point of wave a at 134.77. That said, we must remember that B-wave has an endless variety of wave combinations at its disposal, making them very difficult to decipher. That doesn't mean that the Elliott wave principle doesn't apply, it absolutely does, but the waves don't really reveal themselves until the very last minute.   Relevance up to 06:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/309037

The dollar-yen pair soared by more than 350 points during the Asian session on Wednesday, reacting to the results of the January meeting of the Bank of Japan. If yesterday the pair fixed a low at 128.02, at the moment, the price has peaked at 131.60. Traders are playing back the "dovish" results of the January meeting of the members of the Japanese regulator. Expected "sensation" On the one hand, nothing sensational happened today. The previous rhetoric of the head of the central bank, Haruhiko Kuroda, was clearly dovish: he did not get tired of repeating that the December decision to expand the allowable range of fluctuations in the yield of ten-year government bonds does not indicate a reversal of the monetary rate of the central bank. Therefore, it would be surprising if he changed his position and supported the next steps to normalize monetary policy at the January meeting. On the other hand, traders, contrary to Kuroda's dovish assurances, still bet (judging by the behavior of the yen) that the Bank of Japan would make further adjustments to the policy of controlling the yield curve or completely abandon it. Note that the yield of Japanese government bonds on Monday again exceeded the new target yield range, reaching 0.51%. But in the end, the conservatism of the consistent "dove" Kuroda won. The Japanese central bank has made it clear that it does not intend to abandon the ultra-loose monetary policy, which it has adhered to for years. The regulator kept the parameters of the monetary policy and worsened the forecast for the growth of the Japanese economy. The short-term interest rate on deposits of commercial banks with the central bank was left at -0.1% per annum, the target yield on ten-year government bonds is near zero. No changes were made to the yield range. Also, there are no changes in the central bank's outlook on interest rates. Disappointing (for the yen) macroeconomic forecasts The Bank of Japan's quarterly outlook report said the country's economy is likely to recover weakly "as the effects of the coronavirus pandemic and supply constraints ease." At the same time, price growth is expected to "narrow by the middle of the next fiscal year" (in Japan, the fiscal year, as you know, is set from April 1 to March 31). According to the central bank's economists, prices may deviate to the downside "because wage growth will not increase as expected." Inflation is estimated to be around 3% this fiscal year and decline to 1.6% next year. In addition, the Bank of Japan worsened its forecast for the country's GDP growth in the current fiscal year from the previously expected 2%. Arguing for its decision, the central bank pointed to a slowdown in economic growth abroad and high prices for raw materials. The regulator also worsened its forecasts for the next fiscal year (2023): economy is estimated to grow by 1.7% against the previous estimate of 1.9%. Summing up all of the above, in the "bottom line," we have the following situation: 1) the Bank of Japan has retained the range within which the yield of 10-year government bonds can fluctuate (+/- 0.5%); 2) allowed (predicted) a slowdown in inflation in the second half of 2023; 3) worsened the forecast for the growth of the country's economy—both in the current fiscal year and next. It's too early to write off the yen The announced results of the January meeting a priori do not imply tightening monetary policy. And yet, it is not worth writing off the Japanese currency. Moreover, it is risky since many market participants surely desires to make money on the upward dynamics of USD/JPY. This is a rather risky venture as the upward momentum may fade by medium-term, and the pair will turn downward again. First, in just three months—in April of this year—Kuroda will leave his post after 10 years in office. Despite the actual inaction of the central bank at the January meeting, the pressure from the market will not disappear anywhere, and will only increase over time. While the likely successors of Haruhiko Kuroda at least allow for a scenario in which the central bank will take further steps to normalize the monetary policy. Secondly, the yen may be supported by inflation, which, apparently, is not going to slow down in Japan. On Friday, January 20, key inflation data for December will be published. According to preliminary forecasts, the general consumer price index will show an increase in inflation by 4.0%. If the indicator comes out, at least at the forecast level, it will be a new high for the last 41 years. The CPI excluding fresh food prices should also show positive dynamics (expected to rise to 4.1%), as well as the consumer price index excluding food and energy prices (this indicator should rise to 3.0%). Recall that the corporate goods price index published the day before yesterday (which measures the prices of goods purchased by Japanese corporations) rose in December by 10.2% year-on-year, exceeding the average market forecast of growth by 9.5%. If the inflation figures comes out, at least at the forecast level (not to mention the "green zone") on Friday, the yen may again begin to enjoy increased demand, despite the "dovish" results of the January meeting. Conclusions Thus, at the moment, it is best to take a wait-and-see position for the USD/JPY pair, watching the price move upwards. As the upward impulse fades, short positions can be considered with the first target at 128.70 (the middle line of the Bollinger Bands indicator on the four-hour chart) and 127.25 (the lower line of the Bollinger Bands on the same timeframe)   Relevance up to 07:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332590

The Bank of Japan defied hawkish speculation and held policy steady this morning, sending the yen lower. Some market confusion was also generated by a headline suggesting the European Central Bank is mulling slower rate hikes: clarifications may come from Davos by the end of the week, and the euro may recover. In the US, the data calendar picks up again The Bank of Japan in Tokyo USD: US data back in focus An exceptionally grim Empire Manufacturing reading for January has been the only noteworthy data release out of the US so far this week, and the dollar has continued to be a bystander as developments in Japan, Europe and China drive most market moves. Today, retail sales, PPI, industrial production and TIC flows data will be in focus. The market's scrutiny over the US economic outlook has grown exponentially since the ISM service report pointed to an imminent recession: expect more pain for the dollar should fresh signs of a slowdown emerge now that the US data calendar is picking up again. The Fed’s Raphael Bostic, Patrick Harker and Lorie Logan are set to speak today. The fall in the yen after the BoJ announcement (more details in the JPY section below) is offering some relief to the dollar this morning. However, we suspect this may only prove temporary and downside risks into the 101-102 area still prevail in the very near term. After all, the global environment continues to be rather benign for the ongoing rerouting of flows into emerging markets and high-beta currencies. The growing feeling that China may face a reality check on the sustainability of looser Covid rules may be contributing to halting CNY gains, but recent data gave reasons for optimism on Chinese growth, as noted by our colleague Iris Pang here. We are also approaching the lengthy Chinese New Year holiday season, which may be keeping some investors on hold before moving significantly into Chinese assets. Our commodities strategists have revised their forecasts for iron ore and copper prices higher on the back of China’s reopening. A demand-driven improvement in the metal price outlook is an ideal scenario for commodity currencies: the Australian dollar is a good example here, also considering the tentative conciliatory steps in Sino-Australian diplomatic relations. Indeed, the Reserve Bank of Australia's policy remains an open question: the resilience of inflation poses risks to our conservative call for only two more 25bp hikes before the end of the hiking cycle, and could add some more steam to the AUD rally. A 0.70-0.72 range could easily become the norm for AUD/USD in the next few weeks. Francesco Pesole EUR: Conflicting news Yesterday was a day of conflicting headlines for the euro. In a long interview to the Financial Times, Chief Economist Philip Lane offered elaborate reasoning to support the ECB’s recent hawkish rhetoric. However, later in the day, a Bloomberg report cited some ECB officials saying that Governing Council members are actually considering a slower pace (25bp) of tightening. EUR/USD dropped below 1.08 on the news. It does seem premature for the ECB to unwind its hawkish narrative just yet, and we would not be surprised to see some remarks aimed at “mitigating” yesterday’s dovish headline. Francois Villeroy (today) and President Christine Lagarde (tomorrow) have a chance to do so in Davos. Either way, the overall environment looks likely to stay largely supportive for EUR/USD and a return to 1.0850-1.0900 seems possible by the end of this week. Other conflicting headlines came from Germany. Chancellor Olaf Scholz said he’s sure that Germany will avoid a recession, while his finance minister suggested in a previous interview that there will indeed be a recession, but it should be very mild. The ZEW expectation survey (which spiked into positive territory yesterday) surely seemed to favour more optimism on the German outlook, and undoubtedly fed into the divergence in growth narratives between the eurozone (increasingly upbeat) and the US (increasingly downbeat). This ultimately makes us believe EUR/USD can stay mostly supported for now. Francesco Pesole GBP: Inflation matches expectations December CPI numbers were released in the UK this morning and largely matched consensus expectations. Headline inflation decelerated from 10.7% to 10.5%, while the core rate held at 6.3%. With the peak apparently past us, we could see headline inflation return to 6% in the summer and 3.5-4% by year-end, according to our economists. It’s important to note that core services jumped from 6.4% to 6.8%, a development that the BoE should particularly take into consideration, and when added to yesterday’s wage data should tilt the balance towards a 50bp hike in February. EUR/GBP is back to pre-Christmas – sub-0.8800 levels – thanks to some idiosyncratic EUR underperformance and a supported pound. As discussed in the euro section above, ECB-related weakness in the euro may not last long, and EUR/GBP may struggle to trade sustainably below 0.8800 for now – also given the lack of strong bullish forces in the pound. Francesco Pesole JPY: No hawkish surprise by the BoJ The Bank of Japan’s decision to leave its policy tools unchanged has seen USD/JPY live up to its pricing as one of the most volatile pairs in the G10 space. We expect that to continue. The big correction higher in USD/JPY may endure for a little while. This is because the BoJ’s forecasts for CPI ex-food remain below 2% for FY23 and FY24 and could make the case for the new BoJ governor in April to continue with the current ultra-loose policy. Yet USD/JPY is down at 130 on both the BoJ and the dollar story. We look for a broadly weaker dollar – especially in the second quarter when US core inflation should fall more quickly. This means USD/JPY should again come under pressure from the dollar side. And plenty of speculation over a BoJ policy shift in April should limit USD/JPY upside too. We see this correction stalling in the 132.50/133.00 area (outside risk to 135), with a bias to 126/128 for the end of the first quarter. Later in the year USD/JPY will probably be trading under 125. Chris Turner Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

In keeping its key rate and yield curve control policy unchanged at today's meeting, the Bank of Japan probably wanted to convey a message to the market; don't fight the BoJ. After the decision, the Japanese yen plunged to the 131 level while the 10Y JGB yield reached 0.38%. We think market volatility can continue for a while yet     Bank of Japan Governor Haruhiko Kuroda -0.1% Policy balance rate   As expected 0.0% 10-year JGB yield target   As expected BoJ watch The next BoJ meeting will be held on 9 and 10 March, the last of which will be led by Governor Haruhiko Kuroda. His successor's nominee will be submitted to the parliament around 10 February and thus we will know who will replace him by then. We think it will be difficult to make a major policy change at his last meeting, and so the next move should be taken after the new governor comes on board. Although Governor Kuroda emphasised today that there is no need to widen the yield range further and yield curve control is sustainable, this view could change under the new governorship. As such, we think that today's comments will only be valid until early April. We maintain our view that the BoJ will keep its negative policy rate and yield curve control policy by the end of 2023, for now. We expect the new governor to first adjust the BoJ's forward guidance and then call for a policy review, but we will revisit our BoJ policy outlook once we know who is the next governor. The BoJ downgraded its GDP outlook The Bank of Japan also released its latest forecast for economic activity and prices today. The BoJ trimmed down its GDP outlook for FY22 from 2.0% year-on-year to 1.9% and from 1.9% to 1.7% for FY23. Meanwhile, in the case of CPI, the FY22 forecast is slightly raised from 2.9% to 3.0%, but the FY23 forecast remains unchanged at 1.6%. The new set of forecasts indicates that the BoJ will continue to pursue its 2.0% "sustainable" target as the recent higher-than-usual CPI is only transitory and will soon pass the peak. We believe that risks to growth are skewed to the downside based on recent weak activity and forward-looking data thus the economy is not ready for a reduction in stimulus yet.  A lower growth outlook Source: BoJ USD/JPY: A volatile bear trend The BoJ’s decision to leave its policy tools unchanged clearly disappointed an FX market positioned for further adjustment. Arguably the market had got ahead of itself, where the recent run-up in two-year yen swap rates to 0.30% suggested that a rate hike might even be on the table in the not-too-distant future. These swap rates have now dropped back to 0.15%, taking the yen with them. USD/JPY remains priced as one of the most volatile currencies in the G10 FX space and notably delivers on those expectations of volatility. One week realised volatility is being delivered at 20% versus the priced levels of 19%. We expect that volatility to continue, especially in the March/April window when Governor Kuroda will hand over the reins of the BoJ governing board. USD/JPY has been at the vanguard of the broad dollar decline since October – helped in part by the $70bn of FX intervention undertaken by Japanese authorities. We expect further broad dollar weakness this year as Federal Reserve easing expectations build in the second quarter. This should probably mean the current USD/JPY correction stalls in the 132.50/133.00 area, with outside risk to 135. We have an end 1Q23 target of 128 and our current year-end target of 125 should probably be closer to 120. JGB: No change in YCC means more JGB purchases, but slow foreign spillover Even after the BoJ’s failure to lift the YCC cap on 10Y JGB yields once more after its December move, it seems the widely held view in the market is that that cap will have to be lifted, or removed altogether, at some point this year. Even after today’s drop, 10Y JPY swaps still trade around 0.80%, well above the JGB cap, and we expect them to return to the 1% area soon. Trading JGBs has become a risky endeavour with shorts prohibitively expensive and longs liable to get run over by another surprise move by the BoJ. Delaying further changes to YCC will likely force it to continue purchases The BoJ has reportedly bought JPY 34tn of JGBs since its decision to lift the cap from 0.25% to 0.50% in December. Delaying further changes to YCC will likely force it to continue purchases even if selling pressure slows in the coming days. Cornering the JGB market even more does not sit well with the stated aim of improving JGB market functioning in our view, but it seems a willingness to shield broader markets and the economy from too abrupt a move has taken precedence. Japanese investors were net sellers of foreign bonds for most of 2022 Source: Japanese Ministry of Finance, ING   We think the short-covering seen in Treasuries and Bunds today overstates the spillover from BoJ decisions into foreign markets. As JGB yields rise, and rate differentials narrow, we think Japanese investors will increasingly favour domestic bonds over foreign ones. This should occur progressively, however. Net selling of foreign bonds already started in 2022 and only amounted to $14bn equivalent per month. This will add up over time, but this is not enough to change the trajectory of the US and European bond markets on their own. Read this article on THINK TagsJPY JGB yields Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more  

Summary:  The focus is squarely on the Bank of Japan decision today and significant volatility may be on the cards. Mixed earnings, ranging from a weaker Goldman Sachs report but better-than-expected Morgan Stanley results, kept the US equity markets broadly range-bound. China’s activity data surprised to the upside, but population decline is a concern. Stage is being set for a dovish turn in the ECB, and UK’s CPI will be on the radar today. Industrial metals regained momentum, while Gold continues to face correction risk.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) finished nearly unchanged while the Dow Jones Industrial slipped 1.1% on Goldman’s miss in earnings Nasdaq 100, up 0.1% and S&P 500, down 0.2% were little changed in a choppy session, supported by a 7.4% gain in Tesla (TSLA:xnas) and an increase of 4.8% in Nvidia (NVDA:xnas).  The Dow Jones Industrial however fell 1.1%, dragged by the declines of 6.4% in Goldman Sachs (GS:xnys) and 4.6% in Travellers (TRV:xnys). Goldman Sachs reported a 66% Y/Y fall in Q4 earnings to USD3.32 per share, much below the USD5.56 consensus estimate. On the other hand, Morgan Stanley (MS:xnys) rose 5.9%, after reporting a 40% fall in earnings to USD1.26 per share, beating the USD1.25 expected by street analysts. Among sectors in the S&P, the material sector, falling 1.1%, was the biggest laggard. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) ended mixed as curve steepened A much weaker-than-expected print of the Empire Manufacturing Index, shrinking to -32.9 vs consensus of -8.7, and a Bloomberg report suggesting that the ECB may slow its next rate hike to 25bps in March from 50bps, saw the yields on the Treasury front ends lower. Yields on the 2-year fell 3bps to 4.20%. Yields on the longer ends however rose. The 10-year notes finished 4bps cheaper at 3.55%. On Wednesday, traders are eyeing the outcome from the Bank of Japan. Hong Kong’s Hang Seng (HIF3) retreated and China’s CSI300 (03188:xhkg) was flat despite Q4 GDP better than feared The Hang Seng Index pulled back 0.8% and the CSI300 Index was flat despite China’s Q4 GDP, industrial production, retail sales, and fixed asset investment coming in better than feared. Q4 GDP grew 2.9% Y/Y (consensus 1.6%; Q3: 3.9%). Healthcare names were the biggest drag to the Hang Seng Index as Wuxi Biologics (02269:xhkg) tumbled 6.1% on placement by its majority shareholder. XPeng (09868:xhkg) slipped 2.3% after cutting the prices of its EVs by around 12% and dragged down the share prices of other EV makers. Chinese property names finished the session mixed in a tug-of-war between optimism from supportive policies and continuously sluggish sales data. China’s residential property sales fell 26.7% Y/Y in December. Infant and toddler product stocks fell on the record low 0.677% birth rate released in China. In A-shares, baijiu (Chinese white liquor), food and beverage, bank, media, and pharmaceutical names retreated while electronics, defense, and machinery stocks gained. FX: All eyes on JPY GBPUSD was the best performer in the G10 FX space on Tuesday, rising to test the 1.23 handle, as labor market data came in better than expected. Focus shifts to the UK CPI release today where a further deceleration in price pressures remains likely. NZD and AUD also gained further, bumped higher more so in the US session rather than China’s better-than-expected activity data in the Asian hours. AUDUSD may be looking at another break above 0.7000. EURUSD plummeted from 1.0869 to 1.0775 on dovish ECB expectations (read below). The key focus today however will be on USDJPY and yen crosses with BOJ decision due today. Crude oil (CLG3 & LCOH3) pushes higher Crude oil edged higher as OPEC set a more optimistic tone on demand. Secretary General Haitham Al Ghais said he’s optimistic about the outlook for the global economy. The oil producer group said that a potential slowdown in advanced economies is countered by accelerating growth in Asia. The market is expected to tighten as Russia’s supply suffers from G7 price caps and China’s demand recovery underpins. Meanwhile, the growing case of a soft-landing this year has cooled off global demand slowdown concerns, while reports of ECB’s slowing the path of its rate hikes (read below) also underpinned. WTI futures rose to $81/barrel while Brent was at $86. IEA’s monthly market outlook will be released today. Metals boosted by upbeat China data Better than expected economic data from China helped boost sentiment in the base metal sector. China’s December activity data came in better-than-expected, while protests in Peru continued to cloud the supply outlook for Copper. HG Copper was back above $4.20. Prices for Iron ore also rose in Singapore to back above $120, locking in gains of over 1%. Gold, however, continues to face correction risk as ETF flows and risk reversals have remained flat for weeks with no sign of demand despite the recent rally. We believe the direction in gold is correct but the timing is wrong, raising the risk of a short-term correction driven by recently established speculative longs.  Read next:GBP/USD Is Strengthening And Trading Above 1.2260, Investors Took A Breather Ahead Of The Bank Of Japan Meeting| FXMAG.COM What to consider? Bank of Japan meeting playbook – bracing for volatility The highly-watched Bank of Japan policy decision due Wednesday has spooked tremendous volatility and warrants a cautious stance. But whether we see further policy tweaks this week or not, speculation for BOJ to remove its yield curve control will likely to build into BOJ chief nominations due February 10, spring wage negotiation in March and a change of hands at the helm in April. Read our full preview here or listen to yesterday’s podcast. China GDP and activity data came in better than expected At 2.9% Y/Y, China’s Q4 GDP print was well above the consensus forecast of 1.6% while decelerating from 3.9% Y/Y in Q3. Full-year GDP growth came in at 3% in 2022, higher than the consensus forecast of 2.7%. Retail sales, shrinking 1.8% Y/Y in December (vs consensus: -9.0%, Nov: -5.9%), were better than feared. Nonetheless, the positive surprise largely came from a surge of 39.8% Y/Y in medicine sales and a rise of 10.5% Y/Y in food sales on stockpiling in December when China abandoned Covid-19 containment measures. Industrial production growth slowed to 1.3% in December, above the median forecast of 0.1%, from 2.2% in November. Fixed asset investment growth picked up to 3.1% Y/Y in December from 0.8% Y/Y in November, with infrastructure investment slower to 10.4% Y/Y in December from 13.9% Y/Y in November and manufacturing investment improved to 7.4% Y/Y in December from 6.2% in November. China’s population declined for the first time in six decades According to the National Bureau of Statistics, China’s population fell to 1.4118 billion in 2022, a decline of 0.85 million, from 1.4126 billion in 2021. The birth rate slipped to 0.677%, the lowest since records began in 1949. China is planning new restrictions on live streaming According to the Wall Street Journal, Chinese regulators are planning to impose new regulations to cap internet users’ digital tipping as well as tighter censorship of the content. ECB’s dovish surprise likely as inflation slows The ECB is considering a slower pace of rate hikes than Christine Lagarde indicated in December. While a 50bps increase next month remains the most likely outcome, a 25bps move in March is gaining support. Inflation in the Eurozone is slowing, and a sharp drop in natural gas prices suggest that we can continue to expect lower inflation in the months to come atleast until the 2023 winter risks emerge. The final CPI print for December for the Euro-are will be released today and ECB’s minutes of the December meeting are due tomorrow. Gloomy US survey data – NY Fed manufacturing The NY Fed's Empire manufacturing survey tumbled to -32.9 in January from -11.2 in December, well beneath the consensus -9 and marking the lowest level since mid-2020 and the fifth worst reading in the survey’s history. Both new orders and shipments plummeted sharply, and moderation in input and selling price growth was seen. Fed member Barkin (non-voter) repeated that median CPI is still too high, saying that he needs to see inflation convincingly back to target before Fed pauses rate hikes and that he is not in favour of backing off too soon. UK December claims data improves, November earnings data rises again, CPI up next The UK reported November Employment and earnings data yesterday, with the Unemployment Rate steady for the month at 3.7%, while Employment Change rose 27k vs. 0k expected. Average Weekly Earnings rose more sharply than expected at 6.4% YoY ex Bonus vs. 6.3% expected and 6.1% in Oct. Also out this morning were December Jobless Claims data, which rose 19.7k vs. 16.1k in November (revised down from 30.5k, while the Payrolled Employees Monthly Change rose +28k vs. +60k expected and the November number was revised down to +70k from +107k. UK CPI is due to be released today. Vietnam’s political shakeup The latest political shakeup in Vietnam highlights the stability risks that emerging markets generally face. President Nguyen Xuan Phuc has announced he is stepping down, sparking a potential power shift among the communist-ruled country's leaders. The news that he is quitting comes during an anti-corruption drive led by hard-liners. The shift in power could potentially have repercussions on the ability of Vietnam to continue to capture manufacturing moving out of China.   For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: D-day for Bank of Japan; ECB’s dovishness; China’s growth is a positive surprise but population falls - 18 January 2023 | Saxo Group (home.saxo)

Yesterday saw another positive session for European markets, although the FTSE100 underperformed despite hitting a new 4 year high. US markets returned from their long weekend break with a choppy and somewhat mixed session, with the Dow and S&P500 struggling while the Nasdaq 100 finished slightly higher, as various earnings announcements painted a mixed picture of the US economy. Bond yields also chopped between negative and positive territory as yields ended the day little changed. BoJ tweaks bond program Asia markets have spent the day still digesting yesterday's economic numbers from China, as well as today's Bank of Japan rate decision. The Japanese yen has seen some decent gains over the past few weeks, with those gains accelerating after the Bank of Japan caught markets by surprise last month by widening the band of its yield curve control to between -0.5% and +0.5%, from +/-0.25%. It would appear that with current governor Kuroda set to leave in April that the BoJ wanted to start seeding the ground for a possible shift in the coming months, however as with everything related to monetary policy markets have already started to front run any possible change.. The 10-year JGB has consistently tested above the upper bound of the 0.5% in the past few days testing the central banks resolve in the process. The central bank has been consistent in maintaining that they aren't in any rush to make major adjustments to its yield curve control policy yet, however events appear to have overtaken them, as volatility has increased. The Bank of Japan's challenge today has been to try and reset market expectations, as well as try to avoid a further rapid appreciation in the yen, in the same way they wanted to manage the declines in their currency over the past few months. Suffice it to say they appear to have succeeded, pushing back on the recent moves that have pushed the yen higher. This morning the Bank of Japan kept monetary policy unchanged, which wasn't a surprise, but they also announced they would continue large scale bond buying and be more flexible about duration in order to keep policy settings loose. Yields on JGB's fell back sharply from the 0.5% upper bound in the wake of the announcement. Today's pushback or reset whatever you want to call it, shouldn't have been too much of a surprise given recent yen moves. Japanese central bank officials have always been particularly sensitive to sharp short term moves in either direction where the yen is concerned in the same way they were about recent yen weakness. The direction of the move is less of a concern rather than the speed of it, and in slowing the yen move lower the BoJ is merely resetting market expectations about future policy change, with the US dollar rising back above 130.00 UK inflation set to slip back in December After the peak of 11.1% in October, headline CPI fell back to 10.7% in November in a welcome sign that we could well be past the peak, when it comes to price rises.Recent falls in oil and gas prices are also likely to start to feed into the underlying numbers, while PPI inflation has also been falling in recent months, though given problems with the PPI calculations we haven't had clear visibility on that in the past couple of months, as the ONS continues to review how that is calculated. Today's December inflation numbers are expected to show that inflationary pressures continue to subside, but are only expected to fall modestly to 10.5%, with core prices also still high at 6.2%. We already know that food price inflation is trending in the mid-teens, which means that headline CPI is expected to remain above 10% for a while. It's also important to remember that RPI is even higher. With average wage growth trending at 6.4% and unemployment still low, the gap between wages and inflation is still quite wide, although it is narrowing from both directions. This probably means we can expect to see another 50bps rate hike from the Bank of England when it meets in just over 2 weeks' time, although any decision is unlikely to be unanimous, given the 3-way split last time. Headline CPI in the EU is also expected to be confirmed at 9.2% in December with core prices at 5.2%. EUR/USD – has struggled to overcome the 1.0870 area, prompting a fall to 1.0780. Could see a deeper fall towards 1.0720. The key resistance sits at 1.0950 which is a 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. GBP/USD – ran out of steam at 1.2300 yesterday, with the risk that the move above 1.2000 level is running out of steam, despite the decent rebound from the 1.1830/35 area. The next big resistance lies at the 1.2350 area. We need to hold above the 1.2000 area for further gains to unfold. EUR/GBP – the failure at the 3-month highs at 0.8895 this week has seen a drift back towards last week's low at 0.8770/80. Below 0.8770/80 retargets the 0.8720 area. USD/JPY – has recovered off 127.20 area this week, just shy of the 126.50 area which is the 50% retracement of the up move from 101.18 to the highs at 151.95. Has squeezed back above the 130.00 area and could extend back through 132.60 on towards 134.80 without undermining the downward momentum. FTSE100 is expected to open 10 points lower at 7,841 DAX is expected to open 32 points higher at 15,219 CAC40 is expected to open 11 points higher at 7,088 Email: marketcomment@cmcmarkets.comFollow CMC Markets on Twitter: @cmcmarketsFollow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

Today the US releases data on retail sales and PMI indices, which are supposed to show support for inflation fading. USD/JPY At the two-day meeting, the BOJ unanimously maintained its YCC targets, set at -0.1% for short-term interest rates and around 0% for 10-year yields. The Japanese yen weakened by more than 2 percent in the wake of the Bank of Japan's monetary policy announcement in January. If the losses continue, this will be the best one-day performance for the USD/JPY pair. To understand why the yen weakened so quickly here, one has to go back to what happened in December. Last month, the central bank shocked the markets by widening the yield curve band around 0% to plus/minus 50 basis points. It was from +/- 25 bp. The central bank also increased asset purchases to 9 trillion yen each month from 7.3 trillion previously. The markets saw this as a move by the central bank towards normalizing policy. Therefore, investors were strongly focused on further corrections today. When this did not happen, these bets were voided. The USD/JPY pair strengthened and traded above 131. After this recovery, the pair began to fall to a level around 129.10. AUD/USD The Australian and New Zealand dollars gained on Wednesday on the retreating yen. The Australian jumped 2.0% to 91.36 yen. For now, the BJ's pledge to keep yields low has provided relief to global bond markets and the Australian 10-year yield fell 8 basis points to 3.57%. The main event of the week in the country will be data from the Australian labor market, which will be released on Thursday. The Austrailan pair (AUD/USD) has broken through the 0.70 level and is trading at 0.7020 at the time of writing Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM GBP/USD The British pound received support this morning after mixed inflation data. UK headline inflation fell as expected to 10.5%. UK consumer price inflation fell to a three-month low of 10.5% in December but remains close to 40-year highs. The core CPI reading, which excludes food and energy from the calculations, underscores the tense labor market conditions seen in yesterday's UK employment data, while the recent fall in energy prices has contributed to the decline in the headline figures. The BoE has raised interest rates nine times since December 2021 to try to bring down inflation, with markets currently evaluating an 82% chance of a 50 bp rate hike at its next meeting, scheduled for February 2. GBP/USD holds its gains above 1.2300 again, undisturbed by mixed UK CPI data amid fresh US dollar weakness. Today's UK employment data becomes more important for GBP/USD traders given the recent comments from Bank of England (BoE) governor Andrew Bailey, as well as the worsening conditions of the UK labor strikes. EUR/USD The EUR is one of the weakest contenders against the US Dollar, with EUR/USD pulling back sharply after testing the 1.0870 level. The rest of this week is quite sunny on the economic calendar, which tends to support existing trends. The EUR/USD pair fell sharply mid-session in the US despite significant US dollar weakness. The euro fell after market talks suggesting that representatives of the European Central Bank (ECB) are considering slowing down the pace of monetary policy tightening. Rumors suggest that CEO Christine Lagarde and company will decide to raise interest rates by 50 basis points in February. The comments of the European Central Bank's chief economist Philip Lane also influenced the euro, who said that in order to bring interest rates back to their target levels and bring inflation back to the desired level, it will be necessary to stop the tightening of monetary policy by the central bank. At the World Economic Forum EU officials have announced their intention to accelerate the energy transition with a series of fiscal measures that support technological innovation in the green energy space. The support is expected to include a state aid mobilization as well as a sovereignty fund to stop companies relocating to the US. Source: finance.yahoo.com, investing.com, dailyfx.com

The Bank of Japan refuted market speculation about additional policy changes by stepping up efforts to defend its stimulus package to sustain the economy, which caused the Japanese yen to fall precipitously versus the US dollar. Bond yields were also impacted, and they dramatically decreased. Yield of 10-year bonds  The council of Governor Haruhiko Kuroda kept the target yield of 10-year bonds under its curve control program at around 0% and the negative interest rate at -0.1% today, according to the most recent statistics. The central bank also declared that it would keep up its massive bond purchases and, if necessary, increase them. Furthermore, the Central Bank increased the amount of loans available to commercial banks to encourage them to buy more government debt to justify its ultra-easy policy. This was another way the regulator showed its commitment to regulating the yield curve in the near future. Officials continue to doubt that inflation will stay over 2% The Bank of Japan's revised predictions also revealed that officials continue to doubt that inflation will stay over 2% on a sustained basis in the years to come, justifying additional stimulus even after Kuroda steps down in April. Experts claim that the statement's earlier-than-anticipated release revealed a consensus among the Bank of Japan Board of Directors. There were hopes that the Japanese regulator would budge in response to the political stance taken by the Federal Reserve System, the European Central Bank, and the Bank of England. However, this did not happen.  USD/JPY pair's technical picture The yield on benchmark 10-year bonds decreased by more than 10 basis points to below 0.4% after the rulings were released, as I mentioned above, while the yen dropped by more than 2% to 131.25 per dollar. Regarding the USD/JPY pair's technical picture, the nearest resistance level is 132.20. If this range is broken, the trading instrument, which is now at 136.50, will rise much higher, and the pressure on the dollar will resume. If the support level of 127 is tested again and broken, we can anticipate a further decline in the dollar to a level around 122.40, where the demand for the yen will diminish once more, causing a small upward move in the pair. Let me remind you that there is a growing expectation that the Bank of Japan will take more explicit action to normalize policy. Many economists began discussing rising interest rates this year after the regulator unexpectedly increased its target range of 10-year yields to 0.5% last month, a move that three-quarters of those surveyed saw as a move toward normalizing policy. However, based on the direction the Japanese regulator is currently heading, such modifications shouldn't be anticipated. Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM Kuroda's extensive program Kuroda's extensive program of ultra-soft policy has come under the heaviest criticism numerous times, but the regulator has persisted in purchasing bonds each time to affect their profitability and thereby boost the economy. At first, Kuroda argued that the action taken last month was intended to enhance market functionality. Although the yield limit was raised to 0.5% in December, this did not affect liquidity, and the Kuroda-noted yield curve distortion has subsequently gotten worse. Even before the governor's tenure ends, more steps will be taken, according to some experts.   Relevance up to 09:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332616

The Japanese yen has fallen sharply on Wednesday. In the European session, USD/JPY is trading at 129.38, up 0.96%. Earlier in the day, the yen fell as low as 131.58 but has pared some of today’s losses. BOJ maintains policy After a quiet start to the week,  the Japanese yen is showing strong volatility today. This follows the Bank of Japan’s policy meeting, where policy makers defied market expectations and made no changes to rate and yield curve control (YCC) settings. The markets had been on alert since the BoJ widened the band on 10-year JGBs in December, and there was speculation that the BoJ widen the band or even ditch its yield curve control altogether at today’s meeting. The central bank’s decision to stay on the sidelines sent the yen sliding as much as 2.6% before it recovered. The BoJ forecasts for GDP and inflation didn’t show much change and were overshadowed by the BOJ’s non-move. The GDP forecast was downgraded from 2.0% to 1.9% for FY22 and 1.9% to 1.7% for FY23. The inflation outlook didn’t change much either  – the FY22 forecast was raised from 2.9% to 3.0% and the FY23 remained unchanged at 1.6%. The weak Japanese economy means that risks to growth are tilted to the downside and the BoJ is unlikely to make any policy tweaks to its ultra-loose policy before the new BOJ Governor takes over in April. Japanese government bond yields have fallen sharply in response to the BOJ decision to keep YCC in place, retreating from the 0.50% cap and falling as low as 0.36%. The cap had been under attack in recent days, forcing the BOJ to spend trillions of yen to defend it. I would not be surprised to see yields move higher in the short term due to speculators again testing the BoJ resolve to defend the cap. Read next:Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM USD/JPY Technical USD/JPY has pushed above resistance at 1.2940 and 131.33. The next resistance line is 133.28 128.40 and 127.71 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Yesterday saw another broadly positive session for European markets, with the FTSE100 once again underperforming, after UK inflation data showed itself to be much stickier than was anticipated, putting upward pressure on the pound in the process.   US markets initially started the day on the front foot until a double punch of weak data saw yields slide sharply on both the short and long end, prompting concerns that US economic activity was being impacted by the lagging effects of multiple rate hikes.   This concern about the economic outlook, along with announcements from the likes of Amazon and Microsoft about job losses, saw US markets roll over after European markets had closed, closing sharply lower, as once again the S&P500 failed above the 4,000 level.   Yesterday's weakness came as a result of concerns about the health of the US consumer. After a strong performance throughout most of 2022, consumer spending appears to have run out of steam with November and December retail sales declining 1% and 1.1% respectively. US PPI for December also saw a lower-than-expected rise of 6.2%, a sharp drop from the 7.4% seen in November.   The Fed Beige Book added little to the picture when it came to how the US economy is doing, apart from an acknowledgement that price pressures are starting to slow, however St. Louis Fed President James Bullard added to the uncertainty by insisting that the Fed needed to get rates above 5% sooner rather than later. This view conflicts with the prevailing market narrative of a 25bps hike next month, as concerns rise that the Fed could well be hiking into a potential recession.   These economic concerns also translated into crude oil prices which having hit their highest levels since the beginning of December early on the day, promptly reversed course to close the day sharply lower.   One thing in the favour of the US economy in the face of disappointing economic reports is a resilient labour market, with today's weekly jobless claims expected to see a modest rise from 205k to 214k.   We also have housing starts and building permits data for December, with the recent cold weather not expected to offer much hope of a respite here.   Last night's weaker US close looks set to translate into a lower European open.   The US dollar had a mixed day slipping to a marginal 8 month low against the euro before recovering, while against the Japanese yen we saw a 400-point range, after the Bank of Japan pushed back on market expectations of further measures to tweak its monetary policy settings around yield curve control.   Governor Kuroda went on to say that a further widening of the YCC band wasn't needed yet, as he looked to finesse the central banks messaging around its next policy move. The BoJ's biggest problem is that yesterday's events only delay the inevitable, with national CPI for December expected to reach a 42 year high of 4% later today.   With the Fed closer to the end of its rate hiking cycle, and the Bank of Japan yet to start its tightening regime, the line of least resistance for USD/JPY is likely to be a move towards 120 and possibly lower in the coming weeks.   EUR/USD – made a marginal new high of 1.0887 yesterday, before sliding back again, as the market struggles for direction. Could see a deeper fall towards 1.0720. The key resistance sits at 1.0950 which is a 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110.   GBP/USD – ran out of steam just shy of the December peaks at 1.2440. Above 1.2450 could see a move towards 1.2600. We need to hold above the 1.2000 area for further gains to unfold or risk a return to 1.1830.   EUR/GBP – the failure at the 3-month highs at 0.8895 this week has seen a move below last week's low at 0.8770/80, with the risk we could see a move towards the 0.8720 area, and 50- and 100-day SMA. The next support below 0.8720 targets 0.8680.   USD/JPY – the failure to hold onto the gains above 130.00 yesterday suggests the prospect of further weakness and a move towards the 126.50 area which is the 50% retracement of the up move from 101.18 to the highs at 151.95. Below 126.50 targets the 120.60 area.   FTSE100 is expected to open 38 points lower at 7,792   DAX is expected to open 60 points lower at 15,121   CAC40 is expected to open 30 points lower at 7,081   Email: marketcomment@cmcmarkets.com   Follow CMC Markets on Twitter: @cmcmarkets   Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

Concerns about US growth due to recent shortages in US PPI and retail sales cast a shadow over the dollar. The Fed's hawkish speakers are being largely shunned by the markets at this point. USD/JPY The Japanese yen, long favored as a safe haven and funding currency, has become so embroiled in market speculation over central bank policy in recent weeks that Wednesday's status quo decision triggered the yen's biggest fall in nearly three years. In a bond market where the central bank battled bond bears to defend its yield cap, the BoJ bought up so many of the issued 10-year Japanese government bonds that market liquidity virtually dried up. Speculators focused on the yen instead. Until late last year, BJ's dovish stance in the face of aggressive rate hikes by the Federal Reserve and other major central banks meant the yen was cheap and weak, making it an ideal currency to borrow for investment. Today USD/JPY started the day at 128.55 but then dropped below 128. USD/JPY is now trading back at the level from the start of the day, above 128.50 AUD/USD The Australian dollar falls after the unemployment rate in December was 3.5% from 3.4%. The figures show that the labor market remains robust, even as the Reserve Bank of Australia raised the cash rate by 3% from its pandemic low. The bank has rolled back large rate hikes and the futures market has a 50-50 chance of a 25 basis point hike priced at the February 7 monetary policy meeting. Ahead of this meeting, the key CPI data for the fourth quarter will be released on Wednesday next week, January 25. The RBA said it expects growth to 8% later this year The AUD/USD pair extended an overnight sharp pullback from the 0.7060-0.7065 area, its highest level since Aug. 16, and remains under strong selling pressure for a second consecutive day on Thursday. The downward trajectory remains uninterrupted throughout the European session. The Australian pair is currently trading below $0.70 but above $0.6850. Read next: Elon Musk Is Facing Trial In Fraud Trial Over 2018 Tweets| FXMAG.COM GBP/USD GBP/USD consolidates losses below 1.2350 during Thursday's European session. GBP/USD pair is currently above 1.2330. On the UK front, inflationary pressures have eased, according to the December Consumer Price Index (CPI) report published on Wednesday. Headline inflation was lowered to 10.5% on an annualized basis and the core CPI, which excludes oil and food prices, remained stable at 6.3%. The magnitude of the drop in the inflation rate is not enough to convince market participants that inflation in the UK is falling in a promising way. Therefore, investors should prepare for the continuation of the extremely hawkish monetary policy of the Bank of England (BoE). The UK data schedule is empty on Thursday, however, and traders will have to content themselves with looking ahead until Friday, when consumer confidence figures for January and retail sales figures for December are released. Consumers are expected to be a little less optimistic than they were. EUR/USD European Central Bank (ECB) President Christine Lagarde's speech on Thursday will point investors to the likely monetary policy actions in February. Falling energy prices in the euro area have moderated inflation, but the current rate of inflation is still far from the median. Therefore, investors should prepare for a hawkish comment by Lagarde from the European Central Bank. European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Wednesday it was "too early to speculate what we will do in March". However, he believes that Lagarde's earlier forecast of 50 bp is still valid. EUR/USD holds gains above 1.0800 in European trading. The pair is supported by falling US Treasury yields. Source: investing.com, finance.yahoo.com

After the yen experienced increased volatility on Wednesday, the currency in question is moving sideways yesterday and this morning as well. At the same time, traders are still bullish on the pair, the nearest target is 129.80, which is the line of the price channel on the higher chart. In case the quote continues to rise, the upper line of the descending green price channel is waiting around the 130.67 mark. Leaving the channel will open the next target at 133.60. The Marlin oscillator supports the price growth by rising in its own ascending channel. Crossing the signal line of the oscillator above the zero line will strengthen the price growth. On the four-hour chart, the Marlin oscillator is rising in the positive area, but growth is hampered by resistance of the balance indicator line. The MACD line is currently above the price, above the resistance of 129.80 on the daily chart. Also, considering the downtrend, we can assume other market obstacles to the pair's growth. With time, however, we still expect a full-fledged correction from the price decline from October 21. Relevance up to 03:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332814

USD/JPY gains positive traction on Friday and draws support from a combination of factors. A further recovery in the US bond yields helps revive the USD demand and acts as a tailwind. A positive risk tone undermines the safe-haven JPY and provides an additional lift to the pair. The USD/JPY pair attracts some buyers on the last day of the week and steadily climbs back above the 129.00 mark during the Asian session. Spot prices, however, remain confined in a familiar range held since the beginning of this week, warranting caution for bullish traders before positioning for any further intraday positive move. The US Dollar draws some support from a further recovery in the US Treasury bond yields and turns out to be a key factor acting as a tailwind for the USD/JPY pair. In fact, the yield on the benchmark 10-year US government bond move away from its lowest level since mid-September touched on Thursday amid uncertainty over the Fed's rate-hike path. In fact, the markets have been pricing in a greater chance of a smaller 25 bps Fed rate hike move in February. That said, the upbeat US macro data released on Thursday, along with the recent hawkish rhetoric from several Fed officials, suggest that borrowing costs are likely to remain elevated for longer, which, in turn, favours the USD bulls. Apart from this, a generally positive tone around the equity markets undermines the safe-haven Japanese Yen and lends support to the USD/JPY pair. Investors turn optimism over a recovery in the world's second-largest economy after the People’s Bank of China (PBoC) kept its benchmark loan prime rate at historic lows for a fifth straight month on Friday. The upside for the USD/JPY pair, meanwhile, remains capped, at least for the time being, amid fresh speculation that high inflation may invite a more hawkish stance from the Bank of Japan (BoJ) later this year. It is worth recalling that the BoJ earlier this week decided to leave its monetary policy settings unchanged, defying expectations for more hawkish signals. Nevertheless, the fundamental backdrop supports prospects for some meaningful upside for the USD/JPY pair, though the lack of a strong follow-through buying warrants caution. Market participants now look to the US Existing Homes Sales data, which, along with speeches by influential FOMC members, will drive the USD and provide some impetus to the USD/JPY pair.

The dollar traded around seven-month lows on Friday as a plethora of data worries investors that an economic slowdown may be inevitable. Today's day in the economic calendar is quite calm, apart from the events from the economic forum in Davos and statements of the Fed (Waller, Harker). Next week, however, we'll get our first look at the US GDP figures, which are crucial to the outcome of the "soft landing" the Fed hoped for as it continued to tighten financial conditions to bring down inflation. Markets expected a smaller tightening from the Fed after US retail sales revealed their lowest level of activity in the last 12 months. USD/JPY The Japanese yen fell today despite the December CPI data. Further selling pressure around the Japanese yen lifts USD/JPY Pair to fresh daily highs. On the daily chart, USD/JPY is in an uptrend and is approaching 130.00. The 10-year Japanese government bond (JGB) yield fell below 0.40% today, well below the Bank of Japan's 0.50% ceiling that remained unchanged at its meeting earlier this week. GBP/USD The pound fell on Friday after weak retail sales data reminded investors about the gloomy outlook for the British economy. The cable pair started the day close to 1.24, but reports caused a weakening and a change of direction. The pair is currently trading below 1.2360. UK CPI data showed yesterday that there was an increase in inflation in services and an acceleration in food/beverage prices, which will be a cause for concern for decision makers at the Bank of England. The poor economic outlook in the UK fuels speculation that the BoE may be less hawkish on policy than previously expected. Retail volumes are down 1% since November, pointing to a challenging environment for consumers as the cost of living continues to be reduced. EUR/USD EUR/USD holds slight gains while trading above 1.0800 in European trading. The US dollar is trying to rebound alongside US Treasury yields, despite an improved risk profile. Looking ahead, EUR/USD traders should pay attention to ECB President Lagarde's speech and recent speeches from Fed policy makers. ECB's Lagarde reiterates that the central bank will continue to raise rates. The recent gains of the major currency pair can be linked to the broad weakness of the US dollar, as well as the optimism surrounding the old continent, namely the Eurozone. Today, the major currency pair EUR/USD traded mostly in the range of 1.0830-1.0847. Currently, the EUR/USD pair is below this range at 1.0820. Read next: $1 Million In Sanctions Against Former President Donald Trump, Netflix Co-Founder Reed Hastings Has Stepped Down As CEO| FXMAG.COM AUD/USD AUD/USD is down sharply for the second day in a row, and the risk of continued decline has increased with the pair below 0.6930. The sentiment-linked Australian dollar has underperformed its major counterparts over the past 24 hours. The Australian was weighed down by local data on Thursday, which showed Australian employment unexpectedly fell in December, spurring a bond rally as markets priced in a lower interest rate peak from the Reserve Bank of Australia. The focus is now on the quarterly inflation report next Wednesday. Economists expect consumer prices to increase by 7.5% in the fourth quarter of last year compared to last year. Source: investing.com, finance.yahoo.com, dailyfx.com

During the week we heard from a chorus of speakers at the Fed who raised the alarm about an interest rate hike and didn't wait for weaker and disinflationary data, the dollar could have been stronger. In the last trade, st. Louis Federal Reserve Chairman James Bullard spoke for the second time this week and said US interest rates must continue to rise to ensure inflationary pressures subside. USD/JPY The USD/JPY pair started the trading week at 128.07. On Monday, the pair was falling, so the pair recorded its weekly low on that day, below 128.00 at 127.2530. In the following days, the USD/JPY pair rose until it reached a weekly high of 131.45. USD/JPY did not stay above 130.00 and in the following days the pair fell. The pair closed the week at 129.5390. The Bank of Japan met this week remains unchanged. The governor of the Bank of Japan reiterated that the central bank will maintain its very loose monetary policy. The next meeting of the Bank of Japan is scheduled for March 9-10. GBP/USD It was a good week for the cable pair. The pound gained strength which helped the GBP/USD pair to rise. GBP/USD started the week at 1.2226. The weekly minimum at 1.2175 appeared at the beginning of the week on Monday and Tuesday. The cable pair peaked above 1.24 (1.2428), and the GBP/USD pair ended the week above this level (1.2401). UK retail sales figures revealed a monthly decline in both the report's "volume" and "value" metrics. After alcohol fueled the World Cup's economic recovery in November, British consumers decided to tighten their belts in December as the cost of living remained low. In the strike-hit month of December, consumers not only spent less but also bought fewer goods, which had negative readings on both accounts compared to November. Bank of England Governor Andrew Bailey had further comments on inflation and the market's view of where the final rate will be. Bailey reiterates earlier forecasts that inflation will fall significantly in 2023, but still well above the 2% target. Big Sterling impact events are few and far between next week and mostly include manufacturing PMI data. EUR/USD The main currency pair EUR/USD is holding steady in the week despite falls above 1.08. Also above this level it started and ended the trading week. The EUR/USD trading week started at 1.0828 and ended at 1.0858. The pair recorded a weekly low well below the 1.08 level at 1.0774, and the week's high came close to the 1.09 level at 1.0884. The next meeting of the European Central Bank is scheduled for February 2. ECB President Christine Lagarde said on Friday that the ECB will "keep the course" on raising rates as inflation remains too high. AUD/USD The Australian's pair started the week at .6979. Over the next few days, the AUD/USD pair traded above 0.6950 and rose until it reached a weekly high of 0.7059. It then declined until reaching a weekly low of 0.6875. At the end of the trading week, the Aussie Pair rebounded from the low to end the week at 0.6973. Source: investing.com, finance.yahoo.com

After two weeks of strong gains, European markets gave back some of this year's early momentum with a modest pullback last week, with some suggesting that we may well have seen the peaks in the short term, in a manner similar to what we saw last year. US markets  US markets had an altogether more mixed week with the Dow seeing its worst week since early December while the Nasdaq 100 finished the week higher.   While there may be some logic in the argument that we may have seen the peaks in US markets, given how they have performed in the last few months, there is less of an argument when you look at markets in Europe, which look set to open higher later this morning..   Valuations in Europe are lower to begin with, and on an income/dividend basis much more compelling, compared to the US, with the FTSE100 and DAX both trading on forward dividend yields of 3.77% and 3.36% respectively.   Nonetheless financial markets appear to have a rising conviction that central banks are on the cusp of a significant pivot on monetary policy sometime later this year, a view that appears to be getting additional traction now that a number of Fed policymakers appear comfortable with the idea of another step down in the central banks rate hiking cycle to 25bps next week.   This view continues to be reflected in the US bond market, where yields continued to make fresh multi week lows, with the US 2 year closing lower for the third week in a row, as has the 10-year yield.   The performance of the US dollar was no less nuanced, posting a fresh 8-month low, as various European Central Bank officials continued to make more hawkish noises. The pound also held up well last week, closing higher for the 4th week in succession against the US dollar.   As we look ahead to a new week most of the attention is set to remain on the latest set of earnings reports, as investors look to decide whether the current strong run of gains can continue, and how much further central banks are prepared to go to get a handle on inflation.   Last week markets appeared to take some comfort from the fact that companies were focusing much more on maintaining their margins, and cutting costs, as well as jobs, amidst uncertainty over the global economic outlook.   This comfort appears to be predicated on an assumption that any economic slowdown will prompt a pause first and foremost in the central bank's rate hike plans, followed by some rapid rate cuts. Of course this assumes that these aforementioned central banks will be happy to start cutting rates when inflation is still well above target.   This seems highly unlikely, and while markets appear to have become conditioned to this sort of mindset since the financial crisis took rates sharply lower, it is by no means the given markets appear to think that it is.   Unemployment is still low, not only in US but in the UK and Europe as well, and having heard last week from the likes of Fed governor Lael Brainard, who is normally considered dovish, that inflation in her view still remains way too high, it is difficult to envisage a scenario where rate cuts this year are likely at this point.   ECB President Christine Lagarde was also at it, saying that inflation is still way too high and markets are underestimating the ECB's resolve to drive prices back towards their 2% inflation target. While the ECB did step down to a 50bps hike in December, there were a number on the governing council who wanted another 75bps hike.   When the ECB met last month, Lagarde more or less pre-committed the ECB to at least another 3 50bps rate hikes at the next 3 meetings, in a move that saw the euro push higher, but thus far has failed to see it follow through.   This would suggest that markets are unconvinced the ECB will be able to follow through on such guidance given the risks it might pose to the borrowing costs of the more highly indebted members of the euro area.   As we look ahead to a new week, the main focus will once again be on the US economy and this week's Q4 GDP numbers, as well as the December core PCE deflator inflation numbers, which are due on Thursday and Friday.     EUR/USD – still finding the air quite thin anywhere near to the 1.0900 area and support around the 1.0770/80 area. Could see a deeper fall towards 1.0720. The key resistance sits at 1.0950 which is a 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110.   GBP/USD – ran out of steam just shy of the December peaks at 1.2440, last week, but closed near the highs of the week. Has managed to hold above the 1.2300 area for the last two days. Above 1.2450 could see a move towards 1.2600. We need to hold above the 1.2000 area for further gains to unfold or risk a return to 1.1830.   EUR/GBP – held above the 50- and 100-day SMA last week at the 0.8720 area, before squeezing back to the 0.8775/85 area. We need to see a move through 0.8800 to retarget the 3-month highs of earlier this month. The next support below 0.8720 targets 0.8680.   USD/JPY – last week's rebound from the 127.00 area has thus far struggled to maintain traction above the 130.20 area, although we did overshoot briefly to 131.60 after the BoJ decision. We need to see a move through the highs last week to open up 132.50. We currently have support at 128.30.     FTSE100 is expected to open 12 points higher at 7,782   DAX is expected to open 73 points higher at 15,106   CAC40 is expected to open 23 points higher at 7,019   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

The US dollar fell today on the possibility of less aggressiveness from the Fed. Poor trading conditions are likely to continue as many major hubs in Asia are closed for Lunar New Year celebrations. Two very important data will be published in the US this week: first look at US GDP in Q4 on Thursday followed by Core PCE on Friday. USD/JPY The Japanese yen fell towards 130 to the dollar, moving further back from multi-month highs as the Bank of Japan remains committed to its ultra-low interest rate policy despite rising inflation and increasing market pressure. Last week, the central bank countered speculation about another policy adjustment by keeping interest rates very low and leaving its yield control policy unchanged. Meanwhile, traders are eyeing the BOJ meeting in March for a potential move as well as April when a new BOJ governor will step in. The USD/JPY pair started the week below 129.50, but rose quickly and passed the 130.00 level. At the time of writing, USD/JPY is trading at 130.3640. EUR/USD The euro hit a nine-month peak against the dollar on Monday as comments on European interest rates signalling additional jumbo rate rises contrasted with market pricing for a less aggressive Federal Reserve. The euro is also being supported by an easing of recession fears amid a fall in natural gas prices. ECB Governing Council member Klaas Knot said on Sunday: "expect us to raise rates by 0.5% in February and March, and that we will not be done by then, and the next steps will be taken in May and June." His colleague Olli Rehn he noted that he saw grounds for significant interest rate hikes. The ECB's hawkish expectations coupled with increased bets on a slowdown in the pace of US Federal Reserve (Fed) tightening are helping to reduce the monetary policy divergence between the two central banks, which in turn favors the EUR/USD pair's rally. EUR/USD pair has lost its traction and pulled away from the multi-month it set above 1.0900 earlier in the day. Read next: British Pub Earnings Will Suffer Significantly| FXMAG.COM GBP/USD Economic affairs in the UK are somewhat calmer with attention being paid to the current round of industrial action hitting the UK and the perceived unfreezing of UK-EU relations. The British currency recently fell 0.32% to $1.2359 and lost more against the euro. The core CPI, which excludes energy, food, alcohol and tobacco and which some economists consider a better guide to inflation trends, remained unchanged at 6.3%. Market prices point to a 70% chance of a 50 basis point rate hike at the Bank of England's February meeting. Sterling pulled back from a seven-month high against the dollar on Monday, which hit during the Asian hours. GBP/USD turned and fell towards 1.2350 during the European trading hours on Monday. AUD/USD The RBA did not rule out another rate hike at its February meeting as mentioned in previous minutes and remains divided between no change and a 25 basis point increase, Wednesday's inflation printout could bring more clarity. On a positive note for the Australian dollar, commodity prices are projected to remain elevated throughout 2023, mainly based on China reopening and coal exports to European countries. AUD/USD is hovering around 0.6980-85, defending early week gains on a weak Monday morning in Europe. The pair of the Australian failed to stay above $0.70, but is trading close to this level, so a re-breakout cannot be ruled out. Source: investing.com, finance.yahoo.com

The Japanese yen has edged lower on Monday. In the European session, USD/JPY is trading at 130.15, up 0.45%. The yen slipped 1.3% against the dollar last week, falling as low as 131.57 before recovering. Inflation heads higher Core CPI jumped 4.0% y/y in December, its highest level since 1981. This matched the forecast and followed a 3.7% gain in November. The usual suspects were at play, as food and energy prices rose sharply. Energy prices climbed 15.2%, while food prices were up 7.4%, the fastest pace since 1977. Core CPI has exceeded the BoJ’s 2 percent inflation target for nine straight months, as the central bank’s argument that inflation is transitory has become increasingly hard to defend.  The BoJ is projecting that inflation will peak at 3% in March, but it’s unclear why inflation will start to fall, barring a complete turnaround in energy and food prices. With wage growth lagging behind inflation, the cost of living is squeezing consumers, who are likely to cut back on consumption which will hamper economic growth. We’ll get another look at inflation on Tuesday, with the release of the central bank’s preferred inflation gauge, BoJ Core CPI. The index rose steadily in 2022, from just 0.8% in January to 2.9% in November. The consensus for December is unchanged but a reading of 3.0% or higher will put pressure on the BoJ to tighten policy, which would be bullish for the yen. The BoJ surprised the markets last week when it maintained policy settings at its monthly meeting. The non-move may have been primarily aimed as an ambush on speculators who bought yen in anticipation of the BOJ tightening policy. Still, the markets are expecting a shift in the BoJ’s ultra-loose policy, although it could occur after the new governor takes over in April. What is clear is that the BoJ will continue to command the attention of traders. The BoJ’s next meeting is on March 8th.   USD/JPY Technical There is resistance at 130.67 and 131.69 129.46 and 128.41 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

On the daily chart, the price is close to the upper limit of the downtrend price channel of green color (130.70). The Marlin oscillator is in the positive territory, so the main scenario assumes that the price overcomes this resistance and an attempt to further growth to the upper line of the price channel of blue color in the area of its intersection with the MACD line, near the 133.60 mark. There is a small divergence on the four-hour chart. If the reversal develops, i.e. if it overcomes the support of the MACD line (129.40), then the signal line of the oscillator may return to negative territory. Further, falling to the lower line of the global price channel, to the area of 127.27 (daily) is likely.   Relevance up to 03:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333043

US markets started the week very much on the front foot yesterday, with the S&P500 closing above the 4,000 level and the Nasdaq 100 leading the way higher with its second successive 2% daily gain.   The outperformance in tech appears to point to a growing conviction on the part of investors that the Fed will soon have to look at cutting rates before the end of the year, although to look at bond markets yesterday, yields also moved higher, as money flowed out of treasury markets.   With a lot of tech companies starting to announce job cuts, as well as other measures to rein in costs, and inflationary pressures showing further signs of easing, it would appear that US investors are starting to think in terms of the next move higher, despite concerns over lower profits   Given the uncertain economic backdrop this comes across as a bit of a leap of faith, and its also notable that while US markets have started to gain momentum in the past few days, European markets have started to lose some of their early year momentum.   While US markets surged higher yesterday it is notable that today's European market open is likely to be a much more tepid affair, suggesting perhaps that investors in Europe don't share the same enthusiasm about the economic outlook, despite the reopening of the Chinese economy, which may help to provide a demand boost.   This increase in optimism is likely to be reflected in today's flash PMI numbers for January, which have already seen a pickup in economic activity in the past few months due to the sharp declines in energy prices from the peaks in August and September.   In Germany manufacturing PMI fell to 45.1 in October, but has recovered since then, albeit is still very much in contraction territory. Services have seen a similar pattern, dropping to two-year lows of 45, before showing small signs of a recovery. We expect to see a further improvement in today's January numbers to 48 for manufacturing and 49.5 in services.     In France, we've seen a similar pattern in manufacturing, although services have been more resilient due to the energy price subsidies provided by the French government to cushion French households from the worst effects of higher prices. France manufacturing is expected to improve to 49.5 from 49.2, and services to 49.8 from 49.5.   In the UK, manufacturing has struggled over the past 3 months and looks set to continue to do so, while services have been slightly more resilient. As we head into 2023 the challenges for business will be whether we see new investment, and a pick-up in economic activity, after the rising pessimism seen at the end of last year. Manufacturing is expected to remain subdued at 45.5, while services could slip back from 49.9 to 49.5.   Public sector borrowing in December is expected to remain high on the back of rising debt interest and energy price support with expectations of a small fall from November's £22bn to £18bn.   US manufacturing and services are expected to remain weak at 46 and 45 respectively.      EUR/USD – a marginal new high at 1.0927 yesterday, before slipping back again. The main resistance remains at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – ran out of steam just below the 1.2450 area yesterday slipping back towards the 1.2320 area. Has managed to hold above the 1.2300 area for the last three days. Above 1.2450 could see a move towards 1.2600. A move below 1.2290 could see a move towards 1.2170.   EUR/GBP – slid back from the 0.8815 area but while above the 50- and 100-day SMA which acted as support last week the bias remains for a return to the recent highs at 0.8890. The next support below 0.8720 targets 0.8680.   USD/JPY – has squeezed back above the 130.20 area, with a move through 131.60 and last week's high potentially targeting a return to the 132.50 area in the short to medium term. Support currently at the 128.20 area as well as the lows last week at 127.20.     FTSE100 is expected to open 20 points higher at 7,804   DAX is expected to open 47 points higher at 15,150   CAC40 is expected to open 23 points higher at 7,055   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

The dollar traded near a nine-month low against the euro and lost its recent gains against the yen on Tuesday as investors weighed the risk of a US recession with the Federal Reserve's monetary policy outlook. USD/JPY The Japanese yen gained slightly against the US dollar today after Jibun Bank's composite PMI was 50.8 in January from 49.7 previously. The manufacturing component was the same as last month's 48.9, but the services component was 52.4, above the previous reading of 51.1. These are diffusion ratios, and an index above 50 is seen as positive for the economy. The dollar fell to 127,215 yen last week, the weakest since May, before the Bank of Japan's policy review, as investors assumed the BoJ would begin to end its stimulus program. However, the BJ left the policy unchanged, giving the dollar some respite. Analysts believe BOJ change will come sooner rather than later as policy makers make tweaks to their yield curve control mechanism. USD/JPY drops towards 129.00 but rebounded and trades above 130.00 again. EUR/USD The eurozone showed resilience in late 2022 with plenty of positive data that so far seemed to carry over to 2023. The hawkish rhetoric of ECB policymakers continues to strengthen the euro while optimism about avoiding recession is growing. The euro, on the other hand, gained almost 0.8% last week, which was boosted by a wave of officials from the European Central Bank. ECB President Christine Lagarde also reiterated on Monday that the central bank will continue to raise interest rates rapidly to curb inflation, which is still more than five times higher than the 2% target rate. PMIs in the euro zone were higher than expected. Only Germany's Manufacturing PMI fell from 47.1 to 47.0. EUR/USD lost grip and fell towards 1.0850 after the release of mixed PMI data from Germany and the euro zone. Ahead of the US S&P Global PMI survey, the US dollar index has been stable above 102.00. The EUR/USD pair is trading close to 1.0870 at the time of writing. Source: investing.com GBP/USD The British pound was lower on Tuesday after data showed economic activity weakened further in January, underlining the risk that Britain could slip into a recession in 2023. After an impressive December services PMI report, markets were hoping for another encouraging reading in January given a slightly brighter outlook now that inflation seems to be headed in the right direction. This was not to be the case as the new year brought with it a sustained decline in private sector business activity in the UK. The flash UK PMI Composite was 47.8 (December: 49.0). lowest in 24 months. In contrast, the UK industrial production index was 46.6 (December: 44.4). The highest in 6 months. UK Services PMI Business Activity Index at 48.0 (December: 49.9). The Bank of England is still expected to raise its key interest rate for the tenth consecutive time on Feb. 2 after its next scheduled meeting. The cable pair also lost amid emerging reports. GBP/USD pair trades below 1.2400 again and is now at 1.2318 AUD/USD The Australian dollar was nearing a five-month high from last week at 0.7063 as the US dollar comes under increasing pressure. While the CPI is the main target of the RBA's mandate of targeting 2-3% over the business cycle, the Producer Price Index (PPI) may also play a role. The PPI will be released this Friday and if it accelerates in the fourth quarter, it could be a problem for CPI this quarter. Companies face higher costs. It's also worth noting that the Australian and New Zealand dollars hit multi-month highs on Tuesday as investors refocused on risky assets, easing recession fears and a less aggressive Federal Reserve. The pair of the Australian Dollar, despite not maintaining previous imports, remains above 0.70. The Aussie Pair is currently trading at 0.7023. Source: investing.com, fiance.yahoo.com, dailyfx.com

For a long time, the Bank of Japan has been at war with financial markets, but in January decided to conclude a truce with them. Keeping the overnight rate at -0.1% and the range of the targeted yield of 10-year bonds at +/-0.5%, the BoJ offered banks a new system of lending not at a fixed, but at a floating rate secured by securities. The volume of bids at the first auction amounted to £3.13 trillion, three times the amount offered. Commercial institutions will invest the money received, including in bonds, which will stabilize the situation both in the Japanese debt market and in the USDJPY pair. Everyone needs rest. After sharp movements that first led the yen to fall to a 30-year bottom against the U.S. dollar, and then to its strengthening by 17%, the Japanese currency requires rest. A truce is the best way to ensure it, but it was not without a change in the external background here, either. Rising U.S. Treasury bond yields have allowed the USDJPY bulls to raise their heads. The prevailing market optimism about China and Europe's resilience in the face of the energy crisis suggests that the United States will be able to avoid a recession. This reduces the demand for such a reliable asset as American debt obligations and contributes to the growth of interest rates on them. It's quite possible that institutional investors, who took their net positions on the yen into positive territory for the first time since June 2021, will have to moderate their ardor. At least in the short term. Dynamics of USDJPY and speculative positions on the yen As history shows, inflation can sharply slow down to 2% only in the event of a downturn in the U.S. economy. This was the case in the 1970s, when the Fed's aggressive monetary tightening under Paul Volcker pushed the U.S. into recession. This was the case during the global economic crisis of 2008. Now the situation looks different. The U.S. labor market remains strong as a bull, and the improvement in the economies of China and the eurozone raises global risk appetite and weakens financial conditions. Risks of a rebound in inflation are increasing, and the odds of a U.S. GDP contraction are shrinking. Not surprisingly, Treasury yields are rising, contributing to USDJPY pair consolidation. Read next:South African Petrochemical Company Sasol Is Moving Away From Fossil Fuels, Germany Again Refused To Send Tanks To Ukraine| FXMAG.COM Undoubtedly, the downward trend remains in force as, sooner or later, the Bank of Japan will have to give up control of the yield curve and raise rates. All the more so given the acceleration in consumer prices in Japan to 4%, the highest mark in 41 years, and accelerating wages. Nevertheless, any asset needs a break on a long hike, so USDJPY consolidation is just what the doctor ordered. Technically, there is a steady downward trend on the daily chart of the pair, but it is too early to speak about its recovery without quotes falling below the fair value of 128.5. The rebound from the 128–128.5 convergence area can be used for buying. Unsuccessful EMA tests near 131.8 and 133.3 can be used to sell the USDJPY.   Relevance up to 11:00 2023-01-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333107

European markets were somewhat of a mixed bag yesterday after the lates flash PMI numbers painted a patchy outlook for certain parts of the economy in the UK and Europe.   US markets also underwent a mixed finish with the Dow finishing higher and the Nasdaq 100 lower,  due to caution ahead of the release of key earnings announcements after the close last night, with the main focus on Microsoft's Q2 numbers being of particular interest. These saw the software giant record revenues of $52.7bn, which was slightly below expectations, with profits of $2.32c a share.   As expected, personal computing and gaming revenue was disappointing, falling short of forecasts at $14.24bn, however this was offset by strong cloud revenue of $27.1bn. Windows OEM revenue fell 39%, while Xbox content and services saw a decline of 12%. On guidance Microsoft was rather pessimistic suggesting that Azure growth would slow, and that new business was already becoming more difficult. Microsoft also said subscriptions were also likely to slow, and that revenues would remain flat in Q3.   Looking ahead to today's European session the pessimistic outlook to last night's earnings numbers looks set to see a slightly lower open.   With UK inflation seeing a step-down last week to 10.5%, it remains painfully high for a lot of people, and on the RPI measure is even higher. In December, the ONS took the decision to pull the release for PPI inflation due to problems with some of the calculations, with respect to diesel prices as well as the food prices calculation.  This is significant as PPI can act as a leading indicator as to what is coming down the line when it comes to inflationary, as well as disinflationary forces. Prior to the ONS pulling the numbers in December there had been evidence that factory gate prices had been falling sharply with the last recorded October numbers seeing a slowing in inflationary pressure from the peaks in the summer.   If we get a further sharp slowdown in the annual numbers, this ought to give confidence that the headline numbers will also see similar falls in the coming months. Annualised input numbers in October came in at 19.5%, down from 20.8%, while output prices for October came in at 17.2%. Monthly input price estimates for today's December numbers are for a decline of -0.8%.   With energy prices continuing to fall over the winter, we've started to see gradual improvements in economic activity across the euro area. This improvement has been reflected in the better-than-expected German manufacturing numbers yesterday and was also responsible for a better than forecast improvement in German IFO business sentiment in December to 88.3.   This trend is expected to continue in today's January numbers with another improvement to 90.3, with the current assessment also set to improve to 94.9, and expectations set to rise to 85.3, from 83.2.   It was back in October that the Bank of Canada set the cat amongst the pigeons when it raised rates by a less than expected 50bps to 3.75%, in a move that suggests that central banks were starting to wake up to the possibility that too aggressive rate rises could do more harm than good.   They then followed that with another 50bps rate rise in December, to 4.25%, as concern grew that raising rates too high could create problems in the housing market.   With today's decision coming a week before next week's Federal Reserve decision, a lot of people are looking at the Bank of Canada for a steer in terms of whether we could see a step down from the Fed. It is widely anticipated that the BoC will announce another step down to 25bps, after headline inflation fell back to 6.4% from 6.8% in December. Median core prices however have remained sticky, remaining at 5% in November and up at the highs of the year, which in turn may mean the Bank of Canada could decide to err towards 50bps.     EUR/USD – currently range trading between the highs this week at 1.0927, and wider resistance at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – continues to struggle below the 1.2450 area and slipped back to towards the 1.2250/60 area. Above 1.2450 could see a move towards 1.2600. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – having found support above the 50- and 100-day SMA last week the bias remains for a return to the recent highs at 0.8900. The next support below 0.8720 targets 0.8680.   USD/JPY – found resistance just above 131.00 yesterday, before slipping back. A move through 131.60 and last week's high potentially targets a return to the 132.50 area in the short to medium term. Support currently at the 128.20 area as well as the lows last week at 127.20.    FTSE100 is expected to open 5 points higher at 7,762   DAX is expected to open 25 points lower at 15,067   CAC40 is expected to open 10 points lower at 7,040   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

According to the former executive director in charge of monetary policy during the epidemic, the US dollar is aggressively losing ground against the Japanese yen. However, the Bank of Japan is likely to gradually end emergency measures to stabilize the yield curve once the new governor assumes office in April of this year. This is because the emergency measures will likely last for several months. Former director Eiji Maeda stated in an interview that "it is likely that the Bank of Japan will take steps within the first six months after the election of a new governor." Despite this, the regulator "is likely to continue to maintain a soft monetary policy to keep bond yields low" even if the YCC is finished and the negative interest rate resumes a positive trajectory. A chance that pricing pressure could develop  As Japan transitions away from an economy where inflation has been near zero for a considerable amount of time, according to Maeda, a former senior economist at the Bank of Japan, the country is on track to end persistent deflation. Additionally, it presents the Bank of Japan with a chance to stop using aggressive stimulus measures. "The economy is beginning to experience moderate inflation, which lessens the urgency for taking quick action. There is a chance that pricing pressure could develop in the vicinity of 1% to 1.5%," added Maeda. Haruhiko Kuroda Let me recollect that the Bank of Japan governor, Haruhiko Kuroda, spoke out against a vigorous market assault on the Bank of Japan's incentive scheme exactly one week ago. After the Central Bank's unexpected move to boost the target rate on 10-year notes to 0.5% in December last year, speculation about a potential policy change started to emerge. However, as the majority of experts point out until Kuroda steps down on April 8, more adjustments are unlikely. Read next: The Aussie Pair Is Gaining Strong Positive Traction Agian, USD/JPY Drop Below 130.00| FXMAG.COM Maeda Maeda added that a major factor in the December decision was the yen's excessive volatility. In addition to increased foreign currency rate volatility and a decline in market liquidity, YCC has "major side consequences," according to Maeda. He asserts that the bank won't abruptly end its easy policy. Instead, it's more likely that the phase-out will be followed by an increase in bond purchases and an adequate flow of cash to the financial markets. Options are quite likely, including a further 25 basis point widening of the yield range, which would mark the beginning of the end for YCC. During its subsequent policy normalization step, the Bank of Japan "may announce the phase-out of the YCC and pledge to maintain the bond yield ceiling at 0.75%," according to Maeda. USD/JPY Regarding the USD/JPY's technical picture, it is clear that the dollar is actively losing ground versus the yen. A breach of the support level of 126.35 might put more pressure on the trading instrument, which could result in a bigger sell-off between 124 and 121.30. Only after the US dollar has regained control over the resistance level at 131.60 will it be possible to discuss an upward correction and strengthening of the greenback. This could cause a stronger upward move in the area between 134.70 and 138.30, where large dollar sellers have returned to the market. EUR/USD Regarding the technical analysis of EUR/USD, there is still demand for the single currency, and there is a potential that monthly and annual highs will continue to be updated. To do this, the trading instrument must remain above 1.0860, which will cause it to move to the vicinity of 1.0930. You can easily get through this point to reach 1.0970 when an update to 1.1007 is imminent. Only the collapse of support at 1.0860 will put more pressure on the pair and drive EUR/USD to 1.0805, with the possibility of dropping to a minimum of 1.0770 if the trading instrument declines.   Relevance up to 08:00 2023-01-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333213

The dollar gained on Wednesday during limited trading. Traders broadly expect the Fed to raise interest rates by 25 basis points next Wednesday, down from the 50 bp hike in December. Earlier, investors will look at the US economic growth data for the fourth quarter, which will be released on Thursday. Moreover, a drop in global energy prices and a resulting slowdown in inflation in advanced economies has spurred speculation the Fed and other central banks might soon stop raising interest rates. USD/JPY Spot prices struggle to capitalize on the move and held steady at 130.00 through the early European session. USD/JPY is trading below this level. EUR/USD The chances of a bigger interest rate hike by the ECB are growing rapidly. As reported by Bloomberg, ECB policymaker Gediminas Simkus reiterated on Tuesday that the ECB should continue raising interest rates by 50 basis points in the face of mounting wage pressure. The euro gained thanks to optimism about the euro zone's economic prospects. As for the future of the euro, economists at CIBC Capital Markets said the improving macroeconomic situation and further policy tightening by the ECB herald the strength of the euro in 2023. During the Asian trading hours, the EUR/USD pair rose until it broke above the 1.0900 level. The momentum fails to sustain and the pair trades below that level at around 1.0870. Read next: The Department Of Justice's Lawsuit Against Google | FXMAG.COM AUD/USD The Aussie pair is gaining strong positive traction for the fourth day in a row and is recovering from 0.7100 for the first time since mid-August during the Asian session on Wednesday. The Australian dollar rose to a more than five-month high on Wednesday after higher-than-expected inflation data, bolstering the case for further interest rate hikes. Australian headline inflation (CPI) continues to pick up, as does the preferred trimmed CPI, on both a month-on-month and year-on-year basis. Australia is set to benefit from the Chinese reopening now that the Chinese government has stated that the nation has already reached a peak in infections and hospitalization rates. The reopening has resulted in increased purchases of Australia’s top export, iron ore, as prices have trended higher. The daily AUD/USD chart shows this pair in an uptrend. The pair managed to record gains over the course of three consecutive days. The AUD/USD pair performed well in the early stages of 2023, driven in large part by the continued downtrend of the dollar. Today, the pair gained above 0.7100, but failed to hold and is below this level again. GBP/USD Details of the UK Producer Price Index (PPI) for January may be of interest to GBP/USD investors ahead of Thursday's key US Q4 GDP and next week's Fed meeting. Sterling fell against the dollar and euro on Wednesday after data showed British manufacturers unexpectedly lowered prices in December, suggesting inflation could be easing ahead of next week's Bank of England policy meeting. The news that UK factories have lowered prices is likely to ease the burden on Bank of England policymakers who need to consider how far to raise interest rates in the fight to bring down inflation. The market expects the BoE to raise interest rates for the tenth time since late 2021 as it fights inflation. Markets are currently evaluating a 75% chance of a 50 point rate hike. The cable pair is still trading below 1.2400, close to the 1.2300 level. Source: finance.yahoo.com, investing.com

The USD/JPY pair has chosen to move exactly along the descending price channel, having turned from its upper limit. Such adherence to the line chart makes it possible to determine the price's movement - the point of intersection of the median line of the price channel with one of the embedded lines of the global hyperchannel (blue lines) - the 124.05 mark. In this case, the intermediate target is the nearest blue line of the hyperchannel at the 127.27 mark. The Marlin oscillator has moved into the red zone (downtrend). It will probably leave its own ascending trend channel and form some kind of downtrend. Probably also within the limits of a new downtrend channel (lilac). An alternative scenario is as follows: since the price crossed yesterday's high (130.58), and settled above it, the next target will be 133.60 - the point of intersection of the embedded price hyperchannel line with the MACD indicator line. On the four-hour chart, the price went under the MACD line, the Marlin oscillator continues to fall in negative territory. The downtrend prevails.   Relevance up to 03:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333279

The USD/JPY pair has been trading in its own "coordinate system", prioritizing fundamental factors. For example, the pair was actively rising at the start of the week, despite the decline in the U.S. dollar index. Traders of USD/JPY ignored the general weakening of the US currency and even updated the local high (131.14). We will discuss the reasons for such behavior below, but first of all we should pay attention to the most important fact: the bulls failed to settle above the resistance level of 131.00 (middle line of the indicator Bollinger Bands on the D1 chart). Bulls found it hard to climb above this level, which speaks about how unstable their position is. The scale is still in favor of the yen, even in that isolated "coordinate system", in which the pair has to trade. Yen at the helm What is the peculiarity of the pair's behavior? For so many years, the yen acted as a follower, while the greenback took the lead. The Bank of Japan's monetary policy with Governor Haruhiko Kuroda, who was appointed to his post in 2013, repeated the same mantra month after month - that the central bank is committed to accommodative policy and, if necessary, ready to further ease monetary policy parameters. Everybody got used to this rhetoric and did not react to it, at least in the context of the USD/JPY pair. Nearly all of the BOJ meetings were of a pass-through nature, so they had little effect on the price values. But everything changed in December, when the BOJ allowed long-term Japanese government bond (JGB) yields to move in a wider range at the end of the last meeting in 2022. This decision was made, firstly, quite unexpectedly, and secondly - ahead of Kuroda's resignation (he will leave his post in April). Therefore, the market interpreted the outcome of the December meeting very unambiguously, coming to the conclusion that the central bank had taken the first step towards the normalization of monetary policy. Since then, the yen has ceased to be a "slave" in the USD/JPY pair: the focus is no longer just on the Federal Reserve's monetary policy prospects, but also on the prospects of a pivot in the Japanese central bank's policy. The BOJ strikes back The BOJ obviously did not expect such a violent reaction from the market and such unambiguous, categorical conclusions. That is why Kuroda said back in late December that the central bank was not going to abandon its ultra-loose monetary policy in the near future. But the market ignored his rhetoric. Earlier this week, the bears had to deal with another blow: the BOJ published the minutes of its December meeting where several Governing Council members stressed that the "the Bank should carefully explain that it needs to continue with monetary easing, that its accommodative policy stance has not been changed,". The bears were then forced to retreat. Bulls took the initiative and hit a new local high on Tuesday, testing the 131.00 level of resistance. But they failed to hold on to their positions: the bears took the initiative as soon as the bullish momentum faded. At the moment, when this article was being written, the pair was already going down to the bottom of the 129th figure, almost 200 points away from the local high (in only 2 days!). The pair is going down not only because the dollar is "moping" (dollar index is moving to the base of the 101st figure again), but the yen is also strengthening its positions due to "its" own fundamental factors. Inflation, inflation, inflation First, inflation in Japan continues to show an uptrend, renewing multi-year records. Overall consumer price inflation accelerated to 4.0% in December. Excluding fresh food and energy, consumer prices climbed 3.0% annually, and the corporate goods price index was up 10.2% y/y. On Friday, January 27, Japan will publish another important inflation indicator, the January Tokyo Consumer Price Index. It is considered a leading indicator for price movements across the country, so certain conclusions can be drawn from the published figures. If it will be in favor of the yen again, the USD/JPY pair may return to the area of 127-128 figures, where it was traded in early January. Traders of the pair are now acting ahead of the consolidated forecasts. Thus, according to most experts, Tokyo's overall CPI will rise to 4.2%: the last time the figure was at that high was in November 1981. The other components of the report (excluding fresh food prices; excluding food and energy prices) should also show an uptrend. Conclusions Judging by the results of the last few days, we can conclude that the yen held its ground and did not let the bulls settle above the resistance level of 131.00. Undoubtedly, the greenback, which is getting weaker all over the market again, has also played its part. But we should also consider that the pair was rising this week while the USD index was falling. Therefore, the pair is bearish also due to the strengthening of the Japanese currency. Further price declines will largely depend on this week's key releases: if US GDP growth data for Q4 and the core PCE index come out in the red, while Tokyo CPI surprises with its greenback, the pressure on the pair will only intensify. The main bearish target is 127.30 (bottom line of the Bollinger Bands indicator on the D1 chart).   Relevance up to 01:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333277

Tokyo CPI expected to rise Inflation has been on the rise in Japan and the trend is expected to continue with the release of Tokyo CPI later today. The headline figure is expected to rise to 4.4% in December, up from 4.0% in November, while the core rate is forecast to climb to 4.2%, up from 4.0%. Earlier this week, BoJ Core CPI, the central bank’s preferred inflation gauge, rose to 3.1%, up from 2.9% prior and above the forecast of 2.9%. BoJ Core CPI has now accelerated for 11 straight months, challenging the BoJ’s stance that inflation is transitory. The BoJ is projecting that inflation will peak at 3% in March, but this forecast seems questionable, given that rising energy and food prices have been driving inflation higher and higher. With wage growth lagging behind inflation, the cost of living is squeezing consumers, who are likely to cut back on consumption which will hurt Japan’s fragile economy. Kanda sends warning to speculators The yen has been relatively quiet over the past two weeks, but Japan’s top “currency diplomat” sent out a warning today. Vice Finance Minister for International Affairs Kanda said that sharp, one-sided moves in the currency markets would not be tolerated. Kanada oversaw the currency intervention in October after the yen had fallen close to 152 to the dollar. The yen has since rebounded and is currently trading close to 130 to the dollar. Kanda’s message is aimed at speculators, but with inflation rising and the BoJ’s ultra-loose policy looking increasingly anachronistic, speculators are likely to continue betting that the BoJ will have to tighten policy and the yen will rise as a result. The IMF had a message of its own for the BoJ, suggesting that the central bank allow more flexibility in 10-year bond yields, which would mean a shift in BoJ policy. It’s a busy day on the economic calendar, with the US releasing GDP and durable goods. GDP is expected to slow to 2.6% in Q4, which would still point to solid growth. Durable Goods is forecast to rebound and gain 2.5% in December, following a soft reading of -2.1% in November. Traders can expect some volatility from the US dollar in the North American session, as the markets have jumped on any soft readings as a signal that the Fed will have to ease up on its aggressive rate policy, and this has sent the US dollar lower. Read next: GBP/USD Pair Is Struggling To Extend Previous Highs, EUR/USD Pair Continued Its Gains| FXMAG.COM USD/JPY Technical There is resistance at 130.36 and 131.69 129.46 and 128.40 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The Bank of Canada's interest rate decision appears to have put sentiment risk back as markets hope other central banks will follow suit. The BoC announced a pause in interest rate hikes to assess the impact of the recent hikes on the Canadian economy. Given that the BoC was the first major central bank to raise interest rates, market participants seem to see yesterday's announcement as a sign that the Federal Reserve and the ECB may follow suit. The dollar fell to an eight-month low against its peers on Thursday as a dismal US corporate earnings season fueled recession fears ahead of many central bank meetings next week. The Fed's policy-setting committee will begin a two-day meeting next week and markets have priced in a 25 basis point (bp) rate hike, down from the central bank's 50bp and 75bp hikes recorded last year. USD/JPY The Japanese yen gained against the US dollar on Wednesday, taking advantage of the US dollar's significant weakness. Despite minor recent changes by the Bank of Japan towards policy normalization, the BoJ remains the most dovish developed central bank. USD/JPY is down for the third day in a row and touches a new weekly low around 129.00 during the Asian session on Thursday. Fresh speculation that high inflation could lead the Bank of Japan (BoJ) to be more hawkish later this year continues to support the JPY. Bets were lifted by data released last week that showed Japan's nationwide core inflation hit 4% in December - its highest annual print since December 1981. Although USD/JPY fell in the Asian session, in the European session the pair gained and traded close to 129.90. AUD/USD Trade was a bit weak as Australia was closed for the holidays. The Australian dollar's rally against the US dollar is gaining momentum on the back of rising optimism over China's reopening and rising commodity prices. AUD/USD has been trading nicely in an uptrend since October. Earlier this month, the pair rose above a key resistance. The Australian pair is doing quite well and trading above 0.7100 during the European trading session. EUR/USD EUR/USD continued its gains from yesterday, holding above 1.09 after opening in Europe. The euro gained strength against the dollar yesterday as the domino effects of the Bank of Canada's interest rate decision swept through the market. ECB Governing Council member Gabriel Makhlouf said on Wednesday: "We must continue to raise interest rates at our meeting next week - taking a similar step to our December decisions," and added that the same should happen at the next March meeting. EUR/USD remains stable at around 1.0900 during the European session. Traders refrain from placing new EUR/USD bets ahead of critical US GDP releases. Read next: Musk Intends To Cut Costs In Tesla On Everything| FXMAG.COM GBP/USD The Bank of England is set to raise interest rates by half a point to 4.0% to tackle double-digit inflation, while markets are split on how much further rates will rise beyond that. Britain's inflation rate moved further away from October's 41-year high. Meanwhile, the risk of the UK slipping into recession continued to weigh on sentiment after the latest PMI survey showed the UK business economic activity fell. GBP/USD is struggling to extend previous highs at around 1.2400 during European trading hours. The US dollar is licking its wounds with weaker US Treasury yields amid dovish Fed betting. Source: investing.com, finance.yahoo.com, dailyfx.com

USD/JPY retreats towards intraday low, reverses the previous day’s corrective bounce. BoJ extends five-year loans against collateral to financial institutions to defend YCC as JGB rallied after Tokyo inflation. US Dollar traces firmer yields ahead of US Core PCE Price Index for December. USD/JPY prints mild losses around 130.00, after a failed attempt to recover, as the Bank of Japan (BoJ) marks a show of Yield Curve Control (YCC) during early Friday morning in Europe. In doing so, the Japanese central bank extends five-year loans against collateral to financial institutions, from February 01, 2023, to 2028. The BoJ activity could be linked to a jump in the 10-year Japanese government bond (JGB) yield to 0.50% after Tokyo Consumer Price Index (CPI) refreshed a 42-year high of 4.3% for January. It’s worth noting that this is the BoJ’s second attempt in January to defend the YCC policy, which in turn suggests further challenges for the ultra-loose monetary policy of the Japanese central bank. Contrary to the BoJ action, a run-up in the US 10-year Treasury bond yields and the market’s rush towards risk-safety, mainly after Thursday’s upbeat US growth numbers, challenges the USD/JPY bears. On the same line could be the cautious mood ahead of the Federal Reserve's (Fed) favorite inflation number, namely the US Core Personal Consumption Expenditures (PCE) – Price Index for December, expected to remain unchanged at 0.2% MoM. Against this backdrop, the US 10-year Treasury yields extend the previous day’s recovery to 3.52% while the S&P 500 Futures print mild losses. That said, Japan’s Nikkei 225 drops 0.12% on a day as it snaps a five-day uptrend. Looking forward, the US Core PCE data will be crucial for the USD/JPY pair as the Fed is ready to announce another 0.25% rate hike in the next week. It should be noted that the downbeat US inflation precursor could confirm the market’s dovish expectations from the US central bank and may exert more downside pressure on the Yen pair. Also read: US December PCE Inflation Preview: Is there room for further US Dollar weakness? Technical analysis Multiple failures to cross the 21-DMA surrounding 130.00 keeps pushing USD/JPY down even as a fortnight-old support line, close to 128.80 at the latest.

The Japanese yen is in positive territory on Friday. In the European session, USD/JPY is trading at 129.76, down 0.33%. Tokyo CPI hits 4.3% Inflation indicators in Japan continue to head northwards. Tokyo Core CPI rose to 4.3% y/y in January, up from 3.9% in December and ahead of the consensus of 4.2%. This is the highest level in 42 years, but what is more worrying for the Bank of Japan is that the indicator has exceeded the central bank’s target of 2% for the eighth straight month. The increase was broad-based, with food and fuel prices the main contributors to the increase. The Tokyo Core CPI reading follows other inflation indicators which have hit decades-high levels, adding pressure on the BoJ to exit its stimulus programme. The BoJ insists that inflation will peak at 3% in March. but this view seems over-optimistic, given the trend we’re seeing from inflation data. BOJ Governor Kuroda has said he will maintain the Bank’s ultra-loose policy until wages increase, which would indicate that inflation is driven by domestic demand rather than cost-push factors. Kuroda winds up his term in April, and the new Governor could decide to tighten policy, which would boost the yen. US GDP climbed 2.9% y/y in Q4, down from 3.2% in Q3 but still a respectable clip. Will the US be able to avoid a recession? The answer isn’t clear, as the economic data shows a mixed picture. The employment market remains robust and overall growth has been positive. Manufacturing and Services PMIs continue to show that these sectors are contracting and housing has been especially weak, as it lowered Q4 GDP by about 1.3%. Much will depend on the strength of consumer spending, which accounts for some 68% of GDP. Consumer spending rose 2.1% in Q4, down slightly from 2.3% in the third quarter. However, the December release is worrying, as consumer spending declined by 1.1%. If this trend continues, it seems likely that the US economy will tip into a recession. Read next: Another Sector Announced Layoffs, Hasbro Reduced Its Workforce, IBM And SAP Have Joined Technology Companies That Are Reducing Employment| FXMAG.COM USD/JPY Technical 129.46 is a weak support level. The next support line is 128.40 There is resistance at 130.89 and 131.69 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The dollar strengthened on Friday, moving away from multi-month lows against the euro and sterling as investors began to focus on the many important central bank meetings next week. The US Federal Reserve, European Central Bank and Bank of England are due to make interest rate decisions next week as they assess what policy adjustments may be needed to fight rampant inflation in a challenging global economic environment. In today's expected audience session, the core US PCE data for December will be released. This is the Fed's preferred measure of inflation and price pressures are expected to ease further. USD/JPY Annual inflation in Japan's largest city, Tokyo, continues to climb, with the base rate hitting 4.3% in January, the highest level in more than four decades. The USD/JPY pair in the European session is trading close to 130.00, at 129.96. Earlier, the couple managed to break the level of 130.00 but failed to maintain it. The couple is waiting for the publication of the US PCE report. EUR/USD The US dollar draws support from the mostly upbeat US macro data released on Thursday, which in turn is seen as a key factor putting some pressure on EUR/USD. Expectations for a more hawkish nature of the European Central Bank (ECB) should additionally contribute to limiting deeper losses. It is worth recalling that several ECB officials supported additional interest rate hikes in the coming months to fight stubbornly high inflation. Today European Central Bank (ECB) President Christine Lagarde is set to speach. The frequency of Lagarde's speeches in recent times has almost reduced her impact on the financial markets and the euro, which leads me to believe that today's forecasts may not have a significant impact. However, the market's attention will remain focused on key risks related to the central bank's events next week. The Fed will announce its policy decision at the end of its two-day meeting on Wednesday. This will be followed by the ECB monetary policy meeting on Thursday, which in turn will play a key role in determining the next stage of the EUR/USD directional move. The EUR/USD pair broke above 1.09 in the morning but fell again. Currently, the EUR/USD pair is trading in the range of 1.0875-1.0880. Read next: Ukraine Is Calling For More Sanctions Against Russia| FXMAG.COM GBP/USD Given the volatility of the market, the GBP/USD pair may witness a further sideways move ahead of the US PCE price index for December. British Finance Minister Jeremy Hunt's willingness to accelerate growth is unimpressive to GBP/USD buyers as the Chancellor defends his position on a tax hike despite heavy criticism from other Conservatives. Alternatively, the growing calls for Brexit solutions, at least from Irish diplomats, appear to be helping the GBP/USD pair bearish. Investors expect the British economy's slowdown to end the Bank of England (BoE) tightening cycle soon. The Cable pair (GBP/USD) broke above 1.24 at the beginning of the day, but similarly to the EUR/USD pair, it failed to hold and fell. Currently, the GBP/USD pair is trading in the range of 1.2360-1.2370. AUD/USD The Australian dollar, tied to sentiment, rose cautiously on Thursday after US GDP data boosted Wall Street's risk appetite. In the fourth quarter of 2022, the US economy grew by 2.9% q/q. This is more than the consensus of 2.6%. The Australian dollar traded at around $0.71, hovering near its highest in almost eight months as rising inflation in the country fueled bets on further central bank policy tightening. Annual inflation in Australia rose 7.8% in December, the largest increase since 1990 and above market forecasts of 7.5%. The Aussie pair is holding above 0.7100 despite having dropped earlier. Source: investing.com, finance.yahoo.com, dailyfx.com

European markets have struggled for direction this week, finishing the day modestly higher after two days of minor losses.   US markets on the other hand finished the day strongly higher, with the Nasdaq 100 leading the way higher on the belief, rightly or wrongly, that the US economy is heading for a soft landing whatever the Fed does next week.   Yesterday's Q4 GDP numbers showed the US economy expanded by 2.9%, while weekly jobless claims fell again to 186k from 192k the week before.   If there are any concerns that the US economy is on the brink of a recession it's certainly not being reflected in the economic data, which still looks solid, as we look towards next week's Federal Reserve rate meeting.   Today we get a look at the latest personal spending numbers for December, after seeing a sizeable slowdown in the November numbers to 0.1%, after a strong October showing of 0.9%.   If we get a similar weak reading today, and all the forecasts suggest we might, then that would suggest a rising caution amongst US consumers about how the economy is evolving as we head into 2023. We've already seen US banks setting aside hefty loan loss provisions in their most recent earnings numbers, a move which might suggest rising unease that consumers are becoming more frugal with their spending, or that a slowdown might result in credit losses.   Expectations are for December personal spending to decline by -0.1%, which seems somewhat conservative given that retail sales showed a decline of -1.1% a couple of weeks ago.   Whatever numbers we get today it seems almost certain that we will see the Federal Reserve raise rates by another 25bps next week, and judging by the rally in US stocks yesterday, the market has increasingly priced in that outcome instead of what might have been a 50bps move.   The big concern is what markets aren't pricing, and while the Bank of Canada earlier this week signalled a pause in its rate hiking cycle, that doesn't mean the Fed will follow a similar path, even though markets appear to be pricing exactly that sort of outcome.   While yesterday's GDP numbers increasingly appear to support the prospect of a soft landing, the labour market data also suggests that the Fed has the headroom to continue to be much more aggressive.   Today's PCE Core Deflator inflation data is expected to confirm another modest slowdown from 4.7% to 4.4%, and the lowest reading since October 2021. It would also support the case for a more modest 25bps next week, however as we get nearer to the end of the Fed's rate hiking cycle there is some divergence with respect to what might come next.   Judging by the bond market reaction which saw yields move higher there may be a realisation that rates are likely to remain higher for longer, while the strong close for stocks might suggest the market believes rate cuts might not be too far away.   That seems doubtful if last night's Tokyo CPI is any guide, after inflation there surged to a new 42 year high at 4.4%, well above expectations of 4%. This suggests that global inflation is likely to be stickier than markets are currently pricing.   We'll soon see who is right when Fed chair Powell speaks next week, but if markets think a pause is coming, they could be in for a bit of a wake-up call.   EUR/USD – another fairly tight range yesterday with resistance at 1.0927 and the highs this week, as well as wider resistance at the 1.0950 area which is 50% retracement of the move from the 2021 highs to last year's lows at 0.9536. A move through 1.0950 opens up a move towards 1.1110. Support remains back at the 1.0780 area.   GBP/USD – made another attempt to move towards the 1.2450 resistance area yesterday, before slipping back. We need to see a move through the 1.2450 area to target further gains towards 1.2600. A move below 1.2250 could see a move towards 1.2170.    EUR/GBP – the failure to make progress through the 0.8850 area has seen the euro slip back. Also have resistance at the previous highs at 0.8900. Still have support above the 50- and 100-day SMA which we saw last week at the 0.8720/30 area. Below 0.8720 targets 0.8680.   USD/JPY – needs to break through the 131.00 area to target a move back towards 132.60. While below the risk is for further declines towards the lows at 127.20. We have interim support at the 128.20 area initially.   FTSE100 is expected to open 13 points higher at 7,774   DAX is expected to open 44 points higher at 15,176   CAC40 is expected to open 3 points higher at 7,099   Email: marketcomment@cmcmarkets.com   Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

The US dollar was flat in trading this week. Next week's economic calendar is filled with high-impact events such as the Fed on Wednesday or the BoE and ECB on Thursday. And if the major central banks aren't enough, there will be an NFP report on Friday, and given the stance taken by the Fed on Wednesday, this jobs report could be even more important than usual as the FOMC monitors the data for signs of a slowdown from massive rate hikes from last year. USD/JPY USD/JPY started the trading week at 129.2700. Then it increased and exceeded the level of 130.00. On Tuesday, USD/JPY crossed the 131.00 level and recorded the highest trading level of the week at 131.0650. The level above 131.00 was not maintained and the pair fell below 130.00 again. Following this decline, USD/JPY hit a week-high trading low close to 129.00, 129.0400 to be exact. The pair then increased and broke above 130.00 again, but USD/JPY failed to hold above that level and ended the week at 129.8000. GBP/USD The Cable pair (GBP/USD) started the week trading quite high at 1.2399 and rose to a week high of 1.2446. The GBP/USD pair then declined and hit a trading low of 1.2274 on Tuesday. After that, the GBP/USD pair rose and traded above 1.2350. The cable pair ended the week just below 1.2400 at 1.2395. The British pound is gearing up for the week ahead which includes the Bank of England (BoE) and Federal Reserve interest rate decisions respectively. The BoE suggested another hike of 50 basis points, which is confirmed by prices in the money market. At the last meeting the majority voted for 50 bp, but taking into account new economic data, votes may be divided between 50 bp and 25 bp. The BoE is likely to remain unchanged - this would likely cause a bearish reaction on the pound. EUR/USD The major pair (EUR/USD) is holding above 1.08 and this week's trade was extremely favorable for the pair. The EUR/USD pair started the week trading at 1.0874. The EUR/USD pair then rose. Weekly trading was mostly above the 1.0860 level. EUR/USD peaked above 1.09 at 1.0930. The week's trading low for the pair was below 1.0850, while the EUR/USD record low was at 1.0841. EUR/USD ended the week at 1.0874. The market's attention will remain focused on the key risks related to the central bank's events. The Fed will announce its policy decision at the end of its two-day meeting on Wednesday. This will be followed by the ECB monetary policy meeting on Thursday, which in turn will play a key role in determining the next stage of the EUR/USD directional move. AUD/USD The Australian pair (AUD/USD) performed best on Wednesday in the major currency pairs. AUD/USD started the week trading at 0.6971. Then the Aussie pair rose and passed the 0.70 level, maintaining this level in the following trading days. On the first day of trading, AUD/USD traded below 0.70 and thus recorded the lowest trading level of the week at 0.6965. The highest trading level of the Australian pair was above 0.7100, at the level of 0.7138. The Aussie Pair finished the week just above 0.7100. Australia’s annual inflation jumped 7.8% in the December quarter, the biggest increase since 1990 and above market forecasts of 7.5%. The strong reading was more than twice the pace of wage growth and cemented expectations that the Reserve Bank of Australia will hike interest rates by 25 basis points in February. Source: investing.com, finance.yahoo.com

The yen has not chosen a particular direction over the past three days, but it continues to move sideways. However, it was followed by the price moving out of the descending green price channel, and now this channel is canceled. The price will be guided by the blue embedded lines of the global hyperchannel again. The nearest resistance is the MACD line near 132.95, the nearest support is the price channel line near 127.27. The main movement will be on Wednesday, when the Federal Reserve will announce its monetary policy decision. Right now the pair's growth is supported by the Marlin oscillator, whose signal line is testing the resistance of the upper limit of the descending lilac channel. Slightly lower you can find the lower limit of the ascending channel of azure color, it tends to keep the trend in a sideways direction. On the four-hour chart, sideways movement is evident, even the MACD line is moving horizontally. The Marlin oscillator is also balancing on a neutral zero line. We're wait for the Fed meeting on Wednesday.   Relevance up to 03:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333542

The dollar weakened on Monday to near an eight-month low ahead of a series of central bank meetings this week. The US Federal Reserve is likely to continue to ease the pace of monetary policy tightening at its upcoming meetings and plans to raise interest rates by 25 basis points at its next two policy meetings. USD/JPY USD/JPY pair struggled to hold significant gains above the psychological 130.00 level. The strength of the yen was limited by dovish comments from the BoJ president. BoJ Governor Kuroda continues to maintain his lenient stance on monetary policy. This comes as investors grow optimistic that rising inflation will result in a hawkish move away from the BoJ. Any further hawkish change from the BoJ seems unlikely with Governor Kuroda at the helm and could happen when the governor steps down in April. Driven by the risk associated with key central bank events, investors seem reluctant to bet on an aggressive bear market around the USD/JPY pair. In addition, comments from BoJ chairman Kuroda Haruhiko that the central bank must continue its easing policy and keep the inflation target at 2% limit the gains for the JPY. USD/JPY Pair started the week at 129.8040 and then increased. Currently, the pair is holding above 130.00. EUR/USD Higher Spanish inflation data supported the euro. The euro surged above $1.09 in late January, hovering around its highest level since April last year as investors awaited multiple central bank meetings this week as they digested stronger than expected Spanish inflation figures. The European Central Bank is due to raise interest rates by 50 basis points on Thursday, bringing borrowing costs to their highest level since 2008, while investors will also be on the lookout for signs of slowing the pace of monetary policy tightening at its March meeting. Read next: Glovo Planned To Lay Off 250 Workers Worldwide, The Middle East Is Already Suffering From A Water Shortage| FXMAG.COM EUR/USD pair gained traction and climbed above 1.0900 during the European session, but failed to hold and fell to 1.0893. GBP/USD The cable price (GBP/USD) was similar to the EUR/USD rate, i.e. it rose above 1.24 in the European session, but it did not hold and fell to 1.2384. The slight selling pressure around the US dollar ahead of key central bank policy announcements this week appears to be helping the pair push higher. GBP/USD traders can expect interest rate decisions from both sides of the pair this week, with the US Federal Reserve and Bank of England expected to make February moves on Wednesday and Thursday respectively. The Bank of England is to raise its base rates by half a percentage point. That would take them to 4%, the highest level since the 2008 financial crisis, with further increases expected. However, there have been some objections to the interest rate setting by the Monetary Policy Committee and it seems that a smaller hike is still on the table. AUD/USD AUD/USD prices have fallen to a three-day low of around 0.7075 in the last hour, although any significant drop still seems elusive. The Aussie pair has lost its momentum above 0.7100 but is not falling significantly and is trading at 0.7076. The Australian remains supported by expectations of further policy tightening from the Reserve Bank of Australia amid soaring inflation and China's swift reopening after Covid restrictions have boosted the global economic outlook. Australia's annual inflation rose 7.8% in December, the RBA has already raised the cash rate by a total of 300 basis points at eight consecutive meetings in 2022, bringing borrowing costs to a 10-year high of 3.1%. Source: investing.com, finance.yahoo.com, dailyfx.com

USD/JPY picks up bids to pare intraday losses, up for the third week in a row. Yields remain pressured, stock futures grind higher amid growth optimism, Covid-linked news. BoJ Chief Contestant warn of government meddling to defend JPY. Second-tier US data may entertain traders but FOMC is the key. USD/JPY trims daily loss around 130.30 during early Tuesday morning in Europe as mixed sentiment in the market joins a pause in the US Treasury bond yields. Adding to the Yen pair traders’ confusion are the fresh fears of government meddling to defend the Japanese currency. While firmer Japan data recently fuelled fears of the Bank of Japan’s (BOJ) exit from ultra-easy monetary policy, backed by a suggestion from the key policymakers, fears of government’s defense of Japanese Yen (JPY) probe the pair traders. “Hirohide Yamaguchi, among the top candidates to become the next Bank of Japan (BOJ) governor, warned about the danger of signing a joint policy document with the government when he was deputy governor in 2012, minutes of that meeting showed on Tuesday,” per Reuters. Elsewhere, the International Monetary Fund (IMF) recently raised its global growth estimates while also saying that the emerging markets' growth slowdown bottomed out in 2022. The global lender also stated that estimates come with the backdrop of a slight increase in the 2023 global growth outlook helped by "surprisingly resilient" demand in the United States and Europe, an easing of energy costs and the reopening of China's economy after Beijing abandoned its strict COVID-19 restrictions. It’s worth mentioning that the IMF’s fears over inflation seem to tame the optimism afterward. On the same line, receding fears of the COVID-19, after the US White House statement suggesting removal of virus-led activity restrictions, also propel the risk barometer USD/JPY pair. However, stronger Japan data underpin the hawkish bias from the BoJ and weigh on the quote. Against this backdrop, the US 10-year Treasury yields struggle to extend a three-day uptrend near 3.54% while the US Dollar Index (DXY) retreats to 102.20 at the latest. Further, the S&P 500 Futures remain mildly offered and so do stocks in the Asia-Pacific region. Looking forward, the US fourth-quarter (Q4) Employment Cost Index (ECI) and the Conference Board’s Consumer Confidence gauge for January will be eyed for immediate directions. As per the market consensus, the US Consumer sentiment gauge may improve but a likely softer print of the US ECI, to 1.1% from 1.2%, could strengthen the dovish bias surrounding Fed and can recall the USD/JPY bears. Technical analysis A daily closing beyond the 21-DMA hurdle, currently around 130.40, becomes necessary to keep USD/JPY buyers on the table.

The US dollar was on an upward trend against its major trading partners early Tuesday ahead of a busy schedule of data releases for markets. The Fed is coming soon. The US central bank is expected to raise interest rates again to fight inflation. However, fears seem to be growing that the price of victory here may be a recession. USD/JPY The Japanese yen (JPY) continues to be supported by fresh speculation that high inflation could lead the Bank of Japan to adopt a more hawkish stance later this year. Also, the overall weaker tone around stock markets further reinforces the safe haven for the JPY. This, along with the underlying bearish sentiment around the US dollar, puts some downward pressure on USD/JPY. The pair lost in the earlier trading hours but is trading above 130.10 again. EUR/USD The euro fell to USD 1.08 in the last session of January, but remains close to nine-month highs. Investors await the ECB's monetary policy decision on Thursday, with the central bank expected to raise interest rates by 50 basis points, bringing borrowing costs to their highest level since 2008. At the same time, data indicating an unexpected growth in the euro area in Q4 2022 by 0.1%, beating market forecasts of a decrease of 0.1%, and fresh CPI data for France and Spain, showing an increase in inflation in January, gave hope that The ECB will soon end its tightening cycle. On the negative side, retail sales in Germany fell by 5.3%MoM in December, much worse than expected. The EUR/USD pair has been falling since the morning, even significantly in the European session, but remains above 1.08 and trades at 1.0850. Read next: The Government Pension Fund Global Suffers Losses| FXMAG.COM GBP/USD The cable continued its decline in the early hours of the Asian session, falling below the 1.2350 level. GBP/USD saw a slight rebound to trade just above the 1.2350 level heading into the European open where the dollar bull returned pushing GBP/USD towards the 1.23000 handle. The GBP/USD pair remains under bearish pressure and is currently trading at 1.2321. The rally on the GBP/USD pair appears to have lost momentum, however, given the key risk events, the move could be due to market participants repositioning ahead of the storm. With the focus on central banks, there is still a real possibility of a policy divergence between the FED and the BoE, which should benefit the cable in some way. The Fed is expected to raise interest rates by 25 basis points while the Bank of England by 50 basis points as it fights persistent inflation. ING strategists said they expected BoE's decision to have a broadly neutral impact on the pound against the dollar. AUD/USD AUD/USD remains under strong selling pressure for the second day in a row on Tuesday and drops to more than a week low ahead of the North American session. The Australian dollar fell towards $0.70, retreating further from recent highs after data showed the country's retail sales fell much more than expected in December as heightened inflationary pressures and higher interest rates dampened consumer spending. Still, Australians are supported by expectations that the Reserve Bank of Australia will continue to fight inflation, expectations for a 25 basis point rate hike in February and China's swift reopening after Covid restrictions have boosted the global economic outlook. Source: investing.com, finance.yahoo.com, dailyfx.com

The Japanese yen is waiting for today's Federal Reserve meeting with more patience than other currencies. On the daily chart, the price is moving strictly sideways along one of the price channel lines for the sixth day. The nearest resistance is the MACD line, the nearest support is 127.27, which is the bottom line of the price channel. The signal line of the Marlin oscillator is consolidating under the upper line of its own descending channel. This consolidation increases the probability of a breakthrough of this channel, to the upper limit of the rising channel of turquoise color. Accordingly, the main scenario is that the price will increase with an attack on the MACD line. Crossing the line will open the second target of 133.77. On the four-hour chart, the price develops above the MACD indicator line. The Marlin oscillator is moving sideways almost along the zero neutral line. Waiting for the Fed's monetary policy decision and the Japanese currency's reaction to it. Relevance up to 03:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333820

As investors price the Fed nearing the end of its rate hike cycle, the dollar index is far from its 20-year high of 114.78. Investors said Fed Chairman Jerome Powell's words would be watched closely. Aside from the main event of the Fed meeting, investors will also focus on the ISM manufacturing and job vacancies data due for release on Wednesday for further guidance on the state of the US economy and labor market. Moreover, the ECB and the Bank of England are expected to raise interest rates by 50 basis points (bps) on Thursday. USD/JPY USD/JPY has struggled to gain any significant traction and has fluctuated between small gains and small losses throughout the early part of Wednesday's European session. Spot prices remain below mid 130.00 as investors appear reluctant and eagerly await outcome of two-day FOMC meeting. USD/JPY pair trades below 130.00, at 129.7970. Driven by the risk associated with key central bank events, investors seem reluctant to bet on an aggressive bear market around the USD/JPY pair. In addition, comments from BoJ chairman Kuroda Haruhiko that the central bank must continue its easing policy and keep the inflation target at 2% limit the gains for the JPY. EUR/USD On Tuesday, flash readings of gross domestic product (GDP) in the euro zone in the fourth quarter (Q4) increased by 0.1% q/q against 0.0% expected and 0.3% earlier. The year-over-year printouts also showed a rosy picture for the block as it surged above the 1.8% market consensus to 1.9%, down from 2.3% previously. However, retail sales in Germany fell by 5.3%MoM in December, much worse than expected. According to data from the European Union's statistical office, Eurostat, headline inflation in the euro area fell sharply in January, while the core index remained unchanged from the previous month. Investors said that data on inflation in the euro zone are unlikely to influence Thursday's monetary decision of the European Central Bank (ECB). On Thursday, the bloc's central bank will raise interest rates by 50 bps as traders look to see if officials signal they are likely to maintain a similar pace of hikes at the March meeting, or suggest a slowdown in policy tightening. EUR/USD was little changed after the release, with the pair finding and now stuck below 1.0900. Source: investing.com Read next: India's Adani Group May Have Passed A Key Test, Positive EU CPI Report| FXMAG.COM GBP/USD Fed policy makers emphasized the need to keep interest rates at a higher level for a longer period of time in order to lower inflation. This, in turn, suggests that the Fed will continue to sound hawkish, which in turn provides some support for the US dollar and acts as wind in the sails for the GBP/USD pair. As such, investors will look to the accompanying monetary policy statement and remarks by Fed Chairman Jerome Powell at the post-meeting press conference for clues on the path ahead of interest rate hikes. This will play a key role in influencing USD price dynamics and provide a significant boost to the GBP/USD pair. Then focus will shift to Thursday's Bank of England (BoE) meeting. The cable pair was trading close to 1.2300 during the morning trading hours. It then rose above 1.2330 before falling back and trading at 1.2325. AUD/USD The Aussie pair was rising today and traded above 0.7070 in the European session. The next upward move is likely to remain limited ahead of the key US central bank risk. Overall, the Australian dollar remains generally up. Source: finance.yahoo.com, investing.com

USD/JPY prints three-day losing streak despite recent bounce off weekly low. BoJ’s Wakatabe appears determined to tame inflation, praises YCC move. US 10-year Treasury bond yields dribble around two-week low. Second-tier US data, other central bank announcements can please Yen bears before Friday’s US NFP USD/JPY pares intraday losses around 128.60 during the three-day downtrend as the market slips into consolidation mode ahead of the second round of central bank dossier amid early Thursday. The Yen pair dropped to its lowest levels in two weeks earlier in the day while extending the Federal Reserve (Fed) induced losses amid downbeat Treasury bond yields. That said, the US 10-year Treasury yields slumped the most in two weeks while testing the lowest levels in a fortnight the previous day after the US Federal Reserve (Fed) announced its dovish hike of 0.25%. The US central bank unveiled receding fears of inflation and Chairman Jerome Powell showed readiness for cutting the rates if inflation drops faster, which in turn drowned the US Dollar and yields. The same propelled the risk-on mood and favored Wall Street bulls. On the other hand, hawkish comments from Bank of Japan (BoJ) officials also favored the GBP/JPY bears. That said, Bank of Japan's Deputy Governor Masazumi Wakatabe has said the BoJ will continue to conduct monetary policy to achieve 2% inflation accompanied by wage growth. The Japanese central bank has recently conducted multiple bond market moves to defend the Yields Curve Control (YCC) policy. BoJ’s Wakatabe was recently heard praising the YCC move of the BoJ. It should be noted, however, that the comments from BoJ’s Wakatabe also ruled out the market’s fears of any immediate move, which in turn allowed USD/JPY to lick the Fed-inflicted wounds. Amid these plays, the S&P 500 Futures print mild gains while Japan’s Nikkei 225 follows the suit as traders await another round of central bank announcements, this time from the European Central Bank (ECB) and the Bank of England (BoE). In addition to the central bank news, US Factory Orders for December, expected 2.3% versus -1.8% prior, and the US Preliminary Nonfarm Productivity for the fourth quarter (Q4), expected 2.4% versus 0.8% prior. Above all, Friday’s US jobs report for January will be crucial to follow for clear directions. Technical analysis The successful downside break of the 13-day-old ascending trend line, around 129.40 by the press time, directs USD/JPY bears towards the previous monthly low of near 127.20.

Jerome Powell had a lot to say during the press conference after yesterday's FOMC decision to raise the Federal Funds rate by 25 basis points. He stressed that the inflation risk persisted despite favorable disinflation observed in most sectors. The European Central Bank (ECB) and Bank of England (BoE) will meet later today and both banks are expected to raise their interest rates by 50bps. USD/JPY The dollar slide against the Japanese yen, dropping to as low as 128.07, its lowest in two weeks. Prior to the FOMC event, USD/JPY rose, approaching the falling resistance of the trendline, and then fell. USD/JPY rebounded after finding an intermediate cushion around 128.20 in the Asian session. Considering the risk sentiment in the market, the downtrend is intact. Now the USD/JPY pair is holding above 128.35. As the Bank of Japan keeps the 10-year Treasury yield at 0.5%, the falling US equivalent continues to narrow the interest rate differential, indicating continued declines in the USD/JPY pair. EUR/USD EUR/USD hit a 10-month high at 1.1033 today. EUR/USD pulled back slightly after reaching its highest level since early April at 1.1033 during the Asian trading hours on Thursday. The pair's technical outlook points to overbought conditions in the short term, but market participants may bet on further strengthening of the euro if the European Central Bank (ECB) repeats its hawkish message. The ECB will raise the main interest rate by 50 bp. The decision itself is largely priced in and is unlikely to receive a significant backlash. Some ECB policymakers have advocated a further 50 basis point hike at the next meeting, and the euro could gain strength if a policy statement or ECB President Christine Lagarde confirms such an action. Additionally, EUR/USD could maintain its bullish momentum if the ECB refrains from being optimistic about the inflation outlook. The EUR/USD pair fell below the 1.1000 level but slightly and is trading at 1.0991. GBP/USD GBP/USD drops towards 1.2300 during European trading hours. Sterling remains under slight downward pressure as investors wait for the BOE decision on interest rates. Despite strong selling pressure around the US dollar late Wednesday, GBP/USD's gains remain contained, especially against EUR/USD. On Thursday, the BOE is expected to raise its key rate by 50bps to 4% from 3.5%, but the GBP/USD pair could extend the decline nonetheless. At this point, a BOE rate hike of 25 basis points would be a dovish surprise and weigh heavily on sterling. Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend ,The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM AUD/USD The Australian dollar appreciated past $0.71 to its strongest levels in nearly eight months, as the US Federal Reserve reduced the size of its rate hike and said it has made progress in the fight against inflation. The aussie also remains supported by expectations that the Reserve Bank of Australia will press on with its fight against inflation and by China’s rapid reopening from Covid curbs. From a technical point of view, the daily chart of AUD/USD suggests that the pair will continue to rise. Source: investing.com, finance.yahoo.com

The Japanese yen got a little stronger after the meetings of the three major central banks, but it only strengthened the neutral position and uncertainty, since it is technically staying between the two lines of the price channel at 127.30 and 129.97. The signal line of the Marlin oscillator is in the negative zone, but it has not yet reached the bottom of its own ascending channel (turquoise). Considering the fact that the dollar has been rising against European currencies and the stock market is also rising, I believe that the price will climb above the resistance of 129.97. Then the price may overcome the resistance of the MACD line (131.72), and logically, the breakthrough will end by reaching the resistance of 133.74. The alternative scenario assumes overcoming the support at 127.30 and falling further to the underlying price channel line at 124.10. On the four-hour chart, the price is consolidating under the balance and MACD indicator lines, the Marlin oscillator is rising in the territory of the downtrend with the possible intention to move to the green zone. Let's wait for the resolution of the uncertainty when the US employment data comes out this evening.   Relevance up to 03:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334074

USD/JPY oscillates in a narrow range and is influenced by a combination of diverging forces. A modest USD uptick lends support, though weaker US bond yields cap gains ahead of NFP. Expectations for a hawkish shift by the BoJ underpin the JPY and further act as a headwind. The USD/JPY pair struggles to capitalize on the previous day's modest bounce from the vicinity of the 128.00 mark, or a two-week low and oscillates in a narrow range on Friday. Spot prices seesaw between tepid gains/minor losses and hold steady above mid-128.00s through the early European session. The US Dollar edges higher on the last day of the week and looks to build on its recovery from a nine-month low touched on Thursday, which, in turn, is seen acting as a tailwind for the USD/JPY pair. The USD uptick could be attributed to some repositioning trade ahead of the closely-watched US monthly jobs report, due for release later during the early North American session. The US Weekly Initial Jobless Claims data released on Thursday pointed to the underlying strength in the labor market and boosted expectations for strong Nonfarm Payrolls (NFP). This, in turn, forced investors to re-evaluate their expectations for future rate hikes by the Fed and lend some support to the USD. That said, weaker US Treasury bond yields cap gains for the buck. Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend, The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM The Japanese Yen, on the other hand, continues to draw support from expectations that high inflation may invite a more hawkish stance from the Bank of Japan (BoJ) later this year. The bets were lifted by Japan's Nationwide core inflation, which reached its highest annualized print since December 1981. This is seen as another factor keeping a lid on the USD/JPY pair, at least for now. Bullish traders also seem reluctant to place fresh bets in the wake of the overnight breakdown below a symmetrical triangle and ahead of the key US macro data. Nevertheless, the USD/JPY pair seems poised to register losses for the first time in three weeks.

The dollar rose slightly on Friday, maintaining some momentum after jumps in the previous session after a series of decisions by central banks in Europe. The rise in the USD can be attributed to some shift in trading position ahead of the closely watched US monthly employment report. Trading was relatively limited as markets awaited the latest US employment data later in the day, which could change US Federal Reserve policy. Weekly initial jobless claims in the US released on Thursday indicated strength in the labor market and boosted expectations for strong non-farm payrolls (NFP). USD/JPY The US dollar gained on the last day of the week and looks set to continue its bounce from the nine-month low recorded on Thursday, which is seen as a tailwind for USD/JPY. The Japanese yen, on the other hand, continues to benefit from expectations that high inflation could result in a more hawkish stance from the Bank of Japan (BoJ) later this year. Bets were lifted by Japan's nationwide core inflation, which hit its highest annualized level since December 1981. This is seen as another factor keeping USD/JPY in check, at least for now. The USD/JPY pair traded high around 128.80 at the beginning of the day, but fell in the following hours. Currently, the USD/JPY pair is trading below 128.40. EUR/USD Yesterday, the European Central Bank raised interest rates by half a percentage point on Thursday, but the euro fell below 1.0900 after ECB comments. During the ECB press conference, President Christine Lagarde acknowledged that the outlook for the eurozone has become less worrying for growth and inflation.  The ECB noted the likelihood of another similar rate hike next month, the meeting and its aftermath were in line with market expectations. Early Friday, ECB policymaker Gediminas Simkus said an interest rate cut this year was not likely. With a similarly hawkish accent, policymaker Peter Kazimierz noted that he did not see the March interest rate hike as the last one. These comments seem to help EUR/USD contain losses for now. The euro posted slight gains against the US dollar on Friday, thanks in part to news that the eurozone economy saw some gains last month. The EUR/USD pair in the European session is trading above 1.09 again at around 1.0940. Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM GBP/USD The Bank of England raised interest rates for the tenth time but hinted that its tightening cycle may be coming to an end, while Federal Reserve Chairman Jerome Powell said in a press conference following the Fed's 25 bp rate hike that the process of "disinflation" in the United States seemed to be in progress. Moreover, BoE President Andrew Bailey said that inflation will continue to fall this year and faster in the second half of 2023. In fact, the central bank forecast that the annual CPI inflation in the UK will fall from the current 10.5% to around 4% in 2020. toward the end of the year. This, in turn, has fueled speculation that the current cycle of rate hikes may be coming to an end and weakening the pound sterling. GBP/USD gained momentum during the European trading hours and went positive above 1.2250 during the day. Currently, the GBP/USD pair is on the border of the level. AUD/USD The Australian dollar falls below $0.71, pulling back slightly from nearly eight-month highs on overall dollar strength. Despite this, Australians continue to be supported by expectations that the Reserve Bank of Australia will continue to tighten its policy. Currently, Aussie Pair is trading at around 0.7060. Source: investing.com, finance.yahoo.com

The dollar jumped on Friday after data showed that US employers created many more jobs in January than economists had expected, potentially giving the Federal Reserve more leeway to hold interest rate hikes. The dollar recently rose 1.12% to 102.92 on the day against a basket of currencies, the highest since Jan. 12 and is on track for its best day since Sept. 23. USD/JPY USD/JPY started the trading week at 130.4790. For a day and a half, the pair traded in the range of 129.80-130.45. Subsequently, the USD/JPY pair started its decline below the lower limit and dropped below the 129.00 level. Trading below 129.00 lasted until Friday where in the US session the USD/JPY pair sharply rebounded to above 131.00 and thus ended the trading week at 131.15. The final level was just below the week's high of USD/JPY at 131.1940. The difference between the highest and the nanny level of trading is quite large, because the pair reached the lowest level at 128.1160. EUR/USD The EUR/USD pair started the trading week at 1.0875. For a day and a half, the pair traded below 1.0900. After that, the EUR/USD pair rose above 1.0900 and reached a weekly high of 1.1030. Trading above 1.0900 continued until Friday, where in the US session the EUR/USD pair fell sharply below 1.0800 and thus ended the week of trading at the week's low at 1.0798. The European Central Bank (ECB) raised its key interest rates by 50 basis points as expected and said it intends to make another 50 basis point hike in March, comments from ECB President Christine Lagarde weighed on the euro. Early Friday, ECB policymakers Gediminas Simkus and Peter Kazimierz said an interest rate cut this year was not likely. Read next: The UK Economy Expects A Decline And Is Gearing Up For Recession| FXMAG.COM GBP/USD The Cable Pair started the week at 1.2404. For the next two days, the GBP/USD pair traded around 1.2300 until it broke out at 1.2400, after reaching the weekly high, the pair traded just below this level. The drop below 1.2300 came closer to Friday where the GBP/USD pair plummeted below 1.2100. GBP/USD ended the week at 1.2056, which is the lowest trading level of the week, the lowest since Jan. 6 and its worst day since Dec. 15. The Bank of England, as widely expected, raised its key rate by a further 50 basis points to 4%, its highest level since autumn 2008, indicative of more sustained price pressures. However, the BoE removed the wording that "they will respond with force if necessary." Moreover, BoE President Andrew Bailey said that inflation will continue to fall this year and faster in the second half of 2023. In fact, the central bank forecast that the annual CPI inflation in the UK will fall from the current 10.5% to around 4% in toward the end of the year. This, in turn, has fueled speculation that the current cycle of rate hikes may be coming to an end and weakening the pound sterling. AUD/USD The AUD/USD pair started trading at 0.7111. The pair then traded in the 0.7000-0.7075 range. On Thursday, the pair managed to break above 0.7100 and record a weekly high of 0.7156. Closer to Friday, the couple began their decline. The Aussie Pair ended the week at its lowest level of trade for the week, at 0.6924. The Australian awaits the RBA's interest rate decision on Tuesday 7 February. With the December quarter 2022 CPI print showing headline inflation is still running strong at 7.8 per cent, expectations are for a further increase in the cash rate. Source: finance.yahoo.com, investing.com

The dollar is around 10% off the highs seen in late September, and understandably the view is that the dollar bull cycle – which started summer 2021 – is well and truly over. Consensus expects the dollar to weaken further this year, and we agree Dollar bear trend could pick up speed in the second quarter At the heart of the bearish dollar view is the call that the Fed will shift to a reflationary stance in the second half of 2023, US short-dated yields will fall and those yield differentials will move against the dollar. This story should be particularly acute for EUR/USD, where sticky core inflation in the eurozone means that the European Central Bank will not be considering rate cuts until late 2024. At the same time, lower natural gas prices have seen the eurozone terms of trade improve markedly and justify fundamentally higher levels of the euro. Assuming that the China reopening story continues to evolve positively, we think this confluence of factors can drive EUR/USD steadily higher throughout 2023. Most of the gains, however, may come in the second quarter, when US inflation is seen falling quite sharply. Sustained EUR/USD gains beyond 1.15 may be harder to achieve in the second half – especially if US debt ceiling negotiations are pushed to the limit. Some would argue that the US debt ceiling is a bullish factor for the dollar – prompting a flight to quality. Yet the evidence from 2011 proves the contrary. Only were the US very close to an unthinkable sovereign debt default – i.e. extreme risk aversion – would the dollar derive any brief benefit. Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM USD/JPY should continue to fall throughout the year. Bank of Japan meetings will prove positive event risks for the yen as investors second-guess how quickly a new BoJ governing team will unwind the current very dovish settings. We target 120 here and the yen should outperform on the crosses whenever the benign investment conditions are challenged. Sterling is trading on a slightly steadier footing as the UK government attempts to restore fiscal credibility. The marginally better global investment environment is also helping the risk-sensitive pound. Sterling may hold its gains through the first half of the year as the Bank of England stays hawkish. But clearer signs of easing labour market and price pressures in the second half of 2023 will see conviction build of a forthcoming BoE easing cycle. EUR/GBP may well be ending the year nearer 0.90/91.  TagsFX Dollar   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

A focus on Bank of Japan (BoJ) succession and prospective policy changes could see renewed JPY strength, according to economists at HSBC. Improving current account balance should also be helping “A move lower in USD/JPY over the coming few weeks will mostly rely on the outlook for BoJ policy change, but other more medium-term forces (such as improving current account balance) should also be helping in the background.”  “BoJ Governor Kuroda’s term ends on 8 April but the process of identifying his successor is likely to become more prominent in February. This will keep the narrative of potential policy change front and center in the coming weeks even if that change may have to wait for a number of months.” “With the JPY still undervalued (based on its real effective exchange rate) and residents underhedged, we think the ingredients are in place for a renewed move lower in USD/JPY.”

Very strong US jobs data released last Friday hit the Federal Reserve (Fed) doves, sent equities lower, the US yields and the US dollar higher.And the latest US jobs data will likely support the US dollar bulls this week, as we don’t have much on the economic calendar that could temper Friday’s monstrously strong NFP read, and remind us that the US economy is still slowing. Japan Plus, the fresh selling pressure on the Japanese yen will likely give an extra hand to the Fed hawks, on weekend news that the potential new Bank of Japan (BoJ) Governor, Masayoshi Amamiya will be dovish. In the light of the latest macroeconomic developments, a revision to medium term outlook is necessary. Forex • The dollar-yen’s latest jump above the 130 mark could be sustainable in the short to medium run.• The EURUSD traders may be happy to call it a good trade and retreat to the sidelines. • Cable could sink into bearish consolidation zone. Adani Elsewhere, the Adani selloff enters the third week, and things go from bad to worse as in increasing number of banks don’t accept Adani holdings as collateral anymore. US vs China The Chinese spy balloon that was flying over some strategic points in the US renewed tensions between US and China, and that could throw a floor under the gold’s selloff. Curde Oil And US crude is back into last year’s bearish trend, with however risks of tight supply, and Chinese reopening hanging in the air. Read next: The US Judge Denied The FTC's Request, Giving The Meta An Important Victory| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:31 That monstrously strong US jobs data shakes market dynamics 2:39 Next thing to watch! 3:48 Equities dive 5:33 USDJPY to extend gains above 130 6:59 EURUSD to pause rally 8:30 GBPUSD to slip below 1.20 9:43 XAU boosted by US-China’s ballooned tensions 10:14 US crude slips into last year’s bearish trend Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #NFP #wages #jobs #data #Fed #FOMC #inflation #expectations #Powell #USD #EUR #GBP #JPY #XAU #US #China #spy #balloon #Adani #selloff #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

The US dollar surged against its major trading partners early Monday ahead of a weak week of economic data and speeches by Fed officials resumed. The week starts calmly on Monday without key data. The US Monthly Employment Report (NFP) released on Friday showed that the economy added 517,000 jobs in January. jobs, significantly exceeding the consensus estimate. Moreover, the unemployment rate unexpectedly fell to 3.4%, the lowest level since May 1969. USD/JPY The prevailing risk-avoiding environment – as indicated by the generally weaker tone in equity markets – provides a safe haven for the Japanese Yen (JPY) and acts as a headwind for USD/JPY. The yen came under pressure during the Asian session after it was reported that the Japanese government had approached Bank of Japan (BoJ) Deputy Governor Masayoshi Amamiyi as a possible successor to Governor Kuroda. Market participants are of the opinion that Lieutenant Governor Amamiya will continue the policy of Governor Kuroda. The Japanese government has since dispelled rumors that it had approached Amamiya with a new BoJ governor to be announced in February. So USD/JPY started the week with a pattern above 132.00. Over the course of the day, the pair moved back below 132.00 but has now recovered and is trading at 132.1530. EUR/USD Rising tensions between the United States and China add to the bleak mood. On Friday, President Joe Biden postponed US Secretary of State Blinken's upcoming trip to China after a suspicious Beijing observation balloon that was flying in US skies was shot down. In terms of data, European figures were disappointing. On the one hand, Germany published December's factory orders, which fell by 10.1%YoY, much worse than expected. On the other hand, retail sales in the euro zone fell by 2.7% MoM in January. Moreover, we are likely to hear more aggressive statements from Lagarde, citing higher core inflation and growth forecasts. The EUR/USD pair stopped trading below 1.0790. At the beginning of the week, the EUR/USD pair is holding above 1.0765. Read next: Adani Group Company's Crisis Is Gaining Momentum, Finland Is The Happiest Country| FXMAG.COM GBP/USD The British pound has not enjoyed a good reputation lately. The economic data was not strong enough to support sterling against its rivals, while the ongoing strikes and the threat of more in the coming weeks hit the mood. On Friday, the Office for National Statistics (ONS) will release preliminary GDP data for Q4. Growth in the UK stalled in the fourth quarter of last year and may have reversed, fueling further recession fears. The GBP/USD pair tried to break above 1.2050 on Monday. Currently, the GBP/USD pair is trading above 1.2060. AUD/USD The Australian dollar collapsed on Friday after soaring US non-farm payrolls (NFP) data pushed the US dollar higher. Investors are cautious ahead of this week's decision by the Reserve Bank of Australia, which is expected to raise interest rates by 25 basis points for the ninth consecutive time. Annual inflation in Australia rose 7.8% in December, the largest increase since 1990 and above market forecasts of 7.5%. The Aussie pair in the early hours of trading tried to catch up and climbed above 0.6940 but failed to maintain momentum and the Aussie Pair trades below that level again near 0.6900. Source: wsj.com, finance.yahoo.com

Yesterday, the Japanese yen lost 146 points on news about the next Bank of Japan governor as current BOJ Governor Haruhiko Kuroda is set to leave his position on April 8. Deputy Governor Masayoshi Amamiya, a traditional dove on the Board, was reportedly approached to be the next BOJ head. On the daily chart, the resistance of the MACD indicator line stopped the pair's growth. The opening of the week occurred with a gap, and it is still not closed. The Marlin oscillator is turning down, so it is more likely that the price will close the gap and reach the support at 130.00, rather than continue rising to the target at 133.70. All chart lines are embedded lines of the global hyperchannel of the monthly chart with its beginning from September 2012. Overall, however, the price is trying to reverse the downtrend that reached its lowest point on January 16, so the 137.60 target looks achievable in the medium-term. We can see the intention to close the gap on the four-hour chart, but only the reversal of the signal line of the oscillator confirms this intention, which is still not enough for us to make a trading decision. The decline will probably have a complex form (saw-toothed).   Relevance up to 03:00 2023-02-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334315

The US dollar was mixed against its major trading partners early Tuesday - up against the euro and pound, down against the yen and the Canadian dollar. Today, Fed head Powell will speak. Powell will have to reconcile last week's decision by the Federal Open Market Committee to slow the pace of interest rate hikes with the exceptionally strong employment data for January released on Friday. In addition to Powell, Fed Vice Chairman for Supervision, Michael Barr, is set to speak at 14:00 ET. For the rest of the week there will be Fed officials. USD/JPY USD/JPY is rising after the US Fed raised interest rates by 25 basis points last week, and Chairman Powell said the central bank could deliver a few more rate hikes to bring inflation down to target. Additionally, reports that Bank of Japan Vice Governor Masayoshi Amamiya could replace the current Haruhiko Kuroda as central bank governor provided some support for USD/JPY as the BoJ's ultra-easy policy is expected to continue. USD/JPY is under some selling pressure on Tuesday and pulls some of the previous day's gains down to around 133.00, a monthly high. After the pair fell below 132.00, it is currently holding just above 132.0190. EUR/USD The EUR/USD pair extended its decline to a new three-week low below 1.0700 as demand for the US dollar prevails ahead of US Federal Reserve (Fed) President Jerome Powell's speech. Investors await speeches from ECB officials and FOMC chairman Jerome Powell. During the European morning, Germany published data on industrial production in December, which fell by 3.1% over the month and by 3.9% a year earlier, much worse than expected. The United States will publish a balance of trade in goods and services in December, which is expected to show a deficit of USD 68.5 billion. Continuing its decline, EUR/USD dropped below 1.0700 to 1.0694 and looks set to drop further. Read next: The Court In Munich Decided In Favor Of BMW| FXMAG.COM GBP/USD Sterling hit a new monthly low against the US dollar on Tuesday as investors expect the Bank of England (BoE) to end and possibly reverse its monetary tightening cycle soon, while the US Federal Reserve may hold interest rates higher for longer. Investors await further comments from the Bank of England and preliminary UK Gross Domestic Product (GDP) data. GBP/USD came under bearish pressure again and hit a month-low below 1.2000 on Tuesday. Despite a slight improvement in risk sentiment, the US dollar holds its ground and weighs heavily on the GBP/USD pair. AUD/USD The Australian dollar rose high after the RBA raised its cash rate target to 3.35% from 3.10%. Since the first increase in May 2022, a total of 325 basis points have been added. The Australian dollar gained above $0.69, bouncing back from monthly lows following the RBA decision. The RBA said in an accompanying statement: "The board expects further rate hikes will be needed in the coming months to ensure inflation returns to target and that this period of high inflation is only temporary." Following the RBA decision, the Aussie Pair holds above 0.69 but the pair has lost momentum and is closer to 0.6900 than close to 0.6930. Source: finance.yahoo.com, investing.com

The dollar fell as Powell spoke. The dollar fell Wednesday after Federal Reserve Chairman Jerome Powell refused to significantly tighten his tone on inflation in a closely watched speech, despite last week's strong employment data. USD/JPY The yen tumbled earlier this week as robust US jobs data suggested the Fed had more room for interest rate hikes. Recently, Japan's central bank countered speculation about another policy adjustment by keeping interest rates very low and leaving its yield control policy unchanged. As things stand, it seems that the market is having a hard time assessing the way forward as strong US data brings constant warnings of more hikes, which usually support USD valuations. At the same time, Japan is considering nominations for the top BoJ position for April, as the likelihood of policy normalization at the ultra-dovish Bank of Japan by the new incumbent cannot be ruled out. In the morning, the USD/JPY pair started rising towards 131.30. USD/JPY traded above 131.00 for the following hours of trading but fell below in the European session and is now trading at 130.6910. EUR/USD EUR/USD rebounded towards 1.0750 on Wednesday after falling below 1.0700 late Tuesday but struggled to gain further momentum. In the absence of high-impact data releases, investors will pay close attention to comments from Fed officials. Currently, the EUR/USD pair has fallen below this level, but slightly to the level of 1.0740. On Tuesday, mixed comments from European Central Bank (ECB) officials made it difficult for the euro to gain an advantage over its rivals. ECB politician Francois Villeroy de Galhau said they are not very far from the peak of inflation. On a hawkish note, policymaker Joachim Nagel reiterated that further significant interest rate hikes would be needed, adding that ECB rates were not restrictive yet. Finally, Isabel Schnabel, member of the Executive Board of the ECB, took a neutral tone. Federal Reserve Chairman Jerome Powell said US interest rates may need to be raised while the process of "disinflation" appears to be underway. Read next: Douyin Wants To Enter The Food Delivery Industry| FXMAG.COM GBP/USD At the end of Tuesday, FOMC Chairman Jerome Powell also confirmed good labor market data and reiterated that they will probably have to make further rate hikes. On an optimistic note, Powell said he expected 2023 to be "a year of significant decline in inflation." This remark made it harder for the US Dollar Index to maintain its upward momentum and helped GBP/USD recover some of its losses this week. From the UK's perspective, the strike action remains a concern for the government and civil servants are planning to carry out another strike on March 15. Chancellor of the Exchequer Jeremy Hunt will present his fiscal plan on the same day and will be under additional pressure to possibly reassess inquiries about the pay settlement. Overall, it is bearish for the pound as strike action disrupts the UK economy and challenges UK leadership. GBP/USD pair gained momentum and climbed to around 1.2100 on Wednesday. Currently, the GBP/USD pair is trading above 1.2090$. AUD/USD The Aussie pair is defending support at 0.6950 with the US Dollar generally subdued so far. The Aussie pair surged above 0.6990 today but failed to maintain momentum and is currently trading above 0.6980. Yesterday the RBA raised rates by 25 bp. Source: finance.yahoo.com, investing.com

As you can see on the daily chart, the MACD indicator line is a difficult resistance, and the price is trying to fight it for the fourth day. Even the help of the ascending Marlin oscillator proves ineffective. If we look at the market, we can all see that the dollar is strengthening, but yesterday, the S&P 500 fell 1.11%, and if it doesn't rise, then the USD/JPY pair will just move around the 130.00-133.75 range. The range looks wide, but it would be dangerous to trade in it. In the current situation, I expect the price to overcome the MACD line (132.00) and will move to the target at 133.75. But it may not reach the level, as it happened on January 11 (green check mark). On the four-hour, we have an uptrend - the price is above the indicator lines, the Marlin oscillator in the green zone. If the price goes under the MACD line (130.73), its attempt at climbing to 133.75 may not work out, we can expect the price to fall to 130.00. Relevance up to 03:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334582

The US dollar hovered near the middle of recent ranges compared to majors on Thursday as investors scrutinized comments from many Federal Reserve officials. Overnight, four Fed speakers continue to send their hawkish message to the market. The consistent message is that further interest rate hikes are announced and that the interest rate will have to stay high for a long time. The employment data initially raised expectations that the Fed might return to aggressive monetary policy, but Powell did not lean in that direction in his speech. Investors will be keeping a close eye on the consumer price inflation data that comes out on Tuesday for additional guidance on the policy outlook. USD/JPY During the morning trading hours, USD/JPY held above 131.40 but failed to sustain momentum. USD/JPY has returned to levels below 131.00. EUR/USD EUR/USD maintained its upward momentum and extended its daily gain towards 1.0800 on Thursday. Earlier in the day, data from Germany revealed that the Harmonized Index of Consumer Prices (HICP) fell to 9.2% on an annualized basis in January from 9.6% in December. This reading was much lower than market expectations of 10%, but the negative impact of these data on the euro remained short-lived. With the major European stock indices opening much higher on Thursday, the EUR/USD rate began to rise. At the time of publication, the German DAX 30 and Euro Stoxx 50 indices were up over 1% during the day. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM GBP/USD The Bank of England is concerned that UK inflation will remain stubbornly high. This suggests that the BoE has growing uncertainty about whether further policy tightening is warranted and that the current cycle of rate hikes may be coming to an end. The BoE has hiked interest rates 10 times since December 2021, the last being a week ago, as it battles to bring down sky-high inflation without causing a deep recession. Bank of England Governor Andrew Bailey is joined today by MPC members Huw Pill, Professor Silvana Tenreyro and Professor Jonathan Haskel in the Treasury Committee (TSC). So far, they have been asked whether the central bank is lagging behind in the fight against inflation. So far, the statements of BoE representatives suggest that the MPC is still worried about persistently high inflation and that the British economy may face a prolonged period of weakness. GBP/USD continued to move higher and hit a new six-day high above 1.2150 on Thursday. Cautious comments from BOE policymakers on the outlook for inflation and a risk-prone market environment help the pair keep their balance. On Friday, the UK's Office for National Statistics will publish estimate GDP figures for December 2022. AUD/USD The risk-sensitive Australian dollar gained against gains from US equity futures and the more hawkish Reserve Bank. AUD/USD rebounded strongly from 0.6920 in the Asian session. The New Zealand dollar also appreciated. Australians were rather dissatisfied after the last RBA meeting, which may point to further rate hikes in the future due to inflationary pressure. A slightly weaker dollar this morning is supporting the Australian bulls, including the rise of some key Australian commodities. The Australian pair is currently trading close to the $0.7000 level. Source: finance.yahoo.com, investing.com

The new governor will likely lead the Bank of Japan to a gradual change in its policy stance The Bank of Japan in Tokyo Ueda is expected to shift the BoJ's policy gradually Local wires reported that Prime Minister Fumio Kishida has picked Kazuo Ueda as the next BoJ governor. He is a professor and a former BoJ board member (1995-2005). The news surprised the market as he would bring a bit more of a hawkish tilt to monetary policy than the top contender, Masayoshi Amamiya. Local media also reported that Amamiya refused to take the post.  We believe that the initial market moves - yen and rates up and stocks down - could prove to be temporary. We don't think he is expected to immediately change the BoJ's policy stance based on his previous remarks; he has warned against raising rates too early but has also argued that an exit strategy from the current ultra-easing framework is needed at some point in the future. Therefore, we believe that the market will soon pay attention to incoming data - wage growth and inflation.  The nomination of the two deputy governors is also worth watching as it will form the top leadership of the BoJ. Uchida, one of two nominees, has worked very closely with Amamiya to design a monetary easing programme with the yield curve control policy. Thus, the characteristics of the board remain dovish.  Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM Foreign bonds may have liked the certainty of Amamiya becoming governor, but this does not mean they will jump to hawkish conclusions with Ueda. That said, the appointment comes at a difficult juncture for financial markets as the US disinflationary trend comes into question. The BoJ and Japanese markets will be hoping for a soft US CPI print next week or upward pressure on yields globally will likely resume, including in Japan. Read this article on THINK TagsMonetary Policy Bank of Japan Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

During the American session, the University of Michigan will publish a preliminary consumer sentiment survey for February. The main consumer confidence index is expected to rise to 65 from 64.9 in January. Market participants will keep a close eye on the component of the survey on inflation expectations for the next year, which fell to 4% in January from 4.4% in December. An unexpected increase in this reading could strengthen the US dollar. USD/JPY The yen strengthened on Friday before recovering slightly after Kazuo Ueda, who was reportedly tapped as the next governor of the Bank of Japan (BOJ), said the central bank's monetary policy was the right one. The government is also nominating Ryozo Himino, the former head of Japan's banking regulator, and BOJ director Shinichi Uchida as deputy governors, the Nikkei said. BOJ deputy governor Masayoshi Amamiya was the frontrunner for the role of governor, but the Nikkei reported that he turned down the job. The government is expected to present candidates to parliament on February 14. The BOJ shocked markets in December when it raised the 10-year yield cap to 0.5% from 0.25%, doubling the allowable range above or below zero. USD/JPY managed to rebound towards 131.00 after falling below 130.00 earlier in the day. EUR/USD EUR/USD picked up momentum and climbed to around 1.0800 at the end of Thursday, but lost much of its daily gains and closed below 1.0750. EUR/USD came under slight downward pressure and fell towards 1.0700 during Friday's European session. The US dollar gained strength thanks to rising US Treasury yields. The euro hit a 10-month high against the dollar earlier this month. The prospect of a milder recession thanks to falling energy prices and plentiful natural gas supplies, coupled with China's exit from three years of severe COVID-related restrictions, has generally ignited investors' appetite for European assets. However, this enthusiasm has made the euro look vulnerable, at least in the short term. The Euro is set for a second consecutive week of declines and at the time of writing EUR/USD is trading below 1.07 at 1.6998. Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM GBP/USD The pound weakened on Friday after data showed the UK economy stalled in the final three months of 2022, avoiding a technical recession but recording zero growth. The UK Office for National Statistics said on Friday that the UK economy contracted by 0.5% on a monthly basis in December and came to a standstill in the fourth quarter. On the positive side, industrial production rose 0.3% in December, beating market expectations for a 0.2% decline. The Bank of England forecast last week that the UK would enter a shallow but lengthy recession starting in the first quarter of this year and lasting five quarters. Moreover, Money Markets shows that investors believe that UK interest rates will peak below 4.40% by late summer, from the current 4%. UK consumer inflation data will be released next week and may have a bigger impact on these expectations. The GBP/USD pair previously surged to levels above 1.2130 but lost momentum and is now trading just above 1.2100 and below 1.2110. AUD/USD The Australian dollar held below $0.695, pressured by hawkish signals from Federal Reserve officials who reiterated their commitment to bring down inflation with more rate increases. The Australian Dollar remains supported by expectations that the Reserve Bank of Australia will tighten policy further. The RBA’s latest monetary policy statement showed that the central bank revised its inflation forecasts higher for this year, saying price pressures were spreading into services and wages. AUD/USD is headed towards 0.6900 amid disappointing Chinese CPI and PPI data. The Australian pair is not benefiting from the RBA's hawkish monetary policy statement, currently the Aussie pair holds above 0.6920. Source: finance.yahoo.com, investing.com

It has been a busy day for the Japanese yen, which jumped as much as 1.1% today before paring most of those gains. In the European session, USD/JPY is trading at 131.04, down 0.37%. Report says BoJ has chosen next governor The Japanese yen posted sharp gains after a Nikkei report that Kazua Ueda would be selected as the Bank of Japan’s next governor. Ueda is a former member of BoJ’s policy board and will replace Haruhiko Kuroda in early April. The yen’s gains, although only lasting a short time, indicate that Ueda is expected to take a more hawkish stance than Kuroda, who was the architect of an ultra-loose monetary policy that has largely remained in place even while other major banks have been hiking rates to tackle inflation. The question of who will become the next BoJ Governor has resulted in volatility for the yen. Earlier this week, a report that Deputy Governor Masayoshi Amamiya had been approached for the position sent the yen lower for a brief time, as Amamiya is considered a dove. Amamiya declined the offer and if the latest report is accurate, things should get very interesting under the helm of the hawkish Ueda. US unemployment claims rose for the first time in six weeks, from 183,000 to 196 thousand, which was above the consensus of 190,000. Still, this marked a fourth week of claims below the 200,000 level. The four-week moving average, which smooths out much of the week-to-week volatility, actually edged lower to 189,250. This is an indication that the labour market remains tight, despite reports of mass layoffs by Amazon, Facebook and other large companies.   USD/JPY Technical USD/JPY tested support at 130.71 earlier. The next support line is 129.12 There is resistance at 132.23 and 133.27 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

On Friday, the USD/JPY pair reached the support of the embedded global channel line at 130.05. Then there was a rebound to the resistance of the MACD indicator line, which the price is trying to overcome this morning. The signal line of the Marlin oscillator, which is in sideways movement, can perform the function of consolidation; afterwards, the price will probably continue to rise. The bullish target is the next embedded price channel line near the 133.77 mark. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM   On the four-hour chart, the price has settled above the balance and MACD indicator lines, the Marlin oscillator starts to rise in the area of the uptrend. I expect the uptrend to persist.     search   g_translate       Relevance up to 03:00 2023-02-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/334849

USD/JPY picks up bids to renew intraday high as US Dollar cheers risk-off mood. Hopes of doves to keep the BoJ reins weigh on Yen amid sluggish yields. Upbeat US inflation expectations, hawkish Fed concerns keep buyers hopeful. Japan policymakers verdict on BoJ leader, Japan Q4 GDP and US CPI will be crucial for clear directions. USD/JPY refreshes intraday high around 132.30 during early Monday in Europe. In doing so, the Yen pair reverses the previous week’s losses amid hopes of an easy money policy to prevail for long. Adding strength to the pair’s upside bias is the US Dollar’s demand amid a risk-off mood and also due to the hawkish bias surrounding the Federal Reserve (Fed), not to forget steady yields. Talks surrounding Kazuo Ueda’s appointment as the Bank of Japan (BoJ) Governor backed concerns over the ultra-easy monetary policy and favored the USD/JPY bulls afterward. On the other hand, fears about the mystery objects flying over the US and China underpin the US Dollar’s haven demand and propel the USD/JPY prices. The US shot down nearly four such objects while China prepares to hit one such unidentified object while weighing on the market sentiment and fueling the DXY. That said, the US Dollar Index (DXY), was up 0.20% near 103.80 by the press time. Elsewhere, the mildly hawkish Fed talks join Friday’s strong US Consumer Sentiment and US inflation expectations to offer extra strength to the USD/JPY prices, via US Dollar strength. During the weekend, Philadelphia Federal Reserve President Patrick Harker pushed back the chatters of a Fed rate cut during 2023. However, the policymaker did mention, “Fed not likely to cut this year but may be able to in 2024 if inflation starts ebbing.”  His comments were mostly in line with Fed Chair Jerome Powell’s cautious optimism and hence challenge the US Dollar buyers. Read next: Campbell Bought A $100,000 Plane To Live In It| FXMAG.COM Amid these plays, US stock futures fade the previous day’s corrective bounce while the Treasury bond yields remain sluggish around the multi-day high marked on Friday, which in turn helped the US Dollar Index (DXY) to grind higher after a two-week uptrend. Moving ahead, the preliminary readings of Japan’s fourth quarter (Q4) Gross Domestic Product, up for publishing on Tuesday, will precede the Japanese policymakers’ official selection of the BoJ leaders to direct short-term USD/JPY moves. Following that, the US Consumer Price Index (CPI) for January will be crucial for short-term Yen pair directions. Technical analysis A daily closing beyond the 50-DMA, around 132.20 by the press time, appears necessary for the USD/JPY bulls to keep the reins.

The dollar gained on Friday as investors grew concerned about a U.S. inflation report next week that could show a number that is higher than markets forecast amid data showing expectations for a continued rise in prices over the next year. As the data continued to show positive U.S. momentum, the dollar was on pace for its second weekly rise against a basket of six currencies, a run it has not seen since October. Federal Reserve Chair Jerome Powell has cited the Michigan survey's inflation outlook as one of the indicators the U.S. central bank tracks. USD/JPY The USD/JPY pair started the week trading at 132.12 and, despite the correction, was moving towards 132.50. Above this level on the first day of trading (Monday) it reached a weekly high of 132.88. In the following days, the USD/JPY pair fell below 132.00 until reaching the level of 130.50. The pair then traded in a range of 130.00-131.50 until USD/JPY dropped to 129.9550, which is the pair's weekly low. The pair closed between the highest and lowest levels, i.e. above 131.00, 131.38 to be exact. The yen rose on Friday across the board with Kazuo Ueda reportedly set to become the next Bank of Japan (BOJ) governor but pared gains after he said the central bank's monetary policy was appropriate. The Japanese unit was on track for its first weekly gain versus the dollar after posting losses for three straight weeks. Japanese Prime Minister Fumio Kishida said the government is planning to present the BOJ governor nominee to parliament on Tuesday, but did not answer a question on whether Ueda would be put forward. Read next: Tesla Will Increase Output For 2023, Deliveroo Are Planning To Cut Jobs| FXMAG.COM EUR/USD The EUR/USD pair started the week trading close to $1.08 at 1.0792. In the following hours, the EUR/USD pair reached a weekly high of 1.0804 and then began to fall towards 1.07. On Tuesday, EUR/USD fell below 1.07, then rose again on Wednesday, breaking above 1.0750 on Thursday. The pair failed to maintain this momentum and on the final day of trading fell to a weekly low of 1.0670. After that, EUR/USD rose slightly and closed the week just above the low of 1.0681. GBP/USD The Cable pair started trading at 1.2050. And for the next two days she lingered in this area. On Wednesday, GBP/USD started an upward move towards 1.21. On Thursday, GBP/USD traded close to 1.22 at 1.2191 which is the weekly high of GBP/USD, but fell back on Friday to close the week at 1.2058. The week's low was at 1.1963 for the GBP/USD pair. AUD/USD The Aussie Pair started trading at 0.6910 and fell on Monday to a weekly low of 0.6859. In the following days, the pair stayed above 0.69. On Thursday, AUD/USD broke above 0.70 and hit a weekly high of 0.7011, similarly to EUR and GBP, the Australian pair failed to maintain momentum and dropped Friday to end the week at 0.6921. The Australian and New Zealand dollars found support on Friday as markets continued to ramp up expectations for how high local interest rates might rise, sending bond yields to one-month peaks. Having hiked rates by a quarter point to a decade-high of 3.35% on Tuesday, the Reserve Bank of Australia (RBA) said domestic price pressures were building and spreading into services and wages, so it was unclear how high rates might have to go. Source: finance.yahoo.com, investing.com

The dollar approached a five-week high against its major peers on Monday, and investors increased their bets on the Federal Reserve staying on tight monetary policy longer. The most important event this week will be US consumer prices data released on Tuesday, which will strengthen expectations regarding Fed policy. Strong CPI data in the US would increase expectations for monetary policy tightening by the Federal Reserve, which would probably push the dollar up. USD/JPY USD/JPY started the new week at the level of 131.3470, and in the following hours it rose and broke through the level of 132.00. At the time of writing, USD/JPY is trading above 132.50. The asset is expected to refresh a four-day high above 132.00 as investors are extremely risk-averse ahead of the United States inflation report. In January, Japanese investors became net buyers of foreign bonds for the first time in five months as US bond yields fell in a sign that slowing inflation would prompt major central banks to slow down the pace of interest rate hikes. Japanese investors bought foreign bonds net worth 1.56 trillion yen ($11.79 billion) in January, according to data from Japan's Ministry of Finance, marking their biggest buying frenzy since September 2021. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM EUR/USD On Friday, a preliminary consumer sentiment survey by the University of Michigan in February showed that annual expected inflation rose to 4.2% from 3.9% in February. The reading helped the US dollar stay strong against its rivals ahead of the weekend and forced EUR/USD to end the week in the red. Early Monday, the US Dollar Index holds strong and limits EUR/USD's gains. The EUR/USD pair started trading at 1.0684 this week. In the following hours, EUR/USD fell towards 1.0660 but rebounded above 1.0680. At the time of writing, the EUR/USD pair is trading at 1.0675. The European Commission raised the EU growth forecast for 2023. The European Commission noted that the EU economy entered 2023 in a better position than predicted in the autumn and raised its growth forecasts for this year to 0.9% in the euro area. The Eurozone looks set to avoid a technical recession, thanks in large part to falling gas prices and a solid labor market. The Commission has also lowered its inflation expectations, with headline inflation now expected to fall to 5.6% in 2023. GBP/USD The GBP/USD pair started the week at 1.2050. Similar to the Euro pair, the GBP/USD pair fell towards 1.2035 during the morning trading hours before rising above 1.2060 again. Currently, GBP/USD is trading at 1.2056. The market awaits this week's data, which could show that unemployment in the UK remained flat in December and weekly earnings rose less than in November. The British economy, similarly to the US, will publish inflation reports this week. UK is expecting inflation to fall. UK retail sales figures for January are expected to show that while consumers continue to spend less, the pace of decline in sales may have slowed in the new year. AUD/USD Markets expects RBA Chairman Philip Lowe to reinforce the bank's hawkish stance at parliamentary hearings this week. Reserve Bank of Australia (RBA) Governor Philip Lowe will testify before the Senate this week. Lowe will appear before the Senate Appraisals Committee on Wednesday, and then on Friday will give his semi-annual testimony to the House Economics Committee. In between these public appearances will be squeezed in employment data on Thursday. The central bank surprised markets last week by signaling at least two more rate hikes after raising the cash rate to a decade high of 3.35%. This stifled any talk of a break and led the markets to price in a final rate of 4.2% The AUD/USD Pair started the week close to 0.6900, where it fell below this level in the following hours. The Australian pair managed to break above 0.6915 and is currently trading above 0.6930. Source: investing.com, finance.yahoo.com

The dollar-yen pair is showing increased volatility. On Friday, sellers of USD/JPY updated the local low, reaching 129.84, whereas today, buyers are already testing the 132nd figure. Traders cannot determine the vector of price movement, but the pair fluctuates in a wide price range. The nervousness of market participants is quite understandable since tomorrow, February 14, the next Governor of the Bank of Japan will be known. Moreover, key data on the growth of Japanese economy in Q4 will be published on Tuesday. On top of everything else, a crucial inflation report will be released tomorrow in the USA, which will show the dynamics of consumer price index in January. All of these fundamental factors could cause serious price turbulence. Therefore, current price fluctuations of USD/JPY should be treated with great caution. Is Ueda not an ally of the yen? Last week, the Japanese currency strengthened its position throughout the market after Bank of Japan Deputy Governor Masayoshi Amamiya turned down offer to succeed current Governor Haruhiko Kuroda. His candidacy was to be submitted to Parliament for approval on February 10. Amamiya is a supporter of a soft monetary policy, so his decision not to run for the position of the head of the central bank had an impact on USD/JPY: on Friday, the price updated the weekly low, denoting around the 129th figure. Moreover, the Japanese media (Nikkei Asia in particular) announced the name of the new favorite of the election race: according to the insiders, on February 14, the government will nominate Kazuo Ueda, who was a member of the Governing Council of the Bank of Japan. Initially, the market was dominated by the view that he was more hawkish than Kuroda. However, it turned out later on that was not the case. At least in his brief interview to Reuters, Ueda called the Bank of Japan's policy "adequate." In his opinion, Japanese regulator should continue to implement accommodative policy "by making logical decisions and clearly explaining its position." Such comments disappointed sellers of USD/JPY, so it is not surprising that today the pair is already testing the area of the 132nd figure. However, only journalists have "appointed" Ueda so far: government officials have not commented on the information about his candidacy. Moreover, some analysts urge not to make hasty conclusions and treat media reports with great caution. According to them, in the past, the government eventually nominated other candidates amid harsh criticism of the candidate "announced" by journalists or other political reasons. Therefore, the intrigue remains here, which means that the growth in the price of USD/JPY looks unsteady. Note that the last meeting of the Bank of Japan under the leadership of Kuroda will take place on March 10, and the first meeting of the central bank under its new head will be held on April 28. Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM Important releases on Tuesday Japan's economic growth data for Q4 2022 will be released on February 14. In Q3, Japan's GDP took an unexpected downturn. The drop in the economy was mainly due to higher prices, which had a negative impact on household spending in the country. Also the downward dynamics was due to the weakening of the yen against world currencies. Since fall last year, the yen has appreciated by more than 2,000 points against the dollar. But inflation in Japan still continues to update multi-year records. According to the latest data, the country's overall consumer price index rose to 4.0%, excluding food and energy prices by 3.0%, and corporate goods price index jumped by 10.2%. At the same time, according to the forecasts of most experts, Japanese economy will show growth in the fourth quarter, leaving the negative area (growth by 0.5% is estimated). While the GDP deflator index may jump to 1.1% (the indicator will rise above zero for the first time since 2020). If the above indicators come out at the forecast level, the yen may receive support, as the market will again increase hawkish expectations regarding possible decisions of the Bank of Japan in the second half of the year. Conclusions Tomorrow, the dollar-yen pair will be in a zone of price turbulence. In addition to the Japanese government's personnel decisions and the Japanese GDP growth data, there will be a report on Tuesday on the Consumer Price Index growth in the USA. Such major fundamental factors can trigger a volatility storm, and it is impossible to foresee the price movement vector here. That is why, for the time being, it would be best to maintain a wait-and-see attitude in the USD/JPY pair, as the high-profile events of Tuesday might "redraw" the fundamental picture considerably.   Relevance up to 10:00 2023-02-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334921

The Japanese yen has started the week with sharp losses. In the European session, USD/JPY is trading at 132.54, up 0.86%. Japan’s GDP expected to rebound There are high hopes for the Japanese economy, which is expected to climb by 2% in the fourth quarter, following a 0.8% decline in Q3. Japan reopened to tourists in October, which fueled a recovery in the services sector and this will likely boost GDP. Even so, the economy has headwinds to deal with such as higher inflation and a weaker global economy, which will likely weigh on growth in 2023 Q1. Ueda to take over at BoJ There has been a guessing game over the successor to Haruhiko Kuroda as Governor of the Bank of Japan and press reports about a successor have generated plenty of volatility from the Japanese yen. Last week, a report that Deputy Governor Masayoshi Amamiya had been approached for the position sent the yen briefly lower, as Amamiya is considered a dove. Amamiya declined the offer and in a surprise move, the BoJ has decided to appoint Kazua Ueda. The news initially resulted in yen buying, as the markets viewed the choice as a signal for fresh thinking and a change in policy. This view was quickly dampened by Ueda himself, who said on Friday that current policy settings were appropriate. This has sent the yen sharply lower on Monday. Ueda may be trying to sound diplomatic in order to avoid any waves ahead of his appointment, and it’s very possible he will tighten policy once he’s in charge. In the meantime, the BoJ is expected to maintain its ultra-loose policy, so the yen won’t be getting any help from the BoJ for the time being. Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM USD/JPY Technical USD/JPY has support at 131.38 and 130.71 There is resistance at 132.96 and 134.18 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

USD/JPY prints mild losses while reversing from monthly high. Treasury bond yields remain pressured amid market’s indecision ahead of the key US CPI. Mixed Japan GDP gained little attention as Ueda’s nomination as BoJ leader appears hawkish. USD/JPY bounces off intraday low but remains stuck with mild losses near 132.00 amid early Tuesday morning in Europe. The Yen pair initially cheered the pullback in the Treasury bond yields before the Japanese government’s announcements of Bank of Japan (BoJ) officials triggered hawkish concerns and weighed on the prices. Also favoring the USD/JPY bears is the broad US Dollar pullback as traders brace for a positive surprise from the US Consumer Price Index (CPI) for January. Earlier in the day, Japan’s preliminary readings of the fourth quarter (Q4) Gross Domestic Product (GDP) data printed mixed readings. Following that, the official nomination of Kazuo Ueda as the BoJ leader weighed on the USD/JPY prices. That said, Bloomberg came out with an analysis suggesting further challenges to the Bank of Japan’s (BoJ) easy money policy during the incoming Kazuo Ueda’s reign. It’s worth noting that Ueda previously defended the current monetary policy in his latest public speech. On other hand, the US Federal Reserve (Fed) hawks kept defending the rate hike concerns but the market’s pricing of slower rate lifts and a nearer peak seemed to have weighed on the US Treasury bond yields. As a result, the US 10-year Treasury bond yields drop nearly two basis points to 3.69% at the latest, after reversing from a one-month high the previous day. Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM Elsewhere, fresh fears of the US-China tension over the balloon shooting also challenge the sentiment and put a floor under the USD/JPY price. US Congress will take a bipartisan look at unidentified aerial objects that have made their way into U.S. and Canadian airspace, and why they were not found sooner,” said US Senate Majority Leader Chuck Schumer. It’s worth noting that a US Military General previously ruled out odds favoring the likely hand of China in the “unidentified objects” which were shot down during the weekend. Against this backdrop, S&P 500 Futures print mild losses whereas Japan’s Nikkei 225 rises 0.65% intraday to near 27,600 by the press time. Moving on, the market consensus anticipates 6.2% YoY print of the US CPI for January but the odds of the positive surprise during the year-start are high, which in turn keeps USD/JPY bears on the dicey floor. Technical analysis USD/JPY extends the early-day pullback from the previous weekly top surrounding 132.90 and forms “Double tops”, a bearish chart pattern. Also justifying the Yen pair’s latest weakness is the RSI (14) line that took a U-turn from the overbought conditions, not to forget the bearish MACD signals.

The dollar fell on Tuesday in anticipation of the eagerly awaited inflation report. Markets are looking at US consumer inflation data for further clues to the Federal Reserve's policy outlook. Investors expect the headline annual CPI to fall to 6.2% from 6.5% in December and the core CPI, which excludes volatile food and energy prices, to fall to 5.5% from 5.7%. USD/JPY The Yen pair initially cheered the pullback in the Treasury bond yields before the Japanese government’s announcements of Bank of Japan (BoJ) officials triggered hawkish concerns and weighed on the prices. Also favoring the USD/JPY bears is the broad US Dollar pullback as traders brace for a positive surprise from the US Consumer Price Index (CPI) for January. Japan’s preliminary readings of the fourth quarter (Q4) Gross Domestic Product (GDP) data printed mixed readings. Following that, the official nomination of Kazuo Ueda as the BoJ leader weighed on the USD/JPY prices. Fresh fears of the US-China tension over the balloon shooting also challenge the sentiment and put a floor under the USD/JPY price. The USD/JPY pair started trading above 132.30 today, but then fell towards 131.90. The yen pair managed to bounce back and traded close to 132.30 again. USD/JPY is currently trading above 132.20. EUR/USD The European Commission's winter economic forecast published yesterday says that the EU economy is geared to avoid recession. The EUR/USD pair held a narrow range of 1.0730-1.0745 in morning trading, but surged up in the European session. The euro maintained its earlier gains against the slightly weaker US dollar, with EUR/USD changing hands around 1.0760. The latest US inflation report due to be released will be another driver of action. Read next: Brazil’s Bank Allows To Pay Taxes Using Cryopto, Ford Will Cut Jobs In Europe| FXMAG.COM GBP/USD The UK unemployment rate remained unchanged for the 3 months to December 2022, as expected. The number of people out of work for up to 6 months has increased, mainly among people aged 16 to 24. The number of people working in the UK increased by 74,000. in the three months to December, well above market forecasts for an increase of 40,000. and after an increase of 27,000 in last month. Meanwhile, from November 2022 to January 2023, the number of vacancies fell by 76,000. up to 1,134,000 UK wages rose 5.9% in December 2022 compared to the same month last year, beating estimates and down 6.4% from the previous print. What will be of concern, however, is the increase in average earnings without bonuses, which rose to 6.7%, beating the 6.5% forecast. The data compares with market forecasts of growth of 6.2% and 6.5%, respectively. In real terms, adjusted for inflation, the increase in total and regular wages fell by 3.1% in the year from October to December 2022 for total wages and by 2.5% for regular salaries. GBP/USD has gathered bullish momentum and climbed toward 1.2200 in the European trading hours. AUD/USD The Australian and New Zealand dollars tried to hold their gains on Tuesday after a rebound on Wall Street boosted global risk sentiment and Australian data underlined the case for further domestic interest rate hikes. Currently, the price of the Australian pair is around 0.6970. Source: investing.com, finance.yahoo.com

On Tuesday, the USD/JPY pair successfully consolidated above the balance and MACD indicator lines, which is confirmed by an attempt to test the point of intersection of these two indicator lines of the lower shadow of yesterday's candle. The signal line of the Marlin oscillator is trying to turn down, but it is still far from the overbought area, so the direction of the oscillator trend is dominant here. The 133.77 target is relevant. A consolidation above the level will open the prospect of growth to the next embedded price channel line around 137.62. The first signal of the reversal is when the price overcomes the support of the MACD line on the daily chart (131.35). The target is 130.08. The price is rising above both indicator lines on the four-hour chart. Marlin is in the green zone. An uptrend in the short-term. This could be supported tonight, after the release of data on retail sales and industrial production in the United States; retail sales in January is expected to increase by 1.8%, while industrial production is seen to increase by 0.5%.   Relevance up to 03:00 2023-02-16 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335123

Looking at the market pricing, you could’ve hardly guessed, but yesterday’s US inflation report was not brilliant. US stocks But US stocks gave a mixed reaction. Why?! Why did people buy equities on strong inflation data yesterday, is the main topic of today’s Market Talk.Still, treasury markets seemed more down to earth, as the US 2-year yield ticked to the highest levels since last November, activity on Fed funds futures gave a little more than 12% probability for a 50bp hike at the next FOMC meeting, versus around 9% at the start of the week. USD index But the dollar index remained stuck below its 50-DMA. Gold Gold extended losses to $1843 on the back of stronger yields and firmer US dollar. EUR/USD The EURUSD found support above the 50-DMA, which stands around the 1.0715 mark. USD/JPY The dollar-yen cleared resistance near its own 50-DMA level, but the risks are still tilted to the downside in USDJPY. Read next: Airbnb Posted A Profit Of $1.9. Billion, Air India And Largest Commercial Aircraft Deal In Aviation History| FXMAG.COM UK CPI and Crude Oil In the UK, inflation in January still eased more than expected to 10.1%. Crude oil remains offered into the 100-DMA, on a massive 10 mio barrel build in US oil inventories last week, while Biden Administration announced there would be further releases from the strategic petroleum reserves of 26 million barrels earlier this week.  Warren Buffett In individual stocks, Warren Buffett sold 86% stake in TSM. Shares plunged more than 4% in Taipei. Watch the full episode to find out more! 0:00 Intro 0:28 US inflation eased less than expected in January 2:55 But who cares? 5:35 FX & yields update 7:05 UK inflation must please BoE, but not sterling 7:36 Crude oil down on massive US inventory build 8:27 Buffett sells TSM. Ouch. Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #GBP #inflation #data #Fed #BoE #BoJ #expectations #EUR #JPY #XAU #US #crude #oil #F13 #TSM #Ford #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

The dollar rose on Wednesday amid stubbornly high US inflation data and sharp interest rate talks from Federal Reserve officials. Year on year prices increased (CPI) by 6.4%. This is down from 6.5% in December, but above economists' expectations of 6.2%. The Core CPI, which excludes volatile food and energy prices, rose 0.4% as expected. More importantly, the underlying details of the report revealed that the core services' inflation, which the Fed pays close attention to, stood at 7.2% on a yearly basis. These figures showed markets that the disinflation has not picked up any steam in January and reminded that the Federal Reserve is unlikely to entertain the idea of a policy pivot. USD/JPY Kazuo Ueda, the Japanese government's nominee to be the next governor of the Bank of Japan (BoJ), will inherit a difficult set of problems when he takes over from incumbent Haruhiko Kuroda on April 8. Japanese inflation y/y reached 4% in December, the highest level since January 1991. The new central banker will have to decide when and by how much the BoJ needs to start reducing its very loose monetary policy in order to keep inflation in check while allowing enough monetary slack to allow for economic growth. As other countries have recently learned, once inflation takes root, it becomes increasingly difficult to bring it down. The yen pair after yesterday closed trading near 133.00 today in the first hours of trading USD/JPY started a decline towards 132.55. The drop in the first hours of trading was not sustained and the pair rose above 133.00. At the time of writing, the yen pair is trading at 133.31. EUR/USD The EUR/USD pair started the day trading above 1.0740 but fell towards 1.0710 in the following hours. EUR/USD gained momentum in the European session and traded near 1.0730 but lost momentum and is now trading around 1.0715. According to ING, remarks by European Central Bank President Christine Lagarde later probably won't move the euro materially. EUR/USD pair should remain driven by dollar moves and faces near-term "downside risks" as the market raised its U.S. interest rate expectations following Tuesday's higher-than-expected inflation data. Read next: In The United States The Demand For Warehouse Space Is Still Growing| FXMAG.COM GBP/USD The British pound fell this morning after the UK CPI. The report showed weaker than expected inflation data, both y/y and m/m, concerning headline and core inflation, respectively. The UK's Office for National Statistics reported on Wednesday that the Consumer Price Index declined 0.6% on a monthly basis in January, causing the annual rate to retreat to 10.1% from 10.5%. The Core CPI also edged lower to 5.8% from 6.3% on a yearly basis, coming in lower than the market expectation of 6.2%. Although it's too early to say how these figures could influence the Bank of England's (BoE) policy outlook, the reaction suggests that markets have scaled back hawkish BoE bets. The Cable pair started trading at a high of 1.2175 on Wednesday, but in the following hours it started to fall initially to 1.2150 and then to 1.2100. Currently, GBP/USD is below 1.2100, at 1.2076. AUD/USD The Aussie pair is just below 0.6900. The AUD/USD pair is under strong selling pressure on Wednesday and is pulling further back from its over-week high. The RBA's latest monetary policy statement showed the central bank revised its inflation forecast for this year higher, saying price pressures were spreading to services and wages. The communiqué suggests two more interest rate hikes in the coming months and possibly a third if inflation remains high. Source: investing.com, finance.yahoo.com

USD/JPY snaps three-day uptrend as it retreats from six-week high. Convergence of one-month-old previous support line, ascending trend line from the last Friday challenges bears. Firmer oscillators add strength to the upside bias while 200-SMA acts as additional downside filter. USD/JPY prints the first loss-making day in four as bulls take a breather around the 1.5-month high during early Thursday. In doing so, the Yen pair flirts with the 133.60 support confluence heading into the European session. Although the overbought RSI (14) triggered the USD/JPY retreat, a convergence of the resistance-turned-support line from January 18 and a one-week-old ascending trend line challenges the Yen pair sellers around 133.60. On the same line are the bullish MACD signals and the pair’s higher-low formation on the Daily chart. It’s worth noting, however, that the quote’s further recovery needs validation from the 134.00 round figure to challenge the latest high of 134.35. Following that, the previous peak of around 134.80 and the December 2022 top near 138.20 will be in focus. On the flip side, a clear break of the 133.60 support confluence can quickly drag the USD/JPY price towards the 200-Simple Moving Average (SMA) support of 130.70. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM Should the quote remains weak past 130.70, the 130.00 round figure and the previous weekly bottom surrounding 129.80 could please the USD/JPY bears before directing them to the one-month-old ascending support line, close to 129.00 by the press time. Overall, USD/JPY remains on the bull’s radar despite the latest pullback from the multi-day high. USD/JPY: Four-hour chart Trend: Limited downside expected remaining time till the new event being published U.S.: Leading Indicators

The dollar stalled on Thursday as investors scooped up higher-risk currencies after a string of strong US economic data bolstered confidence in the global growth outlook, even as the Federal Reserve appears poised to raise interest rates further. However, the question for market watchers is how well the economy can hold up, especially as interest rates are much higher than many initially thought. The US Bureau of Labor Statistics will publish data on the producer price index (PPI) for January. It is forecast that in annual terms the PPI will fall to 5.4% from 6.2% in December and the core PPI will fall to 4.9% from 5.5%. USD/JPY The yen pair started the day trading above 134.00, but the upward momentum was not maintained and USD/JPY fell below that level to 133.70. In the following hours, USD/JPY tried to make up for losses. At the time of writing, the yen pair is close to 134.00 and trading at 133.9520. The appointment of former BJ board member Kazuo Ueda as governor of the central bank cooled speculations about an early normalization of interest rates. In the past, Ueda has warned of the danger of premature interest rate hikes, putting an end to any fears of higher interest rates in the foreseeable future. The perception that Ueda could improve YCC, given accelerating inflation, could at least limit USD/JPY's rise. EUR/USD EUR/USD regained traction after Wednesday's declines and moved into positive territory just above 1.0700 early in the day on Thursday. The EUR/USD pair is trading slightly above 1.07. European Central Bank President Christine Lagarde told the European Parliament on Wednesday that she intended to raise key interest rates by 50 basis points (bps) in March. Lagarde reiterated that core inflation in the euro area is still high and price pressures remain strong. Later in the day, ECB Chief Economist Phillip Lane and ECB Executive Board Member Fabio Panetta will deliver speeches. If ECB officials leave the door open to additional rate hikes after March, euro losses are likely to remain contained in the short term. Read next: Tesla Will Make Supercharger Network, Visa Will Allow The Use Of Cryptocurrencies To Settle Transactions| FXMAG.COM GBP/USD The Bank of England has already signaled it may stop raising interest rates in March, and Wednesday's inflation figures reinforced that view. Softer-than-expected January UK inflation data weighed heavily on sterling during European trading hours on Wednesday. GBP/USD is trading positive around 1.2050 on Wednesday. Positive turnaround in risk sentiment helps pair maintain gains as investors await US macro data releases. The UK inflation data released yesterday surprised negatively, which resulted in lower expectations for rate hikes. This also followed positive employment data, with market participants now pricing in a peak rate below 4.5%. This week's positive data could be the stimulus the Bank of England (BoE) needed to signal an early pause in rate hikes that could see GBP face further selling pressure. AUD/USD The recent decline of the Australian dollar against the US dollar reflects the disparity in the growth prospects of the two economies. This morning's decline from the dismal Australian jobs was no exception - employment fell for the second month in a row in January, while the unemployment rate rose to its highest level since May. The pair has maintained its intraday gains for the first half of the European session and is currently trading near the 0.6920 region. Source: investing.com, finance.yahoo.com

A new broom sweeps clean. Kazuo Ueda's rise to power at the Bank of Japan was greeted with enthusiasm by fans of the yen. The former board member is considered more "hawkish" than Governor Haruhiko Kuroda or Deputy Governor Masayoshi Amamiya, whom investors predicted for the post. At the same time, whoever leads the BoJ, the regulator's decisions will be dictated by incoming data, which so far does not please the USDJPY bears. Ueda Ueda is notable for his ability to find a compromise. He believes that Japan's weak economy requires monetary stimulus but, at the same time, sympathizes with bankers who complain that low rates reduce their profits. He demonstrates familiarity with the theories that high public debt is not a problem but nods to fiscal "hawks" who fear that the indicator may get out of control. A tough job to do The new governor of the Bank of Japan has a tough job to do. Starting with normalizing monetary policy, including abandoning control of the yield curve, raising the overnight rate, and reducing the overly bloated balance sheet. The slightest error along the way is fraught with serious turmoil in the financial markets. And investors are already showing concern, as reflected in the increased volatility of the yen. Dynamics of the volatility of the yen and the foreign exchange market Kazuo Ueda seems a slippery type. It is premature to expect that a difference in his views from Kuroda's stance, confident that inflation will slow down on its own, will initiate normalization. The new head of the BoJ got a troubled economy, which grew 0.6% in the fourth quarter, against a projection of 2% by Bloomberg experts. Japan's foreign trade deficit reached a record high of £3.5 trillion in January. Export growth slowed sharply to 3.5%, while imports, on the contrary, accelerated to 17.8% amid expensive energy supplies. Dynamics of the trade balance of Japan If the economy continues to show signs of weakness, then Ueda will have no choice but to stimulate it. With the Fed ready to raise the federal funds rate to at least 5.25%, monetary policy divergence is calling USDJPY upward. But the derivatives market gives a 50% chance of three acts of tightening the Fed's monetary policy at 25 bps each: in March, May and June. If all this happens, the U.S. dollar will continue to strengthen. USD/JPY The strength of the U.S. economy also speaks in favor of a continued USDJPY rally. An impressive gain of 517k in January employment was accompanied by the fastest 3% month-on-month increase in retail sales in two years and the first increase in industrial production in three months. Technically, the pullback from fair value triggered a USDJPY correction and gave us a good chance to form longs from the 128–128.5 area. Overcoming the 134.2 pivot level will allow them to build up towards 135.9 and 138.2   Relevance up to 10:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335311

USD/JPY broke through the resistance of the global price channel line at 133.77 on Wednesday, consolidated above the level on Thursday, and then continued to rise during the Asian session today. Now, it is heading towards the target level of 137.62, thanks to the Marlin oscillator being in a positive area. There is also a small consolidation above the level of 133.77 on the four-hour (H4) chart. The Marlin oscillator has released a little tension, seemingly ready for a more decisive rise. And since the pair broke through yesterday's high, it is likely that the quote will hit the target level of 137.62 Relevance up to 03:00 2023-02-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335386

The dollar rose to a six-week high on Friday as strong US economic data and comments from Federal Reserve officials prompted investors to bet on another rate hike. The Fed's target range is currently between 4.5% and 4.75%. Economists at Goldman Sachs on Thursday raised their expectations for Fed rate hikes this year. After previously expecting two more hikes, they said they now expect three more hikes of 25 bp in March, May and June. That would push interest rates to 5.25% to 5.5%. The US Economic Report will not include any macroeconomic data releases that could significantly affect the behavior of the US dollar. As such, market participants will pay close attention to risk perception. USD/JPY The yen pair hit its highest level in almost two months. USD/JPY has been trending up since the start of the day. USD/JPY started the day trading just above 134.07 and has now crossed the 135.00 mark. EUR/USD EUR/USD extended its decline during the Asian trading hours and hit its lowest level since early January below 1.0650. The technical outlook for the short-term pair shows that the bearish bias remains intact. Meanwhile, comments from Federal Reserve (Fed) and European Central Bank (ECB) officials add to the burden on the EUR/USD pair. The euro could weaken further as the market's interest-rate rise expectations for the European Central Bank may be overdone given comments from ECB members about the risks of excessive policy tightening. ECB board member Fabio Panetta said on Thursday that the ECB should consider the risk of unduly tightening policy and argued that the bank should not commit unconditionally in advance to future policy moves. From a more neutral point of view, the ECB's chief economist Philip Lane said he was open-minded about the exact amount of monetary tightening that would be needed to meet the inflation target. On the other hand, Cleveland Fed President Loretta Mester reiterated that the interest rate will have to rise above 5% and stay there for some time for the Fed to control inflation. Read next: Wyoming Prohibits Forced Disclosure Of Private Cryptographic Keys By US State Courts, JP Morgan Projections Of FX Market| FXMAG.COM GBP/USD GBP/USD extends losses towards 1.1900 in the early European morning. The strength of the US dollar (USD) had a big impact on the GBP/USD exchange rate in the second half of the week. Hawkish comments from Fed policymakers and the latest released macroeconomic data have revived expectations that the Fed may decide to make additional interest rate hikes even after May. Data from the UK showed that retail sales rose by 0.5% in January, as compared to market expectations for a fall of 0.3%. While this reading was better than the market's 0.3% decline, December's -1% reading was revised lower to -1.2%, preventing Sterling from taking advantage of the data. AUD/USD Reserve Bank of Australia (RBA) Chairman Lowe's comments did not stop the AUDUSD rate from falling. Governor Lowe warned that the RBA was keeping an open mind and their view was that further rate hikes were needed. Lowe also stated that interest rates are not on a predetermined path as it takes 18-24 months for rate hikes to make an impact in the economy. The pair of the Australian is in a downtrend on Friday. AUD/USD has fallen well below 0.69 and is trading below the 0.6820 level. Source: finance.yahoo.com, investing.com

The Japanese yen is down sharply on Friday. In the European session, USD/JPY is trading at 134.93, up 0.73%. The yen fell below 135 earlier today for the first time since December 23. Solid US data sends dollar higher The US dollar is broadly higher and has pummelled the yen, climbing 2.6% this week. Strong US numbers have boosted the dollar, as the Fed is likely to remain hawkish with the economy remaining strong. Retail sales impressed with a 3% gain earlier this week, and PPI and unemployment claims were both better than expected. Consumer inflation ticked lower but was stronger than expected. Is the disinflation process stalled? The economy has proven to be surprisingly resilient to rising interest rates, leading to hopes for a soft landing or even a ‘no landing’. The Fed has been consistent in its message of ‘higher for longer’ with regard to rates, but the markets haven’t really been listening, assuming that the Fed would have to pivot and even cut rates later in the year. The stronger-than-expected releases, from nonfarm payrolls to inflation to retail sales have forced the markets to revise their stance and move closer to the Fed position that the terminal rate will be above 5%. Fed speak remains hawkish Fed member Mester said she saw a strong case for raising rates by 50 basis points at the last Fed meeting, a sign that the Fed could move away from the moderate 25-bp hikes if inflation isn’t falling quickly enough. Mester said that she didn’t see inflation falling to 2% until 2025, which points to a long disinflation process. The depreciation of the yen will be raising eyebrows in Tokyo. The Bank of Japan and the Ministry of Finance have often voiced unease when the yen has plunged and this has led to currency interventions in order to prop up the yen. It’s a delicate time for the Bank of Japan, as Kozo Ueda is set to take over as Governor in April. If the yen continues to lose ground, we’re sure to hear warnings from the BoJ and the Ministry of Finance, possibly with threats of intervention. Read next: Wyoming Prohibits Forced Disclosure Of Private Cryptographic Keys By US State Courts, JP Morgan Projections Of FX Market| FXMAG.COM USD/JPY Technical USD/JPY is testing resistance at 134.47. Above, there is resistance at 136.05 There is support at 1.3355 and 1.3296 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

For the forex market, the most important event was the publication of the US CPI and speeches by representatives of the Fed and the ECB. The Dollar Index (DXY) has seen gains recently thanks to Fed officials, which is somewhat surprising as the markets seemed steady after the Non-Farm Payroll (NFP), CPI and Retail Sales figures. In addition, the Fed's guidance has been largely rejected recently, but as the pressure to maintain tight monetary policy in the US increases, so does its impact on market participants. The Fed's Mester mentioned that "January's CPI figures showed there is still a long way to go in cooling down inflation," again adding to the messages sent by yesterday's speakers giving further support to the dollar. USD/JPY The yen pair started the week trading at a weekly low of 131.5020. Throughout the week, USD/JPY was in an uptrend. The weekly high of USD/JPY was above 135.00 at 135.0840. After that it dropped below 135.00 to 134.1140 where it closed the week. As Federal Reserve officials continued to reiterate their commitment to containing price pressures through tight monetary policy, compelling arguments for another 50 basis-point rate hike at the March FOMC meeting supported the strengthening of the dollar versus the yen. Although Tuesday's appointment of Kazuo Ueda as a possible successor to incumbent BoJ (Bank of Japan) governor Haruhiko Kuroda gave the Japanese yen a slight respite, losses were limited. EUR/USD The euro/dollar pair started trading at 1.0681, and rose for a day and a half to reach a weekly high at 1.0789 on Tuesday. And from this level, the EUR/USD pair was in a downtrend where the pair was heading towards 1.0620. On Friday, in the European session, it approached this level and thus recorded the lowest trading level of the week, and then bounced back and closed the week at a level close to 1.07, 1.0697. ECB Executive Board member Fabio Panetta said on Thursday that the ECB should consider the risks of over-tightening the policy and argued that the bank should not unconditionally pre-commit to future policy moves. Despite the rather dovish comments, money markets priced in a terminal ECB rate of 3.75% for the first time - implying that the ECB still has another 125 bps worth of hikes to come. GBP/USD The Cable pair started the week at 1.2053. And similarly to the EUR/USD pair, the GBP/USD pair remained in a bullish trend until Tuesday's US session. GBP/USD, like EUR/USD, had a weekly high on Tuesday above 1.22 (1.2241), then the pair began its decline. The decline in the pair continued until Friday until GBP/USD reached its lowest trading level (1.1916), after which the cable pair rebounded and ended the week above 1.20 at 1.2044. The UK's Office for National Statistics reported on Friday that Retail Sales increased by 0.5% on a monthly basis in January AUD/USD The AUD/USD trade start was at 0.6916. The movement of the Australian pair was linked to its European counterparts (GBP, EUR). On Tuesday, AUD/USD reached its highest level of the week - 0.7016. In the following days, the pair was falling towards 0.6825, where on Friday below this level, at 0.6814, it reached its lowest level. Towards the end of the trade, AUD/USD rebounded and closed the week at 0.6880. Source: investung.com, finance.yahoo.com

It has been a while since we last looked at USD/JPY as we have been waiting for wave B to develop into a five-wave rally, which now is the case with the test of 135.12 With the five-wave rally now in place and at the same time testing solid resistance at 134.65, we should not expect wave B to move higher and instead set the stage for the next decline in wave C towards at least 121.40 and more likely the equality target between wave A and C at 112.93 before the next impulsive rally should be expected. In the short term, a break below 133.31 will be a strong indication that wave B has been completed and wave C lower is in progress. A break below support at 131.50 will confirm that wave B has been completed and wave C is unfolding   Relevance up to 07:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313287

The dollar fell on Monday but stayed close to Friday's six-week high as a recent wave of positive economic data boosted market expectations for a tightening of the Federal Reserve's monetary policy. USD/JPY The USD/JPY pair started trading at 134.32 and then rose rapidly towards 134.50. The momentum was not extended and the yen fell to 134.00. At the time of writing, USD/JPY is trading slightly above 134.00 at 134.0290. The geopolitical risk intensified over the weekend when North Korea fired ballistic missiles into eastern waters overnight after an intercontinental ballistic missile was launched on Saturday. Saturday's launch landed off Japan's west coast and prompted joint exercises between the US and South Korea as well as the US and Japan. The sister of North Korean leader Kim Jong Un said the use of the Pacific as a "training ground" would depend on the behavior of US forces and warned of the growing presence of US military assets in the region. This comes as rumors swirl of a new Russian offensive in Ukraine and ongoing US-China spy balloon issues. Markets are still awaiting guidance from the new leadership of the Bank of Japan (BoJ), but hopes for a move away from ultra-easy monetary policy may be overly optimistic. EUR/USD European Central Bank (ECB) policymaker Francois Villeroy de Galhau reiterated that inflation in the eurozone is "too fast and probably persistent", while arguing that the ECB needs to be more predictable in its communications and provide a short-term policy outlook. Later in the day the European Commission will release flash consumer confidence index for February, which is expected to slightly improve to -19.0 from -20.9 in January. Poor trading conditions, however, will likely see the pair's shares confined to a narrow channel. The EUR/USD pair started the week at 1.0686 but was falling. After the fall, the EUR/USD pair rose towards 1.07, but failed to maintain momentum and the pair is again around 1.0680. Read next: EY Will Review Darktrace Key Financial And Control Processes| FXMAG.COM GBP/USD After last week's hesitant action, GBP/USD managed to rebound around the mid-1.2000 area early Monday. The cable pair has been falling from above 1.2050 and is currently trading at 1.2025. Sterling could fall if the Bank of England raises interest rates by 25 basis points in March, but signals that this will be the last hike. Some worrisome economic data from the UK dampened additional rate hikes after March, and money markets now appear to favor a break from the May meeting. The widening of the US-UK rate differential has recently weakened sterling, which could get even worse if the BOE formally deems a potential March interest rate hike to be its last, and given the US data still favors a tightening of the rate path interest rates for the Federal Reserve. AUD/USD The AUD/USD pair is based on Friday's good rebound from around 0.6800, the lowest level since January 6, and gaining strong traction on the first day of the new week. The Australian pair was growing towards 0.69. AUD/USD managed to drink through 0.69 and trade above that level. This momentum was interrupted and the pair dropped to 0.6901. Source: investing.com, finance.yahoo.com

USD/JPY spent another day at the support line of the global price channel (133.90), probably to continue the rise towards the target level of 137.65. The Marlin oscillator is not pointing to a reversal, which is a sign of a future slow rise in price. This may be due to the February Manufacturing PMI for Japan that came out this morning and showed a decline from 48.9 to 47.4. On the four-hour (H4) chart, the Marlin oscillator is turning up slowly, but a better sign of growth is a reversal of the oscillator from zero. If that happens, yen will move towards the target level of 137.65   Relevance up to 03:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335619

The dollar was parked below recent peaks on Tuesday, as a three-week rally faded and traders waited on economic data to figure out whether it's warranted to push the dollar up any further. Strong U.S. labour data and sticky inflation have raised U.S. rate expectations and supported the dollar's rally this month - Tuesday's European and U.S. manufacturing data and Friday's core PCE price index will guide the next steps. After an unannounced visit to Kiev, US President Joe Biden will visit Poland on Tuesday. Biden will reportedly talk about strengthening Poland's security by increasing NATO's presence in the country. USD/JPY USD/JPY regains positive traction on Tuesday and maintains its bidding tone throughout the first half of the European session. The pair is gradually approaching the level of 135.00. The yen pair at the time of writing is close to 134.70. The services PMI in Japan turned out to be much better than expected and from the previous reading. The manufacturing PMI was well below expectations, falling month-on-month. On the policy front, the European Central Bank has continued to aggressively tighten policy, despite signs that inflationary pressures may have peaked. The European Central Bank raised interest rates by 50 basis points at its February meeting to the highest level since late 2008, marking another hike of the same magnitude next month and reaffirming its commitment to fighting inflation. Source: investing.com EUR/USD The euro stayed below USD 1.07, oscillating around the weakest level since January 6. In the eurozone and Germany, the manufacturing PMIs turned out to be weak, below expected levels. Services PMI rose. And also ZEW economic sentiment showed an improvement in sentiment. Source: investing.com Read next: Baltic Pipe Is Alternative Energy Source For Poland| FXMAG.COM GBP/USD The data on public finances in the UK released this morning exceeded estimates. The pound strengthened on Tuesday after data showed an unexpected rebound in UK business activity, suggesting the economy could avoid a deep recession. The pound managed to break through 1.2100 and is currently trading just above. UK data showed private sector business activity surged in early February with the Composite PMI rising to 53 from 48.5, providing a boost to sterling. As the UK private sector is resilient to strong inflation, the Bank of England is likely to continue to raise its key rate without worrying about a deep recession. British Foreign Secretary James Cleverly said late Monday evening that they would hold further talks with the EU over the Northern Ireland Protocol in the coming days. Cleverly is also reportedly planning to address Tory MPs on Wednesday to give an update on the negotiations. Source: investing.com AUD/USD The minutes of the RBA meeting revealed most of what was already known to the market. The outlook for the Australian economy has many positive aspects, but a potential concern is that the CPI outperforms both PPI and wage inflation. The year-on-year CPI by the end of 2023 was 7.8%, and the PPI in the same period was 5.8%. Tomorrow the Australian Bureau of Statistics (ABS) will release the Wage Price Index. The AUD/USD pair came under renewed selling pressure on Tuesday and reversed much of the positive move from the previous day. The pair remains below the 0.6900 level for the first half of the European session. The Aussie pair is above 0.6880. Source: investing.com, finance.yahoo.com

The dollar rose slightly on Wednesday, continuing to trade near six-week highs on the back of strong economic data. Survey data released on Tuesday showed U.S. business activity unexpectedly rebounded in February to reach its highest in eight months. In the euro zone, a survey-based gauge of activity also surged, hitting a nine-month high. Investors' focus now turns to the release of the minutes from the Fed's latest meeting later on Wednesday, which could offer more insight into policymakers' plans. USD/JPY One pair is moving in a sine wave pattern today. In the first hours of trading, USD/JPY dropped to around 134.60 and then rose to around 1134.95. This move has been repeated once again, and USD/JPY is now heading down towards 134.65. Bond purchases and BOJ loans dominate the headlines in Japan. The Japanese yen found some support against the US dollar on Wednesday morning, while the Bank of Japan (BOJ) had to buy 10-year government bonds due to the yield breaking the upper limit set by the BoJ (0.5%) of their policy range. It was the second consecutive trading session during which this took place. BOJ's Tamura gave mixed messages, stating that loose monetary policy is now required, but future policy changes will be crucial at some point in the future. EUR/USD The movement of the EUR/USD pair in Asian Russia and at the beginning of the European traded in the range of 1.6550-1.6650. In the European session, the pair fell and is currently trading around 1.6300. Yesterday's data from the euro zone showed further improvement, with flash PMI beating estimates in the services sector, while production fell slightly. The Zew Sentiment Survey reflected an improvement in sentiment and optimism, with expectations and current conditions outperforming estimates in both the Eurozone and Germany. This morning brought German inflation data for January up from December, confirming comments from ECB President Christine Lagarde about a 50 basis point hike at the upcoming meeting Read next: Sweden And Finland Are Getting Closer To Becoming NATO Members| FXMAG.COM GBP/USD The cable pair in the Asian session kept its momentum above 1.21. The European session is not favorable for the gunt pair and the pair is below 1.21. At the time of writing, GBP/USD was trading at 1.2090. Sterling pulled back on Wednesday after rising sharply on stronger-than-expected British business activity as traders awaited consumer confidence data and focused on Britain's political headaches. The latest UK PMIs beat forecasts and showed business activity in the UK, especially in the services sector, picking up sharply in February. The latest data suggest that the UK economy may be improving, giving the Bank of England more wiggle room to increase interest rates. UK inflation is on the way down, but at a current level of 10.1% is sharply higher than the Bank of England’s (BoE) mandate of around 2%. Inflation is expected to fall quickly over the coming months, according to the BoE, as energy prices and the cost of imported goods fall. AUD/USD The AUD/USD pair adds to the significant losses from the previous day and remains under selling pressure for the second day in a row on Wednesday. The Aussie Pair is holding below 0.69. At the beginning of the day, AUD/USD started to fall to the level of 0.6830 and in the Asian session kept trading in the range of 0.6830-0.6840. In the first hours of trading in the European session, the Australian pair fell below 0.6820, but managed to rebound and at the time of writing was just above 0.6830. Source: finance.yahoo.com, investing.com

Yesterday, the yen did not react much to the general strengthening trend of the US dollar - the USD/JPY pair even fell by 10 points. Today is a national holiday in Japan, and the general uptrend, which was confirmed on Tuesday, may not be supported either. The signal line of the Marlin oscillator is decreasing on the daily chart, so there is a probability of a retest of support of the blue channel price line (133.82) before further growth to the upper line of the price channel to 137.70. On the four-hour chart, the price remains in the ascending position above both indicator lines. The risk of a corrective decline is created by the Marlin oscillator, which has been moving along the zero line since the 20th and is not growing. The MACD line (134.38) is an obstacle to the deep correction, which coincides with yesterday's low. If the support remains unbroken, the pair's slow rise will continue.   Relevance up to 04:00 2023-02-24 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335868

USD/JPY fades bounce off intraday low, prints mild losses to snap four-day uptrend. Treasury bond yields remain lackluster on Japan holiday. Retreat in US inflation expectations joins mixed geopolitical, Fed headlines to probe momentum traders. USD/JPY retreats to 134.80 as bears appear determined to retake control, after a four-day absence, during early Thursday. Even so, Japan’s holiday and hawkish Fed concerns join geopolitical fears to challenge the downside momentum. As a result, the yen pair prints mild losses during the first downbeat day in five. Starting with the Yen positive headlines, the retreat in the US Treasury bond yields and inflation expectations, per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED), seem to exert downside pressure on the USD/JPY price. On the same line are the receding fears of nuclear war as US President Joe Biden thinks that his Russian counterpart isn’t up to using nuclear arms by backing off an international treaty. Furthermore, hawkish concerns surrounding the Bank of Japan (BoJ), due to the nearness to the end of Governor Haruhiko Kuroda’s term, also weigh on the USD/JPY pair. Alternatively, Fed policymakers are all in for further rate lifts, per the latest Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes, which in turn propels the US Dollar demand. Further, the fears surrounding the Ukraine-Russia war are far from over, with the latest edition of the West and China escalating the matter to the worse. Amid these plays, S&P 500 Futures bounced off the monthly low to print mild gains around 4,010 whereas the Treasury bond yields remain sidelined amid off in Japan. That said, the US Dollar Index (DXY) drops 0.20% to 104.35 by the press time. Looking ahead, a lack of major data/events could restrict USD/JPY moves but central bankers’ speeches can entertain the pair traders ahead of Friday’s US Core Personal Consumption Expenditures (PCE) Price Index data, the Fed’s favorite inflation gauge. Also important to watch will be the geopolitical headlines surrounding Russia, China and the US. Technical analysis Wednesday’s Doji candlestick joins overbought RSI on the daily chart to challenge USD/JPY bulls.

The dollar held shy of multi-week peaks against other major currencies on Thursday, a day after minutes from the Federal Reserve's last policy meeting supported, but did not add to markets' view the central bank will raise rates further. Minutes from the Federal Reserve meeting released last night confirmed the hawkish rhetoric of Fed officials over the past two weeks. The key takeaway, of course, is that the Fed is committed to keeping interest rates higher for longer to bring inflation down to the 2% target. The impact of the protocol was somewhat dampened as the meeting was preceded by a series of metrics released in February, most notably employment figures, which showed the US economy was doing well, leaving more room for the Fed to raise interest rates to bring down inflation. Markets will be focused on US GDP as well as the accompanying labor market data in the form of jobless claims. US GDP is expected to come in marginally weaker than the previous. USD/JPY USD/JPY struggles to gain any significant traction on Thursday and trades in a tight band just below the psychological 135.00 mark for the first half of the European session. The yen pair started the day above 134.90, in the Asian session USD/JPY fell towards 134.70. In the European session, USD/JPY increased and is now just below 135.00. In addition, the USD/JPY pair is also weighed down by hawkish concerns around the Bank of Japan (BoJ), due to the imminent end of the term of governor Haruhiko Kuroda. Alternatively, Fed policymakers are poised for further interest rate hikes, according to the latest Federal Open Market Committee (FOMC) meeting minutes, which in turn is fueling demand for the US dollar. EUR/USD EUR/USD in the Asian session was above 1.06, and the pair traded close to the 1.0630 level. In the Asian session, EUR/USD fell below 1.06. This morning brought data on inflation in the euro zone for January, in which annual inflation fell to 8.6% in the euro zone and to 10.0% in the EU. In January, food, alcohol and tobacco accounted for the largest contributors to the euro area's annual inflation rate, followed by energy, services and non-energy industrial goods, according to data released by Eurostat. In addition, EU members will hold further talks on a new package of sanctions against Russia after failing to reach an agreement on Wednesday. According to Reuters, the proposed package includes trade restrictions worth more than €10 billion. Russia is reportedly planning to cut oil production in response to Western sanctions. The heightened risk of rising energy prices, which will contribute to stronger inflation in the eurozone, could help the euro hold its position in the short term, as such a situation would force the European Central Bank (ECB) to raise interest rates further after March. Read next: Tesla Opens Its Global Engineering Headquarters In Palo Alto, California| FXMAG.COM GBP/USD The cable pair in the Asian session was rising towards 1.2070, but in the European session it lost momentum and fell to the level of 1.2020. Currently, GBP/USD is at 1.2022. GBP/USD extended its decline towards 1.2000 early Thursday after reversing much of the PMI-driven gains on Wednesday. Markets will be keeping a close eye on US stocks and Brexit developments for the remainder of the day. AUD/USD The AUD/USD pair was rising towards 0.6840 in the first hours of trading. Then the pair of the Australian fell and rebounded again. In the European session the Aussie Pair traded below 0.6820, currently the AUD/USD pair is trading above 0.6820. Australian capital expenditure data beat estimates across the board (reaching its highest level since Q4 2021) showing optimism in these sectors. Source: investing.com, finance.yahoo.com

USD/JPY is showing a volatility squeeze after some wild moves post-speech from BoJ Governor Nominee Kazuo Ueda. Bank of Japan Ueda considered the current monetary policy as appropriate for achieving the persistent 2% inflation target. Federal Reserve to continue policy tightening spell as upbeat US labor market could propel inflation ahead. USD/JPY is auctioning in a Rising Wedge which indicates a loss in the upside momentum and cements a bearish reversal. USD/JPY remained in vigorous action in the Asian session as Bank of Japan (BoJ) Governor Nominee Kazuo Ueda delivered his first speech after his selection. The asset displayed wild gyrations in the 70-pips range and returned to its mean. The major has turned sideways as a volatility expansion is generally followed by a contraction in the same. At the time of writing, the pair is demonstrating a back-and-forth action around 134.70 and is expected to continue to remain sideways till the release of the United States Personal Consumption Expenditure (PCE) Price Index for fresh impetus. The US Dollar Index (DXY) is struggling to find a decisive move as investors have shifted to the sidelines ahead of the US PCE data. S&P500 futures have turned volatile amid dubious gestures from the Chinese government toward the ongoing Russia-Ukraine war. The war situation between Russia and Ukraine has entered in the second year and the street is expecting some bold moves from Russia, which could accelerate geopolitical tensions further. Earlier, the United States and Germany warned Beijing not to deliver weapons to Russia, as reported by DER SPIEGEL. The warning from the US and Germany came after the headlines of negotiations between China and Russia for the purchase of 100 strike drones by Moscow. Bank of Japan Ueda cites current monetary policy as appropriate The street was keenly awaiting the speech from BoJ Ueda as the Japanese administration promised that the government will consider an exit from the decade-long expansionary monetary policy with the novel Bank of Japan’s leadership. Bank of Japan Ueda cleared that the decade-high inflation is backed by higher import prices and has nothing to do with the domestic demand and labor cost index, which are extremely weak. Bank of Japan Ueda cited the current policy easing as appropriate to achieve pre-pandemic growth levels. Apart from that, the Bank of Japan Ueda cited that the central bank will look for normalization of the stimulant monetary policy after confidently achieving the 2% inflation target. The BoJ Kuroda successor refrained from discussing specifics of the Yield Conversion Control (YCC) for now. Investors should be aware that the Bank of Japan stretched the YCC on the Japanese Government Bonds (JGBs) to 0.5% from above and below zero in its December monetary policy. Context of a pause in Federal Reserve’s policy tightening spell looks over After a quarter of sheer inflation softening in the United States, the street started anticipating that the Federal Reserve (Fed) would pause the rate hike cycle for a while and would allow the current monetary policy to tame the stubborn inflation. However, the US inflation turned out to be extremely persistent and started showing its true colors. The US Consumer Price Index (CPI) looks set to rebound after a declining spell led by the tight labor market and a solid revival in consumer spending. The upbeat labor market is characterized by declining jobless claims, multi-decade lowest Unemployment Rate, and rising demand for fresh talent if we sideline some lay-off announcements by giant techies. USD/JPY technical outlook USD/JPY is auctioning in a Rising Wedge chart pattern that indicates a loss in the upside momentum on an hourly scale. The aforementioned chart pattern results in a bearish reversal after a breakdown. The asset is struggling to reclaim an auction above the 50-period Exponential Moving Average (EMA) at 134.75. Meanwhile, the Relative Strength Index has surrendered oscillation in the bullish range of 60.00-80.00. A confident break into the bearish range of 20.00-40.00 will result in activation of the downside momentum.

US data and Fed commentary is keeping the dollar bid. At the same time, geopolitics and reports that China is preparing to increase its support for Russia are also seeing an unwind of 2023 global recovery trades. February and March are seasonally strong months for the dollar and 4.50% overnight deposit rates can keep the dollar supported a little longer  Incoming Bank of Japan Governor Kazuo Ueda USD: Dollar strength is not just a Fed story It has been quite surprising to see USD/CNH move back above the 6.90 area and also see USD/KRW stay bid above 1300. The 2023 narrative was meant to be about US disinflation, China re-opening and $/Asia playing a major part in the broad dollar decline. That has not been the case. Away from the US disinflation/Fed story, the rally in USD/Asia and USD/CNH may also be down to a re-appraisal that: a) Asian trade surpluses may be harder to come by given the slowdown in Europe and the US, plus b) geopolitics creeping into investment decisions. For example, reports overnight suggest that China may be preparing to up its support for Russia consistent with recent briefings out of Washington. The fear of an escalation in US sanctions may be prompting investors to re-appraise some of their investment holdings along geo-political lines.  This comes at a time of the year when the dollar is seasonally strong (February and March) and the bar to put money to work outside of 4.50% yielding overnight dollar deposits is not particularly low. Away from geopolitics, yesterday's US fourth quarter GDP revision saw the core deflator revised up to 4.3% annualised, from the 3.9% originally reported, and today should see the January core PCE deflator at a sticky 0.4% month-on-month. In other words, the US disinflation/bearish dollar narrative will find little from today's data. DXY looks like it can continue to press 105.00 and should USD/CNH trade back up to 7.00 on geopolitics, we could be looking at 105.60/106.00 on DXY.  Chris Turner EUR: Eurozone core inflation strikes new high Yesterday's revisions to eurozone January inflation saw core inflation revised to a new cycle high of 5.3% year-on-year. No wonder ECB officials such as Isabel Schnabel are keen to dispel any ideas that the disinflation process has started. And a core view slowly permeating through the market is that the ECB has perhaps another 100bp+ of tightening to do, but crucially will be leaving rates at those high levels throughout a large chunk of 2024. This should be a key factor in keeping EUR/USD supported on a multi-quarter view.  The eurozone calendar is light today, but given the dollar bid on the back of US data/geopolitics, the EUR/USD bias looks to a press of 1.0575 support and a potential move to 1.0500. Chris Turner GBP: A good week for UK data Following on from Tuesday's strong PMI release, the UK outlook has received another boost today in the form of a big jump in GFK consumer confidence. This has now returned to levels not seen since last April. At the margin, this will make the Bank of England's life harder as it seeks to cool aggregate demand to soften inflation. Markets are now quite comfortable in pricing the BoE's Bank Rate at 4.50% at the end of this year – pricing 25bp hikes in March and May. Slightly better growth prospects, sticky inflation and some further monetary tightening are the story across the US, the eurozone and the UK at the moment – suggesting bilateral FX rates do not need to move too much. This has seen three-month GBP/USD implied volatility drift under 10% and would tend to favour more modest moves in the spot. We think support levels at 1.1850/1950 may hold over the next couple of weeks. BoE dove Silvana Tenreyro speaks at 1730CET today. Chris Turner JPY: Few bombshells from BoJ Governor nominee The Japanese yen event risk has been overcome today in the form of testimony from the nominee Bank of Japan (BoJ) Governor Kazuo Ueda. The yen and Japanese government bond (JGB) yields moved little on his remarks that a dovish policy setting was still appropriate, but that normalisation would be needed were the BoJ to conclude that inflation had achieved 2% on a stable basis. The forward market for 10-year JGB yields does, however, price a further widening of the 10-year JGB band (+/- 50bp around zero) within the next three months. And the FX options market prices volatility around the key BoJ monetary policy dates of 10 March and 28 April. Our view is that this corrective dollar bounce could carry USD/JPY up to the 136/137 area over the next couple of weeks. But assuming that we are correct with the US disinflation story dominating again in the second quarter, USD/JPY should be back towards 125/126 into the summer. Chris Turner Read this article on THINK TagsYen FX Dollar Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Central bank watchers knew it would be a surprise if BOJ governor nominee Kazuo Ueda gave any substantial hints about how he will consider policy normalization.  Ueda reiterated that the BOJ’s current policy is appropriate. He noted that “Japan’s trend inflation is likely to rise gradually. But it will take some time for inflation to sustainably and stably achieve the BOJ’s 2% target. FX traders were not surprised that Ueda did not signal he was in a rush to tweak Yield Curve Control (YCC). Ueda has not made a decision at a policy meeting since 2005, so he will likely refrain from providing any hints that lock him into any monetary policy stances. The Japanese yen has rallied quite a bit on expectations that Governor Kuroda’s replacement would likely be quicker in abandoning YCC and eventually ending negative rates. Every BOJ watcher read Ueda’s opinion piece that said the BOJ must consider an exit strategy from its ultra-loose monetary policy and review its extraordinary stimulus.  Traders are now realizing that Ueda is unlikely to provide any tightening of monetary policy signs anytime soon, especially before a policy review. The yen won’t be rallying on tightening bets ahead of Kuroda’s last dance (March 10th meeting) and with incoming Governor Ueda’s first policy meeting in April. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

US stocks had a wobbling trading session yesterday. US equities gained, then lost, then rebounded to close the session in the green. Nvidia The 14% jump in Nvidia certainly helped improve the overall market mood, whereas the US economic data was mixed and was not supposed to pour water on the equity bears or improve sentiment regarding the Federal Reserve (Fed) hawks.  US economy The latest GDP update from the US revealed that the US economy expanded slower than expected, while prices rose faster-than-expected. We have one more important data point to watch before the week ends… and that’s the US PCE index, the Fed’s favourite gauge of inflation. Given the previous inflation data, we know that inflation has certainly eased, but not as much as expected. Eurozone Across the Atlantic Ocean, the European stocks gained and the euro fell on Thursday, even though the latest inflation data from the eurozone revealed that the core inflation advanced to a record high. Japan While the data released this morning showed that inflation in Japan rose to 4.3%, a 41-year high, and gave a rapid boost to the yen, sending the USDJPY down to the 134 mark. Watch the full episode to find out more! 0:00 Intro 0:35 Mixed reaction to mixed data 3:55 Watch US PCE index today! 5:40 European stocks up, euro down after record core CPI. Why?! 7:38 Japanese inflation hits 41-year high 8:25 Turkey cuts rate despite inflation threat Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #EUR #JPY #GDP #inflation #data #Turkey #rate #decision #TRY #EuroStoxx #DAX #BIST #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH

The release of data on Japan's inflation increase and Kazuo Ueda's speech, the new president of the Japanese Central Bank, caused the dollar-yen pair to fall below the base of the 134th figure during Friday's Asian trading session. Ueda's controversial messages Despite the southern momentum, Ueda's inconsistent statements prevented the USD/JPY bears from building on their profits. On the one hand, he asserted that the monetary policy's existing parameters "remain reasonable" and commendable. Ueda did, however, maintain the flexibility for adjustment should inflation continue to show upward dynamics. Such contradictory signals stopped the downward momentum, and the USD/JPY pair thereafter moved back to the 135th figure's margins. Nevertheless, notwithstanding the sellers of the pair's ambiguity, it can be assumed that the Bank of Japan will continue to support the yen over the long term. It is clear that Ueda wants to keep things the same, but his rhetorical style also suggests that he may be open to change in the future. Speaking before the Japanese parliament, Kazuo Ueda asserted that rising import costs for raw materials, rather than strong consumer demand, are mostly to blame for the country's inflationary acceleration. He also stated that the future of the national economy is "very uncertain." One of Ueda's words worked in the yen's favor. According to him, the Central Bank may think about normalizing monetary policy if trend inflation "substantially increases" and the Bank of Japan target can be achieved over the long term. One way to read the expressed phrase is as a warning to the markets to be wary. Nonetheless, Ueda argued that the Central Bank should take its time making the right decisions and that, for the time being, it "should maintain ultra-low interest rates to support a fragile economy." In other words, Kazuo Ueda made it apparent that he currently does not disagree with the course of action taken by the Bank of Japan's current governor. If adjustments are needed in the future, they will be made gradually, consistently, and smoothly; there won't be any sudden 180-degree turns. It should be highlighted that Kazuo Ueda still retains the option of normalizing the monetary policy's settings, in contrast to Kuroda. This is a crucial aspect that will come up later (likely in the second half of the year), especially if Japan's inflation rate gains momentum. The current state of affairs is consistent with this scenario, at least as far as Japanese inflation is concerned, as today's announcement eloquently attests. Report on Japan's rising inflation The scenario is as follows. The consumer price index as a whole increased by 4.3% in January, which is the fastest pace of growth since December 1981. The 40-year record was also updated by the core CPI, which includes energy prices but excludes fresh food. Excluding food and energy costs, the consumer price index increased by 3.2% from the previous year in October. Nearly every aspect of the aforementioned report performed better than expected in the green zone. It is important to note that for the past ten months, inflation has been higher than the Bank of Japan's target rate of two percent. According to the release's structure, prices for food, clothing, furniture, and household products all increased in Japan last month, while prices for medical care, education, and transportation services decreased. The price of utilities increased by 15% all at once, with gas and electricity rising by 20% and roughly 25%, respectively. It is important to note that several major Japanese organizations and businesses have recently started actively raising pay in light of the recently released inflation report. Particularly industry giants like Toyota and Honda. The day before yesterday, representatives of Toyota said that the firm will abide by the union's requests regarding pay and bonuses: wages would increase "at the fastest pace in the last two decades." Honda, a manufacturer of cars, followed suit and declared that it will adhere to all pertinent union obligations. The business announced the biggest pay boost since 1990, a 5% compensation increase. Conclusions The inflation report remained obscured by Kazuo Ueda's conflicting signals. Certainly, Japan's inflation is still on the rise, but Haruhiko Kuroda's replacement made it plain that he would not "jump into war" right once after assuming office (i.e. in early April). At the same time, he acknowledged that the Japanese regulator might need to change its normalization strategy, but it is still too early to discuss this in detail. This stance exerted pressure on the yen, which struggled to maintain its position when paired with the dollar. I believe that the USD/JPY pair will soon follow the dollar, which is anticipating the most significant inflation report regarding the expansion of the underlying PCE index (to be published at the start of the American session on Friday). Making trading decisions on the pair after its publication is thus advised. The key price target in this situation will be 136.50, which corresponds to the upper line of the Bollinger Bands indicator and the upper limit of the Kumo cloud on the D1 timeframe.   Relevance up to 09:00 2023-02-25 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336024

The dollar index rose to seven-week highs on Friday as investors braced for an extended hold on higher US interest rates after a series of strong economic data in the US. Investors await data on the US Personal Consumer Expenditure (PCE) Price Index. The annual core PCE price index, the Fed's preferred measure of inflation, is projected to fall to 4.3% in January from 4.4% in December. The core consumer price index (CPI) fell to 5.6% y/y in January from 5.7% in December. A modest fall in core PCE inflation should not come as a big surprise at this point. The PCE Core Price Index is expected to increase by 0.4% m/m. In the event that the monthly value exceeds the market consensus, the US dollar may gain strength. It is worth noting, however, that markets are already fully pricing in two more Fed rate hikes of 25 basis points in March and May. USD/JPY USD/JPY started the day with a decline towards 134.20. Then the yen pair moved upwards. USD/JPY hit 135.00 and is now trading at 135.3850 The Japanese yen may fall further after the new governor of the Bank of Japan, Kazuo Ueda, signaled that very loose monetary policy should be maintained. Ueda's comments after his approval in the lower house of Japan's parliament did not produce any clear hawkish signal that could fuel a resurgence of speculative demand for the yen in the near term. EUR/USD EUR/USD traded above 1.06 in the Asian session, mostly in the 1.0605-1.0610 range. In the European session, the EUR/USD pair lost momentum and returned to levels below 1.06. Currently, the pair is trading just below 1.06 at 1.0580. The euro started the European session weaker after worse than expected data on German GDP. GDP data showed that the German economy contracted (-0.4%) in the fourth quarter of 2022 and brought recession talk back. Moreover, a weaker-than-expected rise in monthly core PCE inflation could trigger a USD correction and help the EUR/USD rebound ahead of the weekend. Read next: Visa Success At The Expense Of Small Businesses| FXMAG.COM GBP/USD The cable pair in the Asian session and in the beginning of the European session traded around 1.2020. The GBP/USD pair lost momentum and fell below 1.20, at 1.1987. British consumers have become more optimistic about their personal finances and economic outlook, but their sentiment is much lower than it was before the COVID-19 pandemic, research firm GfK said on Friday. Improved consumer sentiment does not always translate to improved spending, as evidenced by the flat retail sales reading for February from the Confederation of British Industry on Thursday. However, energy prices are finally backing down from last year's highs and the UK economy is not looking as bad as expected just a few weeks ago, according to this week's Purchasing Management Index (PMI) business activity survey that showed an unexpected rebound in early February. AUD/USD The pair of the Australian in the Asian session stayed above 0.6819, but with the start of the European session it began to fall below 0.68. Currently the Aussie Pair is trading below 0.6870 The Australian yen gained in value after the alleged head of Japan's central bank maintained the status quo on monetary policy and was apparently in no rush to end its massive stimulus programme.. Source: investing.com, finance.yahoo.com

The Japanese yen is slightly weaker on Friday. In the European session, USD/JPY is trading just above the 135 line. Ueda pledges to continue easy policy Incoming Bank of Japan Governor Kazuo Ueda appeared at a parliamentary hearing on Friday and the markets were all ears. The buzz-word from Ueda was ‘continuity’, which really wasn’t a surprise. Ueda has already said that the current policy is appropriate and he maintained this stance at the hearing. Ueda said that ultra-low rates are needed while the economy is fragile and ruled out fighting inflation by tightening policy. With inflation running at 4%, above the BoJ’s target of 2%, there is pressure on Ueda to abandon or at least adjust the Bank’s yield control policy (YCC), which is being criticised for distorting market functions. Ueda treated this hot potato with caution. He acknowledged that the YCC had caused side effects but said that the BoJ should evaluate whether recent steps such as widening the band around the yield target would ease these problems. The takeaway from Ueda’s testimony is that he is in no hurry to shift central bank policy. Still, there is strong pressure on Ueda to address YCC, which is damaging the bond markets. Investors should not discount the possibility that Governor Kuroda could widen the target yield band at the March meeting in order to relieve pressure on Ueda. If Kuroda doesn’t act, the bond markets could respond with massive selling before Ueda takes the helm of the BoJ in April. The inflation pressures facing the BOJ were underscored by National Core CPI for January, which rose from 4.0% to 4.2%. This was just shy of the 4.3% estimate, but still the highest reading since 1981. The BoJ has insisted that inflation is temporary (remember that line from the ECB and the Fed?), and is hoping that the government’s massive stimulus package, which includes subsidies for electricity, will help bring down inflation.  Read next: Visa Success At The Expense Of Small Businesses| FXMAG.COM USD/JPY Technical USD/JPY is testing resistance at 134.85. Above, there is resistance at 135.75 1.3350 and 131.90 are providing support This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  Source: Yen edges lower after BoJ's Ueda testimony - MarketPulseMarketPulse

The dollar climbed to seven-week peaks on Friday, after data showed U.S. inflation accelerated while consumer spending rebounded last month, reinforcing expectations that the Federal Reserve may need to hike interest rates a few more times this year to curb the surge in prices. On Friday, the core PCE index in the US amounted to 4.7% y/y at the end of January against expected 4.3% and 4.6% earlier. USD/JPY USD/JPY started the week at 134.1140. The weekly trend of the yen pair was up as the dollar was supported by strong data from the US economy and no support came from Japan. By Wednesday, USD/JPY was trading around 134.75. The first break above 135.00 was on Thursday but the momentum did not hold, USD/JPY rose again on Friday and passed 136.00 and recorded the highest trading level of the week at 136.4960. USD/JPY closed the week at 136.4060 The Japanese yen weakened past 135 per USD, dropping to its lowest level in over two months after incoming BoJ Governor Ueda stated the central bank must maintain its ultra-low policy stance for the time being. The official also discarded immediate changes to the bank’s yield curve control, supporting bond prices worldwide. The dovish policy is set to stay despite the steady increase in Japanese consumer prices. Headline inflation jumped to 4.3 percent in February EUR/USD It was a difficult week for the EUR/USD pair. The euro pair managed to fall below 1.05 this week. The euro pair started the week at 1.0683 and then fell. Weekly high above 1.07 (1.0705). The trend was down and the lowest level was reached by the EUR/USD pair at 1.0540. The week will close at 1.0547. S&P Global's Composite Purchasing Managers Index for the currency bloc hit a seven-month high of 50.3 in January. That was above both December's 49.3 and the flash reading of 50.2. For the first time in seven months, the number was above the key figure of 50 that separates expansion from recession. The data came after better official Eurostat data from the beginning of the week. They showed that the eurozone economy grew by 0.1% in the last quarter of 2022, beating expectations for a decline of 0.1%. GBP/USD For the cable pair, the week was mixed. GBP/USD started trading for the week at 1.2043, closing the week was much lower at 1.1942. The best day for the cable pair was Tuesday as the pair received support from the UK economy (positive PMI readings) and GBP/USD traded above 1.21, which was the week's high (1.2141). Trading lows occurred at the end of the week, with the all-time low at 1.1935. The British pound fell below $1.20, hovering around its lowest level since January 5, as data pointing to a still-tight US labor market and sticky US inflation fueled expectations that the Federal Reserve would keep interest rates higher for longer. At the same time, the Bank of England will raise the interest rate by another 25 basis points to 4.25% next month to combat double-digit inflation before the end of the current tightening cycle. AUD/USD The Aussie pair started trading at the 0.6869 level and on the first day rose above the 0.69 level. Above 0.69, the AUD/USD pair reached a weekly high of 0.6922. The Australian couple did not enjoy an increase for long and in the following days it decreased. Similar to European counterparts, AUD/USD reached its lowest level on Friday. The weekly low was at 0.6721. The Aussie Pair ended the week trading at 0.6727. Source: finance.yahoo.com

On Friday, the yen showed its intention to break through the 137.70 target. Overcoming the resistance of this embedded price channel line will allow the pair to try and hit 138.90, 140.90 as well as other target levels. However, this brilliant plan is hindered by the Marlin oscillator, which is very reluctant to continue rising on the daily chart. The prospect of its growth is great, but the potential for a reversal to the downside is also great. It is very likely that before the price climbs above 137.70, the correctional decline to 133.90 will follow. On the four-hour chart, so far, the situation supports the growth scenario - the price is above the indicator lines, and after the reversal from the MACD line, the Marlin oscillator is in a position to rise. We're waiting for the completion of the growing branch of the 133.90-137.70 range.     Relevance up to 03:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336119

BoJ Ueda sees the current monetary policy as appropriate to achieve the 2% inflation target confidently. USD/JPY has delivered a breakout of the Inverted H&S pattern that conveys a bullish reversal. An oscillating in the bullish range of 60.00-80.00 by the RSI (14) indicates more upside ahead. The USD/JPY pair is struggling to extend recovery above the immediate resistance of 136.40 in the early European session. The asset has turned sideways as investors are awaiting the release of the United States Durable Goods Orders data for fresh cues. The US Dollar Index (DXY) has faced barricades around 104.90 but is expected to continue its upside to near the 105.00 resistance as investors’ risk appetite has faded dramatically. Meanwhile, dovish commentary from Bank of Japan (BoJ) Governor Nominee Kazuo Ueda is impacting the Japanese Yen. BoJ Ueda sees the current monetary policy as appropriate to achieve the 2% inflation target confidently. USD/JPY has delivered a breakout of the Inverted Head and Shoulder chart pattern on a four-hour scale that conveys a bullish reversal after a prolonged consolidation. The impulse of the asset has turned bullish after a confident break above the horizontal resistance plotted from December 28 high at 134.50. The US Dollar bulls are getting strength from the 50-period Exponential Moving Average (EMA) at 134.60. An oscillating in the bullish range of 60.00-80.00 by the Relative Strength Index (RSI) (14) indicates a continuation of the upside. Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM Should the asset break above the intraday high at 136.56, US Dollar bulls will drive the asset toward December 12 high at 137.48 followed by the horizontal resistance placed from December 15 high at 138.18. Alternatively, a confident break below February 16 low at 133.60 will negate the Inverted H&S formation and will drag the asset toward February 6 high around 133.00 and February 10 high at 131.65. USD/JPY four-hour chart  

When we started 2023 most of the narrative had been centred around when we would see start to see a Fed pivot and the timing of the first rate cut. Once it became apparent that this was somewhat wishful thinking, this narrative started to shift towards a Fed pause, even in the face of mounting evidence of a remarkably resilient US economy.     Even when the Fed downshifted the pace of its current rate hiking cycle to 25bps at the start of February, there was some disquiet that they might be sending the wrong signal to the market, about their determination to crack down on inflation.   The resilience of the January payrolls report which came in ahead of expectations at the beginning of this month started to sow the first seeds of doubt into the pause narrative, and while bond markets started to react to these shifting sands, the equity markets still held out the hope that a Fed pause was only a few weeks away. On Friday all notion of a possible pause appears to have gone the way of the dodo, in the face of a series of better-than-expected economic data releases, with markets now pricing in another three 25bps rate increases at the March, May, and June Fed meetings.   There had already been signs that the January core PCE numbers might have been susceptible to an upside surprise after retail sales in January surged by 3%, however, Friday's sharp jump in the Federal Reserve's preferred inflation measure to 4.7%, was as unwelcome as was the upward revision to December's number from 4.4% to 4.6%. Throw in the biggest upswing in personal spending in 12 months, by 1.8%, and you have all the ingredients of a US economy that shows few signs that higher prices are weighing on demand.   US 2-year yields reacted accordingly, jumping by 11bps, above their previous peaks in November last year, to close at their highest level since 2007, at 4.813%. It wasn't just yields in the US that moved sharply higher, with German 2-year yields rising to their highest levels since October 2008, closing above 3% Equity markets reacted as you would expect, falling back sharply, with the DAX posting its biggest weekly fall since mid-December. The FTSE100 also rolled over quite sharply wiping out the previous week's gains in the process, although both indexes remain in their uptrends from their October lows.     The S&P500 fell sharply but managed to hold above and rebound off its 200-day SMA, even as it fell to a one-month low, with the Nasdaq 100 also rebounding off its 200-day SMA as well.   This recovery off key technical supports should offer European markets a modest rebound when they open later this morning, after last week's sharp falls. As we look towards a new week, and the end of the month tomorrow, last week's falls have called into question whether markets in Europe can hold onto their February gains, while US markets have already slipped into negative territory for the month, after last week's sharp falls.   The US dollar appears to have accelerated its upward momentum, rising for the fourth week in a row, and is in sight of its highest levels this year, and on course to post its first positive month since September last year.   On the data front the main focus this week, in the absence of the February jobs report which has been pushed out to the 10th of March, is the latest ISM services report which is due at the end of this week and could be instrumental in reinforcing the hawkish narrative that has started to take hold in the last few weeks. A similarly strong report following on from the January report will further reinforce the case for 3 more 25bps rate hikes at the next few meetings.   In Europe, the narrative around sticky inflation appears to be evolving along similar lines, with rapid declines in headline inflation but core inflation continuing to edge to record highs.   This week we'll get to see the latest flash numbers for February, from Germany, whose economy could already be in recession, France as well as the EU, where core prices hit a record high of 5.3% in January and could well stay there in numbers due to be released towards the end of the week.     EUR/USD – the next support lies at the January lows at 1.0480/85, a break of which opens up the prospect of a test of the 200-day SMA at 1.0320. Currently have resistance at the 1.0620/30 area, and behind that at the 50-day SMA. GBP/USD – currently sitting on support at the 200-day SMA at 1.1930, a break of which retargets the 1.1830 area. Resistance currently at the 50-day SMA at 1.2150. EUR/GBP – continues to edge higher with the next resistance currently 0.8870. Support comes in at the 0.8780 area. USD/JPY – closing in on the 200-day SMA and Kumo cloud resistance area at 136.90/00. Interim support at 133.60, and below that at 132.60, and 50-day SMA.   FTSE100 is expected to open 32 points higher at 7,910. DAX is expected to open 48 points higher at 15,457 CAC40 is expected to open at 35 points higher 7,222   Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC

The dollar fell from a seven-week high on Monday as investors took stock of last week's strong US economic data and outlook for global interest rates. Friday's data showed that US consumer spending rose sharply in January, while inflation accelerated. Traders now expect the Fed to raise interest rates to around 5.4% by the summer. USD/JPY The first day of the new week for the USD/JPY pair was mixed in both the Asian and European sessions. The pair started the week at 136.4430, but fell to 136.00 during the day. At the time of writing, the yen was trading at 136.2970. In late February, the Japanese yen weakened above 136 to the dollar, hitting its lowest level in more than two months as Ueda, nominated governor of the Bank of Japan, doubled down on the bank's very restrictive monetary policy. The new governor of the Bank of Japan, Kazuo Ueda, said on Monday that the benefits of the bank's current monetary policy outweigh the costs, stressing the need to maintain support for the Japanese economy with very low interest rates. The comments reinforced signals that the bank will not turn away from its dovish attitude anytime soon. Previously, Ueda had opposed monetary tightening in response to cost-driven inflation and rejected immediate changes to the bank's yield curve control, warning that such measures would deeply hurt growth. EUR/USD EUR/USD started the week at 1.0556. In the Asian session, it mostly traded near 1.0550 and even 1.0560, then fell below 1.0540. In the European session, the euro was rising towards 1.0570. Currently, the EUR/USD pair is trading around 1.0560. The US currency has benefited widely from the view that its central bank has more power and leeway to counter inflation. Meanwhile, the Eurozone has to meet the varying needs of its twenty national economies, some of which will struggle to cope with even minor further interest rate increases. Interest rate differentials are likely to dominate euro fundamentals this week, although some key domestic data is emerging, most notably official eurozone inflation data. Due for release on Thursday and the annual base rate is expected to remain unchanged at 5.3% Read next: BNP Paribas Sued For Providing Financial Services To Companies That Allegedly Contribute To Deforestation Of The Amazon Rainforest| FXMAG.COM GBP/USD The movement of the cable pair resembles the movement of EUR/USD. GBP/USD started the week at 1.1950, but during the day GBP/USD fell towards 1.1930. In the European session, it gained an upward momentum and exceeded the level of 1.1980. Politically, European Commission President Ursula von der Leyen is due to travel to the UK today to meet Prime Minister Rishi Sunak on a new Brexit deal. This could see a resumption of trade between Northern Ireland and the UK, but it has not really translated into the GBP yet. AUD/USD The AUD/USD pair is the worst performer among the major currency pairs. The Aussie Pair started the day above 0.6730 but fell towards 0.6700 in the next session. In the European session, AUD/USD has slightly increased and at the time of writing it is just above 0.6710. The Australian dollar weakened to around $0.67, trading at its lowest level in nearly 2 months as better-than-expected US economic data boosted expectations that the Federal Reserve would need to raise interest rates further to stem rising inflation. Weak domestic employment data also affected the currency with Australia's unemployment rate unexpectedly rising to 3.7% in Q4 despite expectations to hold steady at 3.5%. Meanwhile, the Reserve Bank of Australia's latest monetary policy statement showed it had revised its inflation forecast for this year higher, saying price pressures were spreading to services and wages. Source: investing.com, finance.yahoo.com

USD/JPY remains sidelined, fails to extend week-start pullback from two-month high. Impending bear cross on MACD, bearish chart formation challenges Yen pair buyers. 50-SMA adds strength to the 135.00 support holding the door for sellers. USD/JPY seesaws near 136.30-40 during the initial hours of Tuesday’s European session. In doing so, the Yen pair fails to extend the previous day’s U-turn from the two-month high while staying inside a three-week-old rising wedge bearish chart pattern. In addition to the rising wedge and lackluster moves, the impending bear cross on the MACD also keeps USD/JPY sellers hopeful unless the quote defies the bearish chart pattern. For that, the Yen pair needs to remain successfully beyond the 136.90 immediate hurdle, as well as cross the 137.00 round figure. It’s worth observing that the mid-December 2022 high near 138.20 acts as the last defense of the USD/JPY bears, a break of which could quickly propel the prices towards the 140.00 psychological magnet. Meanwhile, a convergence of the 50-SMA and the aforementioned wedge’s bottom line highlights the 135.00 round figure as the short-term key support. Should the USD/JPY bears keep the reins below the 135.00 support confluence, the early month high near 133.00 may probe sellers during the theoretical south run targeting the monthly low of near 128.00. Overall, USD/JPY bulls seem to run out of steam after posting the biggest monthly jump in four months. Though, bears are far from entry unless the quote stays beyond 135.00. USD/JPY: Four-hour chart Trend: Limited upside expected

The U.S. dollar resumed its rally on Tuesday after dipping against sterling and the euro a day earlier, putting it back on track for its first monthly gain since September. The greenback's rally gathered momentum in recent weeks as upbeat economic data led to mounting expectations that the U.S. Federal Reserve will have to raise interest rates more than initially expected. The US economic report will include the Conference Board's Consumer Confidence Survey for February. In January, the annual expected consumer inflation component of this survey rose to 6.8% from 6.6% in December. The latest inflation data for January showed that price pressure remained higher than expected. If consumers' inflation expectations continue to rise, the US dollar could gain strength in the second half of the day. USD/JPY In the Asian session, the yen traded in the range of 136.20-136.30, but in the Asian session there was a sharp increase and at the time of writing USD/JPY is trading at 136.6930. Recent comments from new BOJ vice-president Shinichi Uchida and current BOJ governor candidate Kazuo Ueda had a dovish tone during testimony before the upper house of the Japanese parliament. Ueda confirmed his intention to stick to "abenomics" and defend the central bank's monetary policy stance. Japanese data released overnight were mixed as industrial production was weaker than expected and retail sales rose. Industrial production recorded the first decline in 3 months, when production fell in January by 4.9%MoM. Retail sales rose by a solid 1.9% m/m, with clothing and motor vehicles having the largest share. Manufacturing in Japan remains an area of ​​concern; however, consumption looks good and is indeed on track to recover. EUR/USD The euro pair fell in the morning session from levels above 1.06 to levels around 1.0585. In the European session, the EUR/USD pair rose significantly above 1.0620. At the time of writing, the EUR/USD pair is trading around 1.0615. However, deteriorating market sentiment seems to be limiting the pair's gains for now as the focus shifts to the Conference Board's US consumer confidence survey. The consumer price index (CPI) in France rose to 7.2% y/y in flash estimates in February from 7% in January. Similarly, the annual CPI in Spain rose to 6.1% from 5.9% in the same period. After stronger-than-expected inflation figures from major eurozone economies, markets are almost fully pricing in the European Central Bank's (ECB) final interest rate at 4%, down from 3.75% last week, with hawkish ECB betting helping the euro hold its ground. GBP/USD The cable pair in the Asian session maintained a downward trend and in its decline headed to the level of 1.2028. The European session provided a positive impulse for GBP/USD and the pair rose above 1.2090. The pound pair managed to break above the 1.21 level but failed to hold and is currently trading below that level at 1.2098. Meanwhile, British Prime Minister Rishi Sunak announced late Monday that he had reached an agreement with the European Union to replace the Northern Ireland Protocol with the Windsor Framework. While it's too early to tell whether these developments could have a lasting impact on sterling's valuation and the Bank of England's (BOE) policy outlook, the initial market reaction helped the pair to gain momentum. UK Prime Minister Sunak also noted that MPs would vote on the new deal and that they would respect the results of the vote. Later in the session, several BOE decision makers will give speeches. AUD/USD In the Asian session, the Australian pair recorded a significant drop from the 0.6750 levels to the 0.6710 levels. In the European session, the AUD/USD pair is rising again and trading around 0.6730. Source: investing.com, finance.yahoo.com, dailyfx.com

Amid the dollar index's rise by 0.33%, the USD/JPY pair avoided falling towards the support of the embedded hyperchannel line with the 134.00 mark. The day closed at the opening level, this morning, the price is trying to continue rising. It is aiming for 137.75. The Marlin oscillator is decreasing, it is an obstacle to growth, but this decrease can be interpreted as the oscillator discharging before it grows further, which, however, does not completely eliminate the risk of reversal. On the four-hour chart, the indicator lines remain in force - yesterday, it stopped declining and turned upward before touching these lines. The signal line of the Marlin oscillator reversed from the support of the zero line. These are signs of growth. Signs of a reversal into a correction is the price converging with the Marlin oscillator. The convergence is weak, but if there are any catalysts (which is unlikely yet as the US ISM Manufacturing PMI for February may show an increase from 47.4 to 48.0 today), it could materialize with all its hidden potential. A technical first sign of a reversal would be for prices to move below the MACD line, below 135.73.   Relevance up to 03:00 2023-03-02 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336359

USD/JPY struggles to capitalize on a modest uptick on Wednesday and remains below the YTD top. The BoJ’s dovish outlook, weaker Japanese PMI undermine the JPY and continue to lend support. Hawkish Fed expectations, elevated US bond yields act as a tailwind for the USD and favour bulls. The USD/JPY pair edges higher following the previous day's two-way price swings and trades with a mild positive bias through the early European session. The pair is currently placed below mid-136.00s and remains well within the striking distance of its highest level since December 20 touched on Tuesday. A combination of factors undermines the Japanese Yen (JPY), which, in turn, acts as a tailwind for the USD/JPY pair amid the underlying bullish sentiment surrounding the US Dollar. Data released earlier this Wednesday showed that Japan's manufacturing sector remained in contraction territory in February. This comes on the back of dovish comments from the incoming Bank of Japan (BoJ) Governor Kazuo Ueda and Deputy Governor nominee Shinichi Uchida, stressing the need to maintain the ultra-loose monetary policy. This, along with signs of stability in the equity markets weigh on the safe-haven JPY. The USD, on the other hand, remains pinned near a multi-week high amid firming expectations for further policy tightening by the Fed and lends additional support to the USD/JPY pair. In fact, the markets now seem convinced that the US central bank will have to raise interest rates for longer to tame stubbornly high inflation. This remains supportive of elevated US Treasury bond yields and continues to act as a tailwind for the Greenback. That said, indications that the Fed's rate hikes were beginning to have their intended effect of cooling the economy seem to cap any meaningful gains for the buck. Investors remain worried about economic headwinds stemming from rapidly rising borrowing costs. The fears were fueled by Tuesday's disappointing release of the Conference Board's US Consumer Confidence Index, which fell to 102.9 in February from 106 in the previous month. Furthermore, the Chicago PMI business survey for February also came in weaker-than-expected and dropped to 43.6 in February, marking the sixth straight month in contraction territory. The Richmond Fed also released its survey of manufacturing activity for February and reported a decline to -16 from -11 in January 2023. The aforementioned mixed fundamental backdrop is holding back traders from placing aggressive bets and keeping a lid on any meaningful gains for the USD/JPY pair, at least for the time being. Market participants now look to the US economic docket, featuring the release of ISM Manufacturing PMI later during the early North American session. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to the USD/JPY pair. Apart from this, traders will take cues from the broader risk sentiment to grab short-term opportunities around the major.

The dollar weakened and the Chinese yuan gained on Wednesday after Chinese manufacturing activity rose at the fastest pace since April 2012, while the euro gained after regional price data in Germany boosted inflation concerns. The Australian and New Zealand dollars also benefited from strong Chinese economic data that beat expectations, with the official Industrial Purchasing Managers' Index (PMI) rising to 52.6 last month from 50.1 in January. Upbeat China PMI data showed that Chinese economic activity continued to gain momentum following the decision to reopen the economy in December. The situation sparked a rally in major Asian stock indices, with the Euro Stoxx 50 index opening in the red. USD/JPY The yen traded above 136.25 in the Asian session, but fell sharply below 136.00 in the European session. The USD/JPY pair has dropped significantly to 135.30 in the last hours. USD/JPY at the time of writing is just above 135.30 (135.3040). The Japanese yen (JPY) strengthened slightly after data released today showed the Manufacturing PMI (Feb) was better than expected. EUR/USD On Wednesday, the trade of the euro pair is significantly positive, the EUR/USD pair has been rising since the beginning of the day. At the time of writing, the EUR/USD pair is trading around 1.0670. Data released on Tuesday showed accelerating inflation in France and Spain, the eurozone's two largest economies, raising the European Central Bank's (ECB) expectations for interest rate hikes. The pair is taking advantage of the ECB's hawkish expectations and the significant weakness of the US dollar. All eyes are on German inflation and US ISM PMI data. Markets expect the Harmonized Index of Consumer Prices (HICP), the European Central Bank's preferred measure of inflation, in Germany to fall to 9% yoy in February from 9.2% in January. If the annual HICP unexpectedly approaches or even exceeds January's value, the euro's initial reaction is likely to outpace its rivals. Markets are almost fully pricing in the ECB's final interest rate at 4% in 2023, and a strong inflation print from Germany should allow the ECB's hawkish bets to dominate the euro's valuation. Read next: Developer Vanke Is Selling 300 Million Shares To Allocate For The Proceeds To Debt Repayment| FXMAG.COM GBP/USD The GBP/USD pair is not doing as well as EUR/USD, despite rising to levels above 1.2080 in the Asian session. In the European session, the cable pair fell towards 1.2020, but rebounded and rose above 1.2050. Sterling rose marginally against a weaker dollar on Wednesday, trimming gains made earlier in the session after Bank of England Governor Andrew Bailey said nothing had been decided in terms of whether interest rates would need to rise again. Meanwhile, British Prime Minister Rishi Sunak reportedly told his MPs to give the Democratic Unionist Party (DUP) time and space to study the details of the new deal. The recent UK-EU deal or "Windsor Framework" has given the pound some momentum but it has struggled to maintain said gains. The reasons for this may be partly because the economic impact of the deal is unlikely to be significant for the UK economy as it does not improve trading conditions between the rest of the UK and the EU. A recent poll by the Bank of England found Brexit no longer a key uncertainty for UK businesses. AUD/USD AUD/USD gains on Wednesday. The Aussie Pair fell significantly at the beginning of the day, but then rebounded and maintained its upward trend. The Australian pair is trading above 0.6775 at the time of writing. The Australian dollar fell below 67 cents after Q4 quarter-on-quarter GDP was 0.5% instead of the 0.8% forecast and compared to the previous 0.7%, which was revised up from 0.6%. The currency trimmed losses later in the day thanks to solid data from China. Annual GDP by the end of December was 2.7%, in line with expectations. Today's GDP figures come ahead of the Reserve Bank of Australia's monetary policy meeting next Tuesday. They are expected to raise their target cash rate by 25 basis points (bps) to 3.60%. If it does, it will be the tenth increase since it started in May last year. The latest inflation reading is well above the RBA target range of 2-3% at 7.8% year-on-year. Source: finance.yahoo.com, investing.com

Currently on the daily chart, USD/JPY main currency pairs seems trying to test and break above the level 138,17 where the rally movement above confirmed by the price movement which is above the EMA 10 and CCI indicator successfully break above the level -100,0 & 100 which indicates that buyers are dominating this market so that if the 138.17 level is successfully broken, USD/JPY will potentially continue strengthening up to 142.24 in the next few days. However, it should be noted if there is a downward correction beyond the 129.81 level and/or the CCI indicator penetrates below the up trendline, it is very likely that the Bull scenario previously described will become invalid and cancel itself. (Disclaimer)   Relevance up to 05:00 2023-03-05 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120487

USD/JPY catches fresh bids and climbs back closer to the YTD peak amid resurgent USD demand. Hawkish Fed expectations push the US bond yields higher and provide a fresh lift to the Greenback. The divergent Fed-BoJ policy outlook favours bullish traders and supports prospects for further gains. The USD/JPY pair is seen building on the overnight late rebound from the 135.25 area and steadily climbs back closer to the YTD peak during the early European session on Thursday. The pair currently trades around the 136.70 region, with bulls now awaiting a sustained strength beyond the 100-day Simple Moving Average (SMA) before placing fresh bets. The US Dollar regains positive traction and reverses a part of the previous day's sharp retracement slide from a multi-week high amid a further rise in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond climbs further beyond the 4.0% threshold, hitting its highest level since November 2022, and remains well supported by expectations for further policy tightening by the Fed. The markets seem convinced that the US central bank will keep interest rates higher for longer than previously estimated in the wake of stubbornly high inflation. The bets were lifted by the overnight hawkish remarks by Atlanta Fed President Raphael Bostic, reiterating the view that the policy rate needs to rise to the 5.00%-5.25% range and remain at that level well into 2024. Adding to this, Minneapolis Fed President Neel Kashkari reiterated that inflation in the US is still very high and that their job is to bring it down. Karikari also noted that the risk of under-tightening is greater than the risk of over-tightening.  Furthermore, the US ISM Manufacturing Index showed that the Prices Paid sub-component accelerated to 51.3 in February from 44.5. The Japanese Yen (JPY), on the other hand, is undermined by the recent dovish remarks by the incoming BoJ Governor Kazuo Ueda and Deputy Governor nominee Shinichi Uchida, stressing the need to maintain the ultra-loose monetary policy.  That said, the cautious market mood - amid looming recession risks - could benefit the JPY's safe-haven status and cap the upside for the USD/JPY pair. Hence, it will be prudent to wait for a convincing breakout through the 100-day SMA barrier before positioning for an extension of the recent appreciating move witnessed over the past month or so. Market participants now look forward to the release of the usual Weekly Initial Jobless Claims data from the US, due later during the early North American session. This, along with the US bond yields, will drive the USD demand and provide some impetus to the USD/JPY pair. Traders will further take cues from the broader risk sentiment to grab short-term opportunities ahead of speeches by influential FOMC members during the Asian session on Friday.

Technical analysis: USD/JPY has been trading upside this morning and I found potential for the upside continuation of the downside correction. Key intraday support zones are set at 136.40 and 1.36.20 (Fibonacci confluences) I see potential for the upside continuation after the downside correction. Upside objective is set at 137.40 The short-term trend is bullish....   Relevance up to 09:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314661

An improvement in risk sentiment after the publication of upbeat macroeconomic data from China made it difficult for the US dollar to find demand on Wednesday. USD/JPY The USD/JPY pair in the Asian session recouped losses and rose towards 136.80. At the beginning of the European session, the yen dropped significantly to 136.2540, but quickly began to recover. At the time of writing, USD/JPY is trading at 136.7450 So far, the Japanese yen has been stable this week in a period where the US dollar has weakened significantly against most of its G-10 peers. The yen's lack of strength may reflect the belief that the new Governor of the Bank of Japan (BoJ) Kazuo Ueda will maintain the very loose monetary policy of his predecessor. EUR/USD The euro pair is in a downtrend. It started the day high above 1.0670 but dropped to trade around 1.0620. The euro fell against the dollar on Thursday after data showed inflation in the euro zone was not as high as investors had feared based on national readings in recent days. Eurozone inflation eased to 8.5% in February from 8.6% a month earlier on lower energy prices. The core inflation rate in the Euro Area rose for a third successive month hitting a fresh record high of 5.6% in February. The core CPI which excludes prices of energy, food, alcohol and tobacco went up 0.8%. The core number reinforces the idea that without decreases in energy prices inflation remains sticky and adding credence to the recent hawkish rhetoric from ECB policymakers. Investors now see the ECB's 2.5% deposit rate rising by a combined 100 basis points in March and May, then to around 4.1% at the turn of the year. Read next: Tesla Intends To Cut Assembly Costs, The White House Released The National Cyber Strategy | FXMAG.COM GBP/USD The pound pair against the euro is down today. GBP/USD traded below 1.20 again. GBP/USD extended its decline and dropped below 1.2000 on Thursday after failing to capitalize on Wednesday's US dollar (USD) weakness. The couple looks delicate. The British pound loses against the US dollar this Thursday as the dollar finds some support. Last night, Fed officials (Kashkari and Bostic) maintained their hawkish stance. From the UK's perspective, the Brexit deal between the Prime Minister and the EU. Trade disputes with Northern Ireland have now been resolved, but the most surprising aspect of the deal was the favorable reception from some senior Brexiteers who praised the new concessions. While this is positive for the overall UK economy, the currency remains driven by central bank policy. The Brexit deal could bring short-term relief to the pound against the USD. AUD/USD The Australian movement is similar to its European counterparts. The AUD/USD pair remains above 0.67 despite a significant drop from 0.6767 to 0.6730. Source: finance.yahoo.com, investing.com

The dollar-yen pair continues to besiege the 137th figure, despite the general weakening of the greenback. The Japanese currency is under pressure from the dovish rhetoric of the Bank of Japan, whose leadership will change next month. A few months ago, many traders and currency strategists pinned their hopes on Haruhiko Kuroda's successor, especially as the favorites of the pre-election race were economists with hawkish views. But the choice of the Japanese authorities fell on Kazuo Ueda, who instantly dashed the hopes of the hawks. Judging by his statements (and those of his future deputies), the Bank of Japan will follow the course set by Kuroda, at least for the foreseeable future. The dollar is in disgrace, but the yen looks even weaker The USD/JPY pair has been trading in a 136.00–136.90 range this week, with an apparent upward bias. During the last three days, sellers tried to pull the pair down to the base of the 136th figure, but in each case buyers took the initiative and returned the pair to the 137th price level. On the one hand, there is a common flat, a sideways price movement. But on the other hand, such price fluctuations took place at the background of the general weakening of the dollar. Several macroeconomic reports came out in the "red zone" in the USA, and risk appetite increased in the market after strong data from China (PMIs surprised traders with considerable growth). While in the U.S., the ISM manufacturing PMI was in the negative territory, only rising to 47.7 (vs. the forecast of 48.5). In particular, the employment index declined to 49.1 (from the previous reading of 50.6). The day before this release, the U.S. consumer confidence indicator was also in the red zone, coming out at 102.9 (the downward dynamic has been recorded for the second month in a row). The Richmond Fed Manufacturing Index was also disappointing, falling to -16 points. Nevertheless, despite the greenback's poor condition, buyers of USD/JPY kept the pair from plunging and returned it to the 137th figure. This shows that the yen looks unattractive in the eyes of the traders, even against the limping dollar. Such "unattractiveness" is primarily due to the rhetoric of Ueda and his future deputies, who will head the central bank in April. Inflation rises, rhetoric stays the same At the end of last month, key data on inflation growth in Japan were released. The general consumer price index in January rose by 4.3%, the strongest growth rate of the indicator since December 1981. The core CPI, which does not include fresh food but includes energy prices, also hit a 40-year high. Almost all components of the report came out in the green zone, exceeding the forecast levels. Inflation has been above the 2% target of the Bank of Japan for the past ten months. Kazuo Ueda commented on this release "in the spirit of Haruhiko Kuroda." He said that he intends to continue a large-scale program of monetary policy easing of the central bank. In his view, the rise in consumer inflation is mainly due to higher import prices, not higher demand. "Therefore, the Bank of Japan should maintain ultra-loose monetary policy," Ueda stressed. He expressed confidence that price growth factors would "probably slow down soon" and inflation would fall below 2% by the end of this year. The new governor of the Bank of Japan also stressed that "at the moment," the advantages of the current monetary policy outweigh its disadvantages. Ueda's future deputies voiced the same position. To be fair, Kuroda's successor hypothetically allowed monetary policy to be calibrated, but he said the necessary adjustments "would vary depending on changes in the economy." At the same time, he added that it is too early to talk about how and when the central bank will change its policy. This dovish rhetoric has allowed USD/JPY buyers to ignore the weakening greenback as the pair continues to show an upward mood. Conclusions The current fundamental background for the USD/JPY pair contributes to the development of the upward trend. The yen is currently unable to withstand the greenback, even in the face of a decline in the U.S. dollar index. The technical indicator also speaks about the attractiveness of longs. The pair on the daily chart is trading between the middle and upper lines of the Bollinger Bands indicator, which indicates the priority of the upward movement. In addition, the price is above all lines of the Ichimoku indicator, including above the Kumo cloud. The nearest upward target is 137.00 (upper line of the Bollinger Bands indicator on the 4-hour chart). The main target is slightly higher, at 137.70, which is also the upper line of the Bollinger Bands indicator, but already on the D1 timeframe.   Relevance up to 11:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336551

The yen is moving up so far, according to our main scenario, to the 137.75 target level. But the technical pressure on the pair is increasing every day. The signal line of the Marlin oscillator is being pushed down, against the rising price. The pair might not reach the 137.75 target. The pair can continue to rise if the dollar continues a massive attack in all markets, including commodities, then the oscillator's decline will transform before it rises further. And then the price could overcome the target level of 137.75 and the rally will continue to reach 138.90 (July 21, 2022 high). There is a double divergence on the four-hour chart. If the price goes under the MACD line, below the 136.28 mark, it will also correspond to the move of the Marlin oscillator into the downtrend area. The downtrend will be fueled even more, once the price hits the 134.00 target. A full-fledged growth will start once the price surpasses yesterday's high (137.10).   Relevance up to 03:00 2023-03-04 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336626

USD/JPY is looking to recapture the 137.00 resistance despite the risk appetite having improved. Modest dovish commentary from Federal Reserve Waller has triggered volatility in the USD Index. Bank of Japan might infuse more liquidity to fade the impact of a fresh decline in the Tokyo inflation. USD/JPY is struggling to shift its auction above the 38.2% Fibo retracement plotted at 136.85. USD/JPY is juggling in a limited range around 136.60 in the Asian session. The asset has rebounded from 136.50 and is aiming to recapture the immediate resistance of 137.00 as the Tokyo Inflation has softened dramatically for the first time after a nine-month period escalation. Lower food and energy prices have trimmed the headline Consumer Price Index (CPI) while the core inflation that strips off the impact of food and oil steadily improved. The US Dollar Index (DXY) is on the verge of delivering a downside break below 104.80 amid an absence of recovery signals. The downside pressure in the USD Index has built amid modest dovish commentary from Federal Reserve (Fed) Governor Christopher Waller. Fed Waller cited February’s inflation recovery as a one-time blip and the price pressures will resume their downtrend from next month. S&P500 futures have recovered the majority of losses recorded in the Asian session, portraying a decent recovery in the risk appetite of the market participants. The demand for US government bonds has recovered marginally amid ease in the risk aversion theme. This has pushed the 10-year US Treasury yields below 4.05%. Upbeat US Services PMI could fuel hawkish Fed bets Anxiety among the market participants is gradually escalating ahead of the release of the United States Institute of Supply Management (ISM) Services PMI data. The economic data is seen lower at 54.5 from the former release of 55.2. The New Orders Index which conveys the forward demand is expected to decline to 58.5 from the prior figure of 60.4. Earlier, the US Manufacturing PMI displayed a fourth-time contraction, however, the New Orders Index was exceptionally higher. A surprise rise in the Services New Orders Index along with the already upbeat Manufacturing demand outlook will clear that the overall forward demand is in an expansionary mode and could propel the Consumer Price Index (CPI), which will bolster expectations of more rates from the Federal Reserve. Atlanta Fed Bank President Raphael Bostic said on Thursday that the central bank could be in a position to pause the current tightening cycle by mid-to-late summer. He favors a 25 basis points (bps) rate hike in March but has left room opened for more hawkish rate outlook if inflation and labor market data come in stronger. Tokyo Inflation surprisingly decline Bank of Japan (BoJ) policymakers are spending sleepless nights, designing strategies for achieving a stable 2% inflation. The central bank is infusing stimulus into the Japanese economy to fuel wages and domestic demand. Japan’s inflation was fueling constantly, however, a recent decline has alarmed the Bank of Japan policymakers. The annual headline CPI has dropped to 3.4% from the consensus of 4.1% and the prior release of 4.4%. Contrary to that, the core CPI that excludes the impact of energy and food prices have improved to 3.2% from 3.1% as expected and the former release of 3.0%. It seems like the inflationary pressures have been exceptionally battered by the recent fall in food and energy prices. Reuters reported that “The pace of inflation slowed due in part to the government's energy subsidies to ease the pain on households from soaring electricity bills.” Commentary from Bank of Japan Governor Nominee Kazuo Ueda on a fresh decline in the Tokyo CPI will be keenly watched. Meanwhile, Japanese Prime Minister Fumio Kishida has ordered the ruling party to draft additional measures to counter price hikes, as reported by the Kyodo news agency. The agenda behind that would be supporting households to offset the impact of items such as food and energy, which are highly inflated. On the economic front, a poll by Reuters reported Japan's economy is likely to grow a tad faster than initially estimated in the fourth quarter. Revised Gross Domestic Product (GDP), scheduled for March 9, might grow at 0.8% annualized in October-December, versus an initial estimate of 0.6%. USD/JPY technical outlook USD/JPY is making efforts in overstepping the 38.2% Fibonacci retracement (placed from October 21 high at 151.94 to January 16 low at 127.22) at 136.85. A bear cross, represented by the 20-and 50-period Exponential Moving Averages (EMAs) at 133.27, adds to the downside filters. The Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that the bullish momentum is already active.

The US dollar declined against its major trading partners early Friday ahead of the release of service sector data for February from S&P Global. The US economic docket will feature the ISM Services PMI report on Friday. Recession fears could return if the headline PMI comes in below and the US Dollar could come under pressure ahead of the weekend. The Fed appearance schedule is also full on Friday. Dallas Fed President Lorie Logan is scheduled to speak followed by Atlanta Fed President Raphael Bostic, Fed Governor Michelle Bowman and Richmond Fed President Tom Barkin. Logan and Bowman both vote on the Federal Open Market Committee in 2023. USD/JPY The yen pair traded in the range of 136.60-136.70 in the Asian session. In the European session there was a dip to close to 136.00, but USD/JPY rebounded and traded at 136.19 Following the previous day's sharp slide from a multi-week high, the US Dollar (USD) was back in demand amid a further rise in the US Treasury bond yields and turned out to be a key factor acting as a tailwind for the major. The Japanese Yen (JPY), on the other hand, is weighed down by expectations that the Bank of Japan (BoJ) will stick to its dovish stance for the foreseeable future. In fact, the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said earlier this week that the central bank isn't seeking a quick move away from a decade of massive easing. The market focus now shifts to the upcoming BoJ monetary policy meeting, scheduled next week. In the meantime, the divergent Fed-BoJ outlook should continue to lend support to the USD/JPY pair. EUR/USD The last day of the trading week for the euro pair was up in the Asian session. Also in the European session, the EUR/USD pair was increasing with moments of decline. Currently, the pair is at the level of 1.0614 ECB Governing Council member Pierre Wunsch said early Friday that a terminal rate of 4% could not be excluded if core inflation in the eurozone remains persistently high. Meanwhile, Morgan Stanley said in its latest research note that they have updated the ECB terminal rate projection to 4% following "material revisions" to inflation forecasts. GBP/USD A pair of cable makes up for losses all Friday. GBP/USD started the day at around 1.1950 and is now trading above 1.1990 The pound rose on Friday, boosted by data that showed business activity rose at the fastest rate in eight months in February, bolstering investors' view that UK rates would continue to rise after March. The final version of the S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) rose to 53.5 last month from 48.7 in January, the strongest rate of increase since June last year. Any reading above 50 means expansion. AUD/USD The Austalitic exchanged similarly to the pound today, but fell in the European session and is currently trading above 0.6750. Source: investing.com, finance.yahoo.com

The U.S. dollar slid from a 2-1/2-month high versus the Japanese yen on Friday, on track for its largest weekly loss since mid-January against a basket of six major currencies, as traders stepped back to gauge the path for Federal Reserve policy. At the beginning of the week, optimistic PMI data for manufacturing from China allowed risk flows to return to the markets and hindered the strengthening of the USD. USD/JPY The yen pair started trading at 136.3840 for the week. Throughout the week, USD/JPY held above 136.00 except on Wednesday, where it traded below that level, recording a weekly trading low of 135.27. The next day, the yen pair rose and registered its highest trading level of the week at 137.05. The pair failed to maintain momentum and fell below 136.00 on the last day of trading to end the week at 135.8310. The Japanese Yen is weighed down by expectations that the Bank of Japan (BoJ) will stick to its dovish stance for the foreseeable future. In fact, the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said earlier this week that the central bank isn't seeking a quick move away from a decade of massive easing. EUR/USD The beginning of trading in the EUR/USD pair was at weekly lows. The euro pair started trading at 1.0550 and for the first two days of the week rose above 1.06. This increase did not last long and the EUR/USD pair fell below 1.06. The beginning of the new month was very favorable for the euro pair as it gained and reached the highest trading level of the week at 1.0689. The exemplary momentum did not last long and the pair found themselves under pressure to fall towards 1.0580 again. The pair last day rebounded and traded above 1.06 (1.0638). GBP/USD The beginning of the week and at the same time the end of the month was favorable for the pound and the GBP/USD pair gained and thus reached the highest trading level of the week (Tuesday) at 1.2140. The new month brought a downward move to the cable pair and the pair tested below 1.20 again. On the last day, GBP/USD made up for the previous day and managed to cross the 1.20 level and close the trade at 1.2045. The British pound found some support on Friday thanks to the UK Services PMI data, as well as renewed risk appetite after better-than-expected China PMI data. From the UK's perspective, the focus will be on British GDP, which is likely to fall below 0%, and if the actual figures are confirmed, fears of recession will return, possibly hampering GBP growth. AUD/USD For the Australian, trading in the week was mixed, with both highs and lows. For the first days of trading, the AUD/USD pair gained in the direction of 0.6760, then fell sharply to open the week's low at 0.6698. After falling, the Aussie Pair rose until it reached a weekly high at 0.6783 before falling back towards 0.6710. The last day of trading was up for the AUD/USD pair, the pair ended the week close to the week's high, at 0.6771. The decline in the Australian dollar stalled after surprisingly strong data on manufacturing and services in China. However, for the AUD/USD rebound to be sustainable, a reversal in Australia's monetary policy and growth divergence with US monetary policy may be necessary. The macro data from Australia since early March has been disappointing. The Australian economy expanded at its weakest pace since last quarter, while monthly consumer prices rose less than expected in January. Building permits have fallen the most in history, suggesting the housing market is in the throes of interest rate hikes by the Reserve Bank of Australia. The main focus now is on the RBA's interest rate decision scheduled for March 7 - the central bank is widely expected to raise the cash rate by 25 basis points. Source: finance.yahoo.com, investing.com

On the 4 hour chart, USD/JPY main currency pairs seems moving inside the channel that go upward however by the appreance of deviation between price and Awesome Oscillator indicator then in the near future has the potential to go down until the level of 135,27 as the main target and 134,07 as the next target during the journey to these levels it was not corrected upwards which exceeded the level of 136.66 because if this level manages to break above then all the scenarios of the decline that have been described earlier will become invalid and cancel automatically. (Disclaimer)   Relevance up to 03:00 2023-03-07 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120655

USD/JPY drifts lower for the second successive day on Monday, albeit lacks follow-through. Retreating US bond yields keeps the USD bulls on the defensive and exerts some pressure. The divergent Fed-BoJ policy outlook limits losses ahead of this week’s key event/data risks. The USD/JPY pair remains under some selling pressure for the second successive day on Monday and moves further away from the YTD peak, around the 137.10 region touched last week. The pair, however, recovers a few pips from the daily low and trades just above mid-135.00s during the early European session, down around 0.20% for the day. The US Dollar kicks off the new week on a subdued note amid a modest downtick in the US Treasury bond yields and turns out to be a key factor weighing on the USD/JPY pair lower. Apart from this, looming recession risks seem to benefit the safe-haven Japanese Yen (JPY) and contribute to the offered tone surrounding the major. Worries about a deeper global economic downturn resurfaced after China set a lower-than-expected target for economic growth and forecast that the economy would expand by 5% in 2023. The downside for the USD/JPY pair, meanwhile, seems cushioned amid the divergent Bank of Japan-Federal Reserve monetary policy outlook. In fact,  the incoming BoJ Governor Kazuo Ueda stressed the need to maintain the ultra-loose policy to support the fragile economy and said last week that the central bank isn't seeking a quick move away from a decade of massive easing. In contrast, the US central bank is universally expected to stick to its hawkish stance and keep rates higher for longer to tame high inflation. The incoming US macro data indicated that inflation isn't coming down quite as fast as hoped and pointed to an economy that remains resilient despite rising borrowing costs. Adding to this, a slew of FOMC members backed the case for higher rate hikes and opened the door for a 50 bps lift-off at the March policy meeting.  This should act as a tailwind for the US bond yields and favours the USD bulls, which supports prospects for the emergence of dip-buying around the USD/JPY and warrants caution for bears. Traders might also prefer to move to the sidelines ahead of this week's key event/data risks, starting with Fed Chair Jerome Powell's semi-annual congressional testimony on Tuesday and Wednesday. Investors will look for fresh clues about the Fed's future rate-hike path, which will play a key role in influencing the near-term USD price dynamics. This will be followed by the BoJ monetary policy meeting on Friday and the release of the closely-watched US monthly employment details, popularly known as NFP.

The US dollar weakened on Monday as investors awaited testimony from Federal Reserve Chairman Jerome Powell ahead of February's employment report later in the week, which is likely to influence how much more the US central bank raises interest rates. After making massive hikes last year, the Fed raised rates by 25 basis points in its last two meetings, but a plethora of resilient economic data fueled market fears that the central bank might return to an aggressive path. USD/JPY The yen pair started the week at 136.0380 but failed to stay above 136.00 and fell to 135.3890. After this fall, the USD/JPY pair rebounded, but at the beginning of the European session it fell again. Also after the second drop, the pair rebounded and managed to break above 136.00, but failed to hold. USD/JPY is trading below 136.00 at 135.94. The Japanese yen strengthened above 136 to the dollar amid general dollar weakness as investors cautiously awaited Tuesday and Wednesday's congressional testimony from Federal Reserve Chairman Jerome Powell. Meanwhile, the yen remains more than 6% below its January highs as Ueda, nominated governor of the Bank of Japan, doubled down on the bank's ultra-easy monetary policy. During the second parliamentary hearing of the approval process, Ueda stated that the benefits of the BJ stimulus outweigh the negative effects for the current economic scenario, adding that a move to more restrictive policies would only be necessary if inflation increased significantly. Ahead this week, the Bank of Japan’s (BoJ) monetary policy decision will be made on Friday although the market is not expecting any changes there. EUR/USD The EUR/USD pair started trading at 1.0628 and initially traded in the range 1.0625-1.0630. The euro pair then rose to levels around 1.0650, then to above 1.0660. This increase in the European session did not last and the pair dropped to levels around 1.0625. The euro may end the month slightly higher against the dollar, supported by signals from the European Central Bank about further interest rate hikes. ECB officials continue to point to a 50bps rate hike at its March 16 meeting as a deal done, with the market pricing in another 150bps hike by year-end GBP/USD The cable pair started trading at 1.2032 and held in the range of 1.2025-1.2040 in the Asian session. In the European session, the GBP/USD pair, as well as the EUR/USD pair, fell below 1.20, but rebounded and at the time of writing is at 1.2008. Sterling trading could be stable this week as it's hard to find a catalyst to break the currency out of recent ranges. Any further progress on the UK-EU deal to review post-Brexit trade arrangements in Northern Ireland is unlikely to be worth much more than pound sterling. AUD/USD The Australian pair started the week with a dip to the 0.6757 level and then fell to the 0.6743 level. After this decline, the AUD/USD pair rose to 0.6770 but failed to maintain momentum. The last hours of the Asian session for the Australian were in the range of 0.6750-0.6760. With the start of the European session, the AUD/USD pair began a decline, and at the time of writing it reached the level of 0.6728. The Australian dollar lost some of its gains Monday morning after the Chinese National People's Congress (NPC) released more conservative 2023 GDP forecasts. The forecast is currently at 5%, as opposed to the expected range of 5.5-6%, which could be disappointing for commodity-exporting countries like Australia, but a lower base could allow for a better chance of an upside surprise. Looking ahead, the Reserve Bank of Australia (RBA) will be in the spotlight tomorrow morning with its interest rate decision. The consensus is in favor of another 25 bp rate hike, which will be the 10th rate hike in a row by the central bank. This could cause the Australian dollar to find some support against the US dollar Source: investing.com, finance.yahoo.com

Yesterday's attempts to win back positions against the dollar were suppressed, and the pair ended the day above Friday's closing level by 9 points. The Marlin oscillator is persistently decreasing on the daily chart, but it also creates the potential for the oscillator to move into the overbought zone. We still have an uptrend, and the target is the nearest embedded line of the price hyperchannel around 137.75. If the price overcomes yesterday's low (135.38), it can continue to fall to the bottom line of the price channel around 134.00. On the four-hour chart, the price is under the balance and MACD indicator lines. The Marlin oscillator reverses upward, but it still needs to move into the positive area to support the bulls. In order for the pair to continue rising, the price needs to break through the MACD line at 136.53   Relevance up to 03:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336879

USD/JPY is oscillating around 136.00, downside looks favored amid the risk-on mood. An upbeat market mood has pushed the 10-year US Treasury yields below 3.96%. The BoJ is expected to remain dovish as current inflationary pressures in Japan are the outcome of international forces. The USD/JPY pair is displaying a back-and-firth action around 136.00 in the early European session. The asset has turned sideways as investors are awaiting fresh triggers for further guidance. Right from Federal Reserve (Fed) chair Jerome Powell’s testimony to the interest rate decision by the Bank of Japan (BoJ) and the United States Employment report, plenty of events will be held this week. Meanwhile, S&P500 futures have picked some bids after a choppy Monday, portraying a cheerful market mood. The US Dollar Index (DXY) is demonstrating signs of recovery after printing a day low at 104.16. The USD Index bulls could retreat amid the risk appetite theme, underpinned by the market participants. An upbeat market mood has also improved demand for US government bonds and has pushed the 10-year US Treasury yields below 3.96%. Two-day Fed Powell’s testimony before Congress will provide meaningful cues. The street is having mixed responses toward commentary as one school of thought expects a hawkish commentary amid higher inflationary pressures while the other school of thought sees a neutral stance as many things bank upon February’s data. Going ahead, if United States inflation continues to persist, the Unemployment Rate remains at lower levels, and consumer spending remains resilient, Fed Powell would have no other option than to push rates higher. On the Tokyo front, the interest rate decision by the BoJ will remain in action. The BoJ is expected to remain dovish as current inflationary pressures in Japan are the outcome of international forces as the economy is struggling to accelerate wages and domestic growth.  

The U.S. dollar held steady on Tuesday ahead of testimony before Congress by Federal Reserve Chair Jerome Powell, while the Aussie slid after the Reserve Bank of Australia hinted it might nearly be done with monetary tightening. The RBA is no exception in warning of further tightening. Central bankers, including the US Fed and European Central Bank, said more work needed to be done to fight inflation. The prospects for further policy tightening by the Fed continue to act as a tailwind for the US Dollar (USD), the markets seem convinced that the US central bank will stick to its hawkish stance and keep rates higher for longer in the wake of stubbornly high inflation. The bets were lifted by the incoming US macro data. Investors will also face the release of the closely watched monthly US employment data, popularly known as the NFP, this week. USD/JPY The USD/JPY pair started trading above 136.00 on Tuesday and traded above 136.10 in the first hours. The yen pair failed to hold and fell below 136.00 and tested the level of 135.8440. In the European session there was an even greater drop to 135.60. Currently, the pair has managed to rebound and the hadel takes place close to 136.00. The decline, however, remains contained amid expectations that the Bank of Japan will maintain very loose policy to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, said last week that the central bank is not aiming for a quick turnaround from a decade of massive monetary easing. As such, the BoJ's monetary policy decision, scheduled to be announced on Friday, is unlikely to give the JPY any respite. EUR/USD The euro pair traded high above 1.0680 in the Asian session. In the European session, the EUR/USD pair fell below 1.0660. At the time of writing, the EUR/USD pair is just above 1.0660. Looking ahead, it seems that comments from central bank officials could be a driving force for the EUR/USD rate along with other FX markets and bond markets in general. The ECB is scheduled to meet on Thursday, March 16 ahead of the Fed, which begins its meeting next week on March 22. An additional risk of events may also be data on GDP in the whole euro, which will be released on Wednesday. GBP/USD The cable pair started trading above 1.2020 and traded around this area in the Asian session. GBP/USD managed to rise above 1.2060 but lost momentum and fell below 1.20. The pound pair is at the time of writing just below 1.20, at 1.1992. Although the US dollar came under renewed selling pressure on Monday, the GBP/USD pair struggled to gain traction. Furthermore, a sense of stability has returned to the UK property market after last year's turmoil, with a second consecutive month of gains after falling in December 2022. However, prices remain at 2.5% q/q, and underlying activity continues to indicate a downtrend. AUD/USD The pair of the Australian started trading above 0.67, but had already fallen to 0.66 earlier in the Asian session. The Aussie pair is currently trading below 0.6670. The Reserve Bank of Australia raised its benchmark interest rate by 25 basis points in an attempt to control inflation reaching its highest level in three decades. The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 3.60% and said further monetary policy tightening would be needed. Source: finance.yahoo.com, investing.com

The USD/JPY kept the monthly uptrend until yesterday's attack, set by Federal Reserve Chairman Jerome Powell's hawkish speech in the Senate. The dollar was up 122 points against the yen. Japan's balance of payments for January was released this morning, showing a significant decline from 0.03 trillion yen in December to -1.98 trillion, and a seasonally adjusted decline from 118.4 trillion yen to 21.6 trillion. The 137.75 target level set by the embedded global channel line is nearby. Passing the level will open the target at 138.90, a local peak on July 21, 2022. Next, it could climb to 140.90, the next price hyperchannel line. On the four-hour chart, the price has settled above the balance and MACD indicator lines, the Marlin oscillator turns down, but it is already reliably and highly fixed in the area of the uptrend. We will probably see a small respite before a decisive attack on 137.75.     Relevance up to 03:00 2023-03-09 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337004

USD/JPY touches a fresh YTD peak on Wednesday amid sustained USD buying interest. Rising bets for a 50 bps Fed rate hike in March, elevated US bond yields boost the USD. The risk-off mood lends some support to the safe-haven JPY and caps gains for the pair. The USD/JPY pair gains traction for the second straight day on Wednesday and climbs to its highest level since mid-December. The pair maintains its bid tone through the early European session and is currently placed around the 137.60 region, just above a technically significant 200-day Simple Moving Average (SMA). The overnight hawkish remarks by Federal Reserve Chair Jerome Powell pushes the US Dollar to a three-month high, which, in turn, is seen acting as a tailwind for the USD/JPY pair. In the prepared remarks for his semi-annual congressional testimony, Powell indicated that interest rates might need to go up faster and higher than previously anticipated. Powell added that the Fed is prepared to increase the pace of rate hikes to combat stubbornly high inflation and warned against prematurely loosening policy. This, in turn, lifts bets for a 50 bps rate hike at the March policy meeting and remains supportive of elevated US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond is holding steady near the 4.0% threshold and the rate-sensitive two-year Treasury note stands tall near its highest level since 2007. This continues to lend support to the Greenback, which, along with expectations that the Bank of Japan (BoJ) will maintain the ultra-loose policy settings, is pushing the USD/JPY pair higher. It is worth recalling that the incoming BoJ Governor Kazuo Ueda last week stressed the need to maintain the ultra-loose policy to support the fragile economy.  Ueda also said that the central bank isn't seeking a quick move away from a decade of massive easing. This marks a big divergence in comparison to the Fed's hawkish stance and supports prospects for a further appreciating move for the USD/JPY pair. That said, the risk-off mood benefits the JPY's safe-haven status and keeps a lid on any further gains for the major. Nevertheless, the fundamental backdrop seems tilted firmly in favour of bullish traders. Market participants now look forward to the US economic docket, featuring the release of the ADP report on private-sector employment and JOLTS Job Openings data. Apart from this, Powell's second day of testimony before the House Financial Services Committee should influence the USD price dynamics and provide some impetus to the USD/JPY pair. The focus will then shift to the BoJ meeting and the US NFP report on Friday.

The dollar hit multi-month highs against most other major currencies on Wednesday after Federal Reserve Chairman Jerome Powell warned that US interest rates may need to rise even faster and higher than expected to contain stubborn inflation. Powell told lawmakers on Capitol Hill on Tuesday that recent economic data from the United States was better than expected, so the pace and size of future hikes may also need to be stepped up, pushing expectations for short-term US interest rates higher. Higher interest rates are good for the dollar as they improve its yield and investors seek safety while global stock markets fall. The dollar also surpassed its 200-day moving average against the yen for the first time this year. The dovish slope from the RBA contrasted with the hawkish Jerome Powell. USD/JPY The yen pair started the day trading above 137.40 and rising towards 137.90. After this increase, the USD/JPY pair began to fall. At the time of writing, the USD/JPY pair was above 137.40, but has the potential to fall further towards 137.30. On the Japanese front, during the final political meeting with Governor Haruhiko Kuroda this week, the Japanese central bank will maintain a very loose monetary policy. Data on Tuesday showed Japan's real wages fell by the most in nine years in January, as four-decade high inflation erodes Japan's purchasing power. EUR/USD The EUR/USD pair started trading above 1.0545, but quickly started a decline towards 1.0530. After this decline, the EUR/USD pair started rising towards 1.0545 and kept trading in the 1.0540-1.545 range. At the time of writing, papra has dropped to 1.0540 and is now at 1.0537. German data released today showed that retail sales weakened more than expected, while industrial production rose sharply, easily beating forecasts. Moreover, the hawkish tone of Powell's comments also seems to have an impact on expectations of interest rate hikes by the European Central Bank (ECB). According to Reuters, markets see a 65% probability that the ECB's final interest rate will be 4.25% this year, compared to a 4.00% final interest rate last week alone. The ECB's hawkish bets could help the euro limit losses in the short term. GBP/USD The cable pair started trading above 1.1825 but similarly to the euro then fell. After falling to the level of 1.1810, the GBP/USD pair rebounded and rose towards 1.1840. After breaking above 1.1845, the pound pair fell back towards 1.1830. The pound reacted negatively to Fed Chairman Jerome Powell's more aggressive guidance during yesterday's appearance before the Senate Banking Committee. UK OIS markets are now fully pricing in a 25 basis point (BoE) rate hike for the first time since February 27. While BoE expectations are hawkish, the policy divergence is more pronounced than ever with CME Group's FedWatch tool pointing to a 75% probability of a 50 bp rate hike at the next Fed meeting. AUD/USD The movement of the Australian pair is similar to that of the pound-euro pair. After falling to the level of 0.6570, the AUD/USD pair broke again and broke above 0.66, but did not hold and fell to the level of 0.6698. The Australian dollar fell to a four-month low on Wednesday as diverging interest rate expectations between the US and Australia sent local yields to their biggest discount to government bonds in nearly four decades. Source: finance.yahoo.com, investing.com

USD/JPY has tested the 38.2% corrective target at 138.17, which also happens to be close to the peak of wave iv of A, which came in at 138.18. This is enough to complete wave B and set the stage for wave C lower towards the equality target between wave A and C at 115.99. Short-term we need a break below minor support at 136.19 and more important, we need a break below support at 135.36 to confirm that wave B has completed and wave C is unfolding.   Relevance up to 06:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315434

USD/JPY bulls committing to the price on the front side of the micro bull trend.  Bulls eye a break of the 200 DMA.  USD/JPY remains on the front side of the bull trend with the US Dollar still perched near a three-month high on Thursday. Traders have repriced a more aggressive pace of interest rate hikes in the wake of Federal Reserve chairman Jerome Powell's comments. Fed funds futures are now implying a 70% chance the Fed will raise rates by 50 basis points this month. This is up from just about 9% a month ago and favouring USD/JPY bulls as the following illustrates: USD/JPY H4 charts The 4-hour chart shows the bulls in control in and around the 200 DMA following a pullback into the Fibonacci scale.  USD/JPY H1 chart A meanwhile micro trendline has formed on the hourly chart and bulls appear to be committing to the price on the front side so far. 

The dollar held near a three-month high on Thursday, backed by a message from Federal Reserve Chairman Jerome Powell that interest rates will need to go higher and possibly faster. On the second day of his testimony before Congress on Wednesday, Powell confirmed his message, though he made a cautious point, saying that the debate over the scale and path of future interest rate hikes is still ongoing and will depend on the data. USD/JPY The yen pair has been in a downtrend since the beginning of the day. During the day, USD/JPY dropped from 137.2360 to 136.2230. Concerns about a deeper global economic downturn continue to weigh on investor sentiment, which in turn favors a safe haven for the Japanese yen (JPY) and puts some downward pressure on the major currency. Market concerns were further fueled by the latest Chinese inflation data, which showed that domestic demand remains weak and weakened hopes for a strong recovery in the world's second largest economy. However, any significant pullback in USD/JPY still seems elusive amid expectations that the Bank of Japan (BoJ) will remain dovish to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, recently stressed the need to maintain ultra-loose policy settings and said the central bank is not aiming for a quick turnaround from a decade of massive easing. Bets were further raised after the release of the final GDP print, which showed Japan's economy narrowly avoided a technical recession in the final months of 2022. EUR/USD The euro pair started the day with a drop from 1.0556 to 1.0542. After this decline, the EUR/USD pair started an upward move towards 1.0570. After this move, the EUR/USD pair fell to the level of 1.0562. EUR/USD remains close to monthly lows after the recovery faded near 1.0570 during the US session. The US dollar failed to pick up a new leg, but maintained its recent gains. The dollar looks solid as markets are priced at "higher for longer" US interest rates. Data released on Wednesday helped consolidate expectations. Market participants also see a more hawkish European Central Bank (ECB) as recent research points to a higher final rate. Thursday's economic report does not include first-tier reports for the eurozone and preliminary claims for US unemployment benefits. Markets will continue to weigh Powell's message as they prepare for non-farm payrolls. GBP/USD The beginning of trading in the GBP/USD pair started trading with the application to the euro. Then, still in the Asian session, it rose slightly. The cable pair recorded a significant increase at the beginning of the European session and exceeded 1.1880. Currently, the level of the GBP/USD pair is above 1.1870. A permanent rebound seems unlikely as buyers refrain from betting on sterling further strengthening due to policy divergence between the US Federal Reserve and the Bank of England, although BoE expectations are hawkish. AUD/USD The Australian pair traded in the 0.6580-0.6595 range at the beginning of the Asian session. Still in the Asian session there was a significant increase above 0.6610. After this surge, AUD/USD traded in the 0.6610-0.6615 range. At the time of writing, the Aussie pair is trading at 0.6612. The Australian dollar is trying to bounce back this Thursday after Tuesday's decline. The morning started with weak economic data from Australia in the form of building permits and private home permits for January. Both sets of data printed in line with estimates but reached levels last seen in January 2022. This deterioration in the housing and construction sectors is a reflection of the high interest rate environment created by the Reserve Bank of Australia (RBA). Source: investing.com, finance.yahoo.com

The Japanese yen is showing strength on Thursday. In the European session, USD/JPY is trading at 136.27, down 0.79%. Kuroda’s last hurrah After 10 years at the helm of the Bank of Japan, Governor Kuroda chairs his final policy meeting on Friday. Traditionally, BoJ governors have not made policy changes at their last meeting, and in all likelihood, Kuroda will not go out into the night with guns blazing. Still, Kuroda likes to keep the markets guessing and his tweak of the 10-year yield target range in December completely blindsided traders and jolted the financial markets. This has kept the markets on alert for Kuroda tweaking or even abandoning the BoJ’s yield curve control (YCC) policy. The bond market remains dysfunctional due to the YCC, even with the band widening in December. Governor-elect Ueda has stated that the current policy is appropriate, but this is to be expected at this sensitive time of changing the guard at the BoJ. Ueda will be under pressure right away to make changes to the YCC, and that could occur as soon as he takes over in April. Fed Chair Powell didn’t add anything new at a second day of testimony on Capitol Hill, but the markets have been scrambling since his hawkish comments to lawmakers a day earlier. Powell’s said that the Fed would accelerate the pace of interest rate increases if that was what the data dictated. The markets have fallen in line and have priced a 50-basis point hike at the March 22 meeting at 77% according to the CME Group, compared to 25% before Powell’s testimony on Tuesday. Powell’s hawkish stance has also fuelled expectations that the peak rate will be higher than expected. In December, the Fed projected a rate of 5.1%, but that is clearly out of date. The markets have priced in a peak rate of around 5.5% and Blackrock, the world’s largest asset manager sees rates peaking at 6%. Currently, the benchmark rate stands at 4.75%.   USD/JPY Technical 136.06 is under pressure in support. 13502 is next 136.86 and 1.37.90 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

After reaching the target level on the hyperchannel line on Wednesday, the price retreated by about 175 pips. The signal line of the Marlin oscillator approached the zero neutral line, now it shows the intention to reverse from it to the upside. If this happens, the price can overcome the resistance around 137.80 and it will climb higher to reach the 138.90 and 140.90 targets. On the four-hour chart, the price reversed from the lower limit of the hypothetical upward local price channel. The Marlin oscillator turned sharply upwards and forcefully entered the area of the uptrend. The price is already returning above the MACD indicator line (136.82). Retreating below the signal level of 135.38 would make it possible to develop an alternative scenario with the 134.05 target - support of the embedded line of the price hyperchannel and the low of February 24. But this option is already unlikely.   Relevance up to 03:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337207

Summary:  Bank of Japan Governor Kuroda’s last meeting ended without any surprises as policy settings were left unchanged. While incoming data will be key to watch for what tweaks the next governor Ueda can bring, the near-term focus shifts to US data on non-farm payrolls and inflation, as well as the extent of fallout in the US banking sector as the market appears to be a panic mode after SVB’s hasty fundraising. Kuroda’s parting message lacked sparks The Bank of Japan kept its policy unchanged at Governor Kuroda’s last meeting of his decade-long tenure. The target band for the 10-year JGB yield was kept unchanged at around 0%, with an upper limit of 0.50% after being raised in December. The BOJ held its short-term rate at -0.1%. Although data and recent communication had hinted at no change in monetary policy, there were some apprehensions given Kuroda is famous for giving surprises to the market. However, the outcome carried his usual dovish tone, ensuring a smooth handover to incoming Governor Kazuo Ueda who has conveyed policy continuity in his first remarks after being nominated. Growth and inflation dynamics do not support the case for immediate policy tweaks The BOJ still stays on the transitory camp for inflation, with today’s statement again highlighting that cheap energy and fading hit from import prices will slow inflation, although it adds that prices will pick up again due to rising wages and changing expectations. Ueda has also signalled a similar narrative, suggesting that he does not see Japan’s inflation as structural or sustainable. Recent data has also shown some softening in Tokyo CPI for February, mainly due to government subsidy measures to keep utility bills from going through the roof. Further measures from PM Kishida to ease cost of living pressures may continue to point towards easing inflation pressures, but wages are being pushed higher as well as companies announce wage hikes on political push, and the evolution of both wages and inflation will be key to watch to gauge how BOJ policy can change under the new Governor. Meanwhile, growth momentum is weakening and the BOJ policy sounded a caution on exports and production although the overall economic assessment was left unchanged. Still, the recent downside surprises in GDP growth, household spending and wage growth continue to suggest that it will be tough for the BOJ to pare stimulus in the near future. Market entering panic mode While the BOJ stayed short of invoking market fears, other global developments have been pointing towards a risk of crisis. Silvergate Capital Corp.’s abrupt shutdown and SVB Financial Group’s hasty fundraising have sent the US banks and the KBW Bank Index plummeting. This together with the expectation of faster tightening from the Federal Reserve and the deepest inversion of the Treasury yield curve is invoking concerns of a deep incoming recession. Source: Bloomberg, Saxo Key concerns stem from the reason SVB gave for needing to raise capital – startups pulling out cash deposits. This is mainly driven by venture-backed technology and health-care companies that went public last year, and questions are now being raised if SVB is just the tip of the iceberg as higher interest rates continue to push valuations lower presenting broader risks for lenders. The MSCI Asia Pacific Index dropped as much as 2% on Friday, dragged down by financial shares, keeping the risk-off sentiment alive. China reopening is also still in its early stages and data has been mixed, suggesting lack of catalysts to continue to drive a recovery, and Chinese stocks erased most of 2023 gains in light of the deteriorating risk sentiment. Japanese equities also slipped by 1.5% despite the ultra-loose monetary policy conditions being maintained. Overall sentiment appears fragile with equities plunging and rate hikes getting priced out as investors flock to bonds in a bid for safe havens. Yen direction unclear Domestically, the incoming growth and inflation data, including the outcome of the spring wage negotiations, remains key to watch to assess if Ueda could consider policy normalization, given that he exhibited an openness to being flexible in addition to his message on policy continuity at the testimony last month. Still the message on flexibility was more directed towards responding to market disorders, and there is unlikely to be a pressing need for policy tightening unless inflation takes an ugly turn again. This means the forthcoming data from the US, particularly the NFP jobs data and the February CPI, will be key to cement the case for a 50bps rate hike from the Fed this month and the primary driver for the Japanese yen in the short run. The base case remains for the data to remain hot, and even if we still get a 25bps rate hike in March, the possibility of the dot plot being revised upwards is high. This could push USDJPY towards the 140 mark. However, the added concerns over the US banking sector spurring broader risk aversion could bring the yen support in focus. Depending on how far the SVB fallout extends, the yen’s safe haven bid could return and USDJPY could fall. Japanese stocks could remain interesting as monetary policy stays loose, provided the deterioration in global risk sentiment is contained.   Source: Macro Insights: Bank of Japan on hold – yen at the mercy of US data and risk sentiment | Saxo Group (home.saxo)

USD/JPY has turned sideways around 136.65 as investors await US NFP for further guidance. BoJ Kuroda continued expansionary monetary policy as the domestic demand and wages have failed to spur inflation. The RSI (14) is gathering strength for shifting into the bullish range of 60.00-80.00. The USD/JPY pair is displaying a volatility contraction around 136.65 after sheer volatility inspired by the continuation of an ultra-easy monetary policy by the Bank of Japan (BoJ). BoJ Governor Haruhiko Kuroda continued expansionary monetary policy as the domestic demand and wages have failed to spurt inflation in the Japanese economy. The US Dollar Index (DXY) is gathering strength in extending its recovery above the immediate resistance of 105.35. The USD Index has been extremely quiet as investors are awaiting the release of the United States Nonfarm Payrolls (NFP) data. S&P500 futures are continuously accelerating losses as fears of aggressive interest rates by the Federal Reserve (Fed) are skyrocketing. Meanwhile, the demand for US government bonds is soaring, which has trimmed the 10-year US Treasury yields further below 3.82%. On an hourly scale, USD/JPY has rebounded firmly from the upward-sloping trendline plotted from March 06 low at 135.37. The asset has extended its recovery above the critical resistance of 136.45, which has turned into support for the US Dollar bulls. The recovery move in the USD/JPY looks full of strength as the asset has scaled above the 20-and 50-period Exponential Moving Averages (EMAs) at 136.40 and 136.55 respectively. Meanwhile, the Relative Strength Index (RSI) (14) is making efforts in shifting into the bullish range of 60.00-80.00. An occurrence of the same will trigger the upside momentum. Going forward, a break above the intraday high at 137.00 will drive the asset toward March 08 high at 137.90 followed by November 28 high at 139.43. Alternatively, a downside move below the intraday low at 135.82 will drag the asset toward March 01 low at 135.26. A slippage below the latter will expose the asset to February 24 low at 134.06. USD/JPY hourly chart  

The dollar index was steady on Friday, a rare spot of calm in volatile global markets ahead of key U.S. payrolls data later in the day, while the yen weakened after the Bank of Japan kept stimulus settings steady. The focus for today is the publication of the non-farm payroll (NFP) in the US with forecasts of 205,000. USD/JPY With the beginning of the trade, USD/JPY traded later at 136.00, but quickly bounced back to 136.75. In the following hours of the Asian session, the prices of the yen pair were above 136.50. At the beginning of the European session, the pair's exchange rate fell to the level of 136.25, but this time it managed to recover. At the time of writing, USD/JPY is trading above 136.95 but still below 137.00. In his last meeting as the BOJ Governor Haruhiko Kuroda left policy settings steady, in line with expectations, given the Japanese central bank adjusted the yield band as recently as December. Incoming BOJ Governor Kazuo Ueda has said the central bank must maintain its current ultra-easy policy for now until there are signs that inflation has sustained above BOJ’s 2% target EUR/USD The euro pair trading on Friday is quite mixed. In the Asian session, the EUR/USD pair was held just after 1.06 and above 1.0585. In the European session, the euro was both above 1.0605 and below 1.0580. At the time of writing, the EUR/USD pair is below 1.0590. The euro rises against the dollar after heavy losses at tech-focused U.S. lender SVB Financial and could extend its gains on potentially softer U.S. jobs data later. The euro gained some support this Friday morning thanks to slightly weaker dollar and better than expected German CPI data. Although the actual numbers were printed as forecast, the figure of 8.7% underscores heightened and persistent inflationary pressures in Germany. As Germany is the largest economy in the Eurozone, the inflation release acts as a proxy for the wider region, reinforcing hawkish sentiment on the part of the European Central Bank (ECB). To close the trading session from a EURUSD perspective, ECB's Christine Lagarde is due to speak and may reiterate the need to suppress inflation after today's German data. GBP/USD The pair of the pound, contrary to the euro, trades calmly. In the zajastj session, the cable pair held around 1.1930, but was mostly below this level. With the European session, the GBP/USD pair began to grow. The GBP/USD pair managed to get close to the 1.20 level, but did not maintain momentum and at the moment of writing the text is trading after 1.1977. Sterling rose on Friday after Britain's economy was shown to have grown by more than expected in January, further allaying fears of a recession. The Office for National Statistics (ONS) said Britain's economy expanded 0.3% month-on-month, after a drop of 0.5% in December. AUD/USD The movement of the pair Aussie equals and z is mixed. At the beginning of the Asian session, the AUD/USD pair fell towards 0.6570 and then increased towards 0.66. In the following hours, the Australian pair remained in the range of 0.6585-0.6595. After a surge, AUD/USD has fallen again and is now trading below 0.6590 Source: investing.com, finance.yahoo.com

The Japanese yen is trading at 1.36.83 in the European session, down 0.52%. USD/JPY fell 0.90% on Thursday but has recovered much of those losses today. Kuroda exits with a whimper Bank of Japan Governor Kuroda didn’t fire any final shots at his final meeting today. The BoJ maintained interest rates at -0.1%, where they have been pegged since 2016, and didn’t make any changes to its to yield curve control (YCC) policy. Traditionally, BoJ governors do not make waves at their final meeting, but there was an outside chance that Kuroda might buck the trend. Kuroda has surprised the markets in the past, most notably when he widened the yield curve band in December and jolted the markets. This time, Kuroda stayed on the sidelines and the yen responded with losses as some investors were disappointed that he didn’t tweak the YCC. Kazuo Ueda takes over as BoJ Governor next month, and there is growing speculation that Ueda will change forward guidance and tweak or even abandon YCC, as distortions in the yield curve are damaging the bond markets. Ueda may not press the trigger when he chairs his first meeting in April but is expected to shift policy in the coming months. The US releases its February employment report, highlighted by nonfarm payrolls, later today. The blowout January reading of 517,000 is widely seen as a blip, although the labour market remains surprisingly resilient, despite the bite of rising interest rates. The estimate for February stands at 205,000 and a wide miss of this figure on either side will likely shake up the US dollar.  A weak reading would fuel speculation of a Fed pivot and likely weigh on the US dollar, while a strong figure would support the Fed’s hawkish stance and should be bullish for the greenback. The Fed will also be keeping a close eye on wage growth, in addition to nonfarm payrolls. Average hourly earnings are expected to rise to 4.7% y/y in February, up from 4.4% y/y in January. Higher wages drive inflation higher and an acceleration in wage growth would complicate the Fed’s battle to curb inflation.   USD/JPY Technical 136.06 is under pressure in support. 13502 is next 136.86 and 1.37.90 are the next resistance lines This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  

The Bank of Japan kept all monetary policy parameters as they were in March, voicing dovish rhetoric. The regulator left the short-term interest rate on deposits of commercial banks at -0.1% per annum, the target yield of 10-year government bonds is about zero. In addition, the central bank has maintained the range within which the yield on 10-year government bonds can fluctuate—plus/minus 0.5%. We can say that the March meeting was of a "passing" nature, as the regulator voiced its usual rhetoric and retained all the parameters of monetary policy. But today was a notable event for the USD/JPY traders. The end of an era The fact is that today's meeting is the last under the leadership of Haruhiko Kuroda, who has led the central bank for the past 10 years. In such cases, they say "the end of an era"—and this is true, given that Kuroda consistently and throughout his entire term in office implemented a soft monetary policy. The Bank of Japan remains the only central bank in the world with negative interest rates. Loose monetary policy caused the Japanese currency to collapse to a 32-year low last year, forcing the Japanese authorities to intervene in support of the yen. Despite rising inflation in Japan, Kuroda remained true to his conviction to the end—for example, today, he again announced the readiness of the central bank to take further steps towards easing the monetary policy. At the same time, the head of the regulator stressed that the positive effects of soft monetary policy "far outweigh the side effects." During his press conference, Kuroda advised his successor to continue easing monetary policy "to encourage companies to raise wages." In fact, the main intrigue of the coming months lies precisely in this question: will Kuroda's successor maintain his course, or will he still decide on a gradual calibration? As you know, the Japanese parliament this week approved Kazuo Ueda as the next head of the central bank. He will head the Bank of Japan next month, on April 8, when Haruhiko Kuroda's term expires. The next meeting of the regulator's members (April 28) will be held under his leadership. Is Ueda a Kuroda 2.0? Ueda has repeatedly stated that he intends to continue to adhere to the large-scale monetary easing program of the Central Bank. In his opinion, the growth in consumer inflation is mainly due to rising import prices, not increased demand. He expressed confidence that price drivers "are likely to slow down soon" and inflation will fall below 2% by the end of this year. It's funny, but Ueda repeated word for word Kuroda's phrase that the advantages of the current monetary policy outweigh its disadvantages, at least for now. And yet, despite such a dovish mood, market participants are still preparing for the fact that the new head of the Japanese regulator will follow the path of policy normalization. Here it is necessary to emphasize one important nuance. Unlike Kuroda, Kazuo Ueda still allows the option of normalizing monetary policy parameters. On the one hand, Ueda repeated several times the thesis that today he does not question the policy pursued by the current head of the Bank of Japan. On the other hand, he noted that if trending inflation "strengthens significantly" and there is room for sustained achievement of the BOJ's target, the central bank may consider normalizing policy. At the same time, Ueda made it clear that if any changes are required in the future, these changes will be carried out slowly, consistently and smoothly: there will definitely be no sharp rate hikes in the spirit of the Fed. In general, the results of the March meeting of the Bank of Japan are rather symbolic – this is the last accord of Haruhiko Kuroda, who has been at the helm of the Central Bank since 2013. The market expectedly ignored Kuroda's rhetoric, who again repeated the usual theses. At the same time, we should not expect sharp movements and dramatic changes from Kuroda's successor, Kazuo Ueda. If he does decide to initiate any shifts in policy, it will not be until the second half of this year. Conclusions All this suggests that USD/JPY will follow the greenback for the foreseeable future, which, in turn, is gaining momentum against the hawkish statements of Fed Chairman Jerome Powell. The February Nonfarm Payrolls may strengthen the dollar's position, allowing buyers of USD/JPY to approach the borders of the 138th figure. From a technical point of view, the pair on the D1 timeframe is between the middle and upper lines of the Bollinger Bands indicator, above all the lines of the Ichimoku indicator, except for Tenkan-sen. The current fundamental background contributes to the development of the upward trend, but longs should be opened after buyers consolidate above the mentioned Tenkan-sen line, which corresponds to 136.60. The main target of the upward movement in the medium term is 138.00, which is the upper line of the Bollinger Bands on the daily chart.   Relevance up to 10:00 2023-03-11 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337265

The dollar weakened on Friday after U.S. labor data for February showed slower wage growth, suggesting an easing of inflation pressures may keep the Federal Reserve's pace of interest rate hikes modest and thereby reduce the greenback's appeal. USD/JPY The yen pair started trading this week at 135.9770. For the first two days, USD/JPY traded mostly below 136.00. After that, the yen pair rose and reached a trading high of 137.8850. After reaching the top, the pair turned down and the pair fell towards 136.00. The lowest trading level was recorded on the last day of trading at 134.1710. The USD/JPY pair traded at 135.0480 . In his last meeting as the BOJ Governor Haruhiko Kuroda left policy settings steady, in line with expectations, given the Japanese central bank adjusted the yield band as recently as December. Incoming BOJ Governor Kazuo Ueda has said the central bank must maintain its current ultra-easy policy for now until there are signs that inflation has sustained above BOJ’s 2% target. EUR/USD The euro pair started trading at 1.0632. For the first two days of trading, the EUR/USD pair rose towards 1.0695, but failed to maintain momentum and plummeted below 1.06. After this drop, the euro remained below 1.06 for the next trading days, reaching its lowest level at 1.0529 on Wednesday. Despite the low level below 1.06, the pair was increasing its level day by day. The highest level was recorded by the EUR/USD pair on the last day of trading and it managed to exceed the level of 1.07 (1.0701). The trading session closed at 1.0643 . Moreover, the hawkish tone of Powell's comments also seems to have an impact on expectations of interest rate hikes by the European Central Bank (ECB). The ECB is scheduled to meet on Thursday, March 16 ahead of the Fed, which begins its meeting next week on March 22. GBP/USD The cable pair started trading at 1.2033. For the first two days of trading, GBP/USD traded in the 1.2000-1.2050 range, but failed to maintain momentum and plummeted below 1.19. After this decline, the pound pair remained in the range of 1.1810-1.1850 for the next trading days, and the lowest level was recorded in the range at 1.1812. The GBP/USD pair broke the high end of the range in the second half of Thursday and has been on the rise since then, crossing the 1.19 level. The highest level of the week was reached by the pair on the last day of trading at 1.21107. The closing of the trading session was at 1.2032. AUD/USD The Australian pair started the week trading at 0.6755. The AUD/USD pair was falling, but remained above 0.67 for the first few days. Already on Tuesday in the American session, the AUD/USD pair recorded a significant drop to levels below 0.66. Over the next few days, AUD/USD traded in the 0.6575-0.6625 range. The lowest level was also recorded by the Aussie pair in this range, at 0.6572. The highest level of the week was in the first trading days on Monday at 0.6771. The AUD/USD pair ended the week at 0.6584 . Weak economic data from Australia in the form of building permits and private home permits for January arrived this week. Both sets of data printed in line with estimates but reached levels last seen in January 2022. This deterioration in the housing and construction sectors is a reflection of the high interest rate environment created by the Reserve Bank of Australia (RBA). The Reserve Bank of Australia raised its cash rate by a quarter of a percentage point to 3.60% and said further monetary policy tightening would be needed. Source: finance.yahoo.com, investing.com

USD/JPY holds lower ground after refreshing a one-month bottom. U-turn from the DMAs, rejection of bullish channel and the strongest bearish MACD signals since early February to favor sellers. Early February tops may test Yen pair bears ahead of 50-SMA. Buyers remain off the table unless witnessing a clear break of 200-DMA. USD/JPY bears keep the reins for the third consecutive day heading into Monday’s European session. In doing so, the Yen pair seesaws around the lowest levels in one month, marked earlier in the day, as sellers poke the 134.00 threshold. A clear U-turn from the 200-DMA, as well as a downside break of the 100-DMA, joins a sustained downside break of a five-week-old bullish channel to favor USD/JPY sellers. On the same line could be the strongest bearish MACD signals since early December 2022. With this, the Yen pair appears all set to slump toward the 50-DMA support of 132.50. However, the early February swing highs near 132.90 seem to prod the USD/JPY sellers of late. In a case where the USD/JPY price remains bearish past the 50-DMA, the 130.00 round figure and the previous monthly low surrounding 128.00 will be in the spotlight. On the flip side, a convergence of the 100-DMA and the aforementioned channel’s lower line, close to 135.85, holds the key to USD/JPY pair’s recovery. Even so, the 200-DMA can test the upside momentum near 137.50 before directing prices towards the aforementioned channel’s top line, close to 139.50 at the latest. USD/JPY: Daily chart Trend: Further downside expected

Technical analysis: USD/JPY has been trading downside on Friday and I see that key Fibonacci support Agreement zone at 133.60 held this morning, which is good sign for the potential upside continuation. Due to the strong bullish trend on longer frames and test-reject of the key Fibonacci support zone, I see potential for the further upside continuation.... Upside objectives are set at 135.80, 137 and 137.80 Stochastic and MACD oscillators are showing bullish divergence and fresh bull cross, which is good sign for the further upside movement. Key support is set at the 133.60   Relevance up to 09:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315818

The dollar fell on Monday on heightened expectations the Federal Reserve will be less aggressive with monetary policy as authorities stepped in to limit the fallout from the sudden collapse of Silicon Valley Bank. The U.S. government announced several measures early in the Asian trading day, saying all SVB customers will have access to their deposits starting on Monday. Tomorrow’s US CPI report will make things interesting should inflation come in higher than expected, making the Fed’s task that much harder. USD/JPY The yen pair started the new week at the level of 134.8590 and in the first trading hours it was in the range of 134.25-134.75. USD/JPY then started a dip towards 133.75 but rebounded back to near 134.75. In the European session, USD/JPY fell again, but this time towards 133.00. At the time of writing, the yen pair is trading around 133.40. Concerns about the imposition of a global economic action continue to weigh on investor sentiment, which in turn favors a safe haven for the Japanese yen (JPY) and puts some downward pressure on the major currency. Both added further fueled by recent Chinese volume data, which appear to have left domestic demand weak and lowered on a strong recovery in the world's second-largest economy. However, any significant pullback in USD/JPY still seems elusive amid expectations that the Bank of Japan (BoJ) will remain dovish to support a fragile domestic economy. In fact, the new BoJ governor, Kazuo Ueda, recently stressed the need to maintain ultra-loose policy settings and said the central bank is not aiming for a quick turnaround from a decade of massive easing. Bets were further raised after the release of the final GDP printout, which showed Japan's economy narrowly avoided a technical recession in the final months of 2022. EUR/USD The euro pair started the day at 1.0686, but started falling. After the decline, the EUR/USD pair gained momentum and exceeded 1.07. In the following hours, the EUR/USD pair traded in the 1.0720-1.0730 range. In the European session, the euro fell again below 1.07 and at the time of writing trades above 1.0670. EURUSD rose overnight to a new monthly high of 1.0737 as the USD sell-off continued. At the European open, EURUSD pulled back slightly, flirting again with 1.0700 as markets scrutinize the SVB news and emergency measures taken by the US authorities to ensure confidence in the banking sector. Regulators have confirmed that the Bank's customers will have access to their deposits on Monday, while launching a new facility to give banks access to emergency funds.  EURUSD continues to look more favorable going forward as market participants dropped expectations for a 50bps hike by the Federal Reserve at its March meeting on Friday. This is in contrast to the European Central Bank (ECB), whose interest rate decision will be taken on Thursday, with consensus and market participants favoring a 50 basis point hike. GBP/USD GBP/USD started the day at 1.2077 and the first moves were similar to the euro. In the Asian session, the pair of the cable crossed the level of 1.2125, but did not maintain momentum and started a downtrend that is still ongoing. At the time of writing, GBP/USD is below 1.2075. AUD/USD The movement of the Australian pair is like the euro. AUD/USD started trading at 0.6633 and then fell towards 0.6600. After the decline, the Aussie pair rose and for the next hours of trading in the Asian session it was in the range of 0.6660-0.6670. In the European session, the AUD/USD pair started a downward move towards 0.6610. At the time of writing, the trading level of the Aussie pair was below 0.6620. The Australian dollar gained support on Monday morning after continued concerns over the collapse of the Silicon Valley Bank. The result was a dovish overestimation of Fed interest rates. Money markets have drastically reduced the potential for a 50bps towards a 25bps increment. Source: finanace.yahoo.com, investing.com

On Monday, the USD/JPY pair dropped 177 pips, breaking the support of the embedded price channel line at 134.05. As a result, the price was in a suspended state between this resistance of the trend line and the nearest support of the MACD line (131.10). If the price does not return above 134.05, by today or tomorrow, it might fall to 131.10. The signal line of the Marlin oscillator shows an intention to turn up, but it is still in the red, so hopes for further growth are based only on the fact that yesterday's decline below support was a false breakout. On the four-hour chart, the bulls' situation is not much better. Marlin turned up, but still in the red. The price seems to be optimistic and it might overcome the resistance of 134.05. Such a quick return shows that the previous decline was false. We are waiting for the development of events.   Relevance up to 04:00 2023-03-15 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/337470

USD/JPY is taking a pause on a corrective phase amid softer US Treasury yields. Surging borrowing costs are causing liquidity traps. US CPI data will pave the way for the next FOMC meeting.  USD/JPY rebounded after hitting the monthly low of 132.34. The short covering just comes ahead of the US Consumer Price Index (CPI) release. The corrective downfall in USD/JPY was started earlier this week on the back of falling US Treasury bond yields. The Silicon Valley Bank’s (SVB) fallout has prompted investors to revisit their rate-hiking expectations about the Federal Reserve's (Fed) plans to increase interest rates during the March FOMC meeting., which was surging exponentially prior to the last Nonfarm Payrolls (NFP) release.  When borrowing costs increase, it's natural for highly leveraged businesses to experience pressure in repaying their debts. The recent rise in US Treasury bond yields, which reflects the lending rates in the US economy, has resulted in a decrease in the value of US government bonds purchased during a low-yield market period. Therefore, the credit side has loosened the original value amid surging yield and a liquidity trap is emerging among the businesses. Fundamentally, this situation is quite similar to the UK’s bond market incident that happened a while ago, where the pension funds have struggled with liquidity. Since the Fed commentary is muted for further clarity on the underlying US financial ecosystem, investors are refraining to put fresh bets on risky assets. Meanwhile, US Consumer Price Index (CPI) is on the cards. The market is expecting a slightly downbeat CPI release from prior releases on Tuesday. As it is always said “devil in the details”, market participants will likely jump to the service-led inflationary portion, since the Fed has made concerns regarding this in many instances.

The dollar rose in somewhat calmer trading on Tuesday after collapsing on Monday following the collapse of Silicon Valley Bank (SVB) as investors waited for the release of US consumer inflation data later in the day. Tuesday's data on the Consumer Price Index (CPI) could potentially fuel further volatility in global markets, coming a day after fears of a potential banking crisis caused traders to quickly lower their expectations of a Federal Reserve rate hike. Over the weekend, US authorities took emergency action in response to the collapse of the SVB, promising depositor protection to bolster bank confidence. US President Joe Biden on Monday announced measures to ensure the security of the banking system. USD/JPY The yen pair started the day at 133.0870. The USD/JPY pair rose towards 134.00 in the first hours of trading, but failed to maintain momentum and fell towards 133.25. From then on, USD/JPY traded around 133.50 until the end of the Asian session. In the European session there was an upward impulse and the yen pair breaks through 134.00. At the time of writing, USD/JPY is above 134.10. EUR/USD The Asian session for the euro pair, which started Tuesday's session at 1.0727, was bearish. At the end of the Asian session, EUR/USD fell below 1.07. The European session brought an upward impulse to the EUR/USD pair and the trade rebounds above 1.07 again. The euro is trading cautiously this morning which is to be expected as markets prepare for the upcoming US CPI report. Meanwhile, markets are also trying to figure out whether SVB collapse will influence the European Central Bank's (ECB) rate decision later this week. ECB policymaker Yannis Stournaras said on Tuesday that he does not see any impact from the collapse of Silicon Valley Bank (SVB) on Eurozone banks. Although the ECB is in quiet period, the Euro could stay resilient against its rivals in case other ECB policymakers deliver similar comments. GBP/USD The cable pair started Tuesday's session at the level of 1.2168 and, just like the euro pair, was in a downward move in the Asian session. Towards the end of the Asian session, the GBP/USD pair got a strong upward impulse towards 1.2180. In the European session, the pound pair again started to fall towards 1.2150. At the time of writing, GBP/USD is trading above 1.2160. Early Tuesday, the data published by the UK's Office for National Statistics showed that the Unemployment Rate remained unchanged at 3.7% in three months to January. More importantly, annual wage inflation in the three months to January, as measured by Average Earnings Including Bonus, declined to 5.7% from 6% in December. Similarly, Average Earnings Excluding Bonus retreated to 6.5% in the same period from 6.7%. AUD/USD The Aussie pair started trading at 0.6656 and like the European pairs the first move was down. Still in the Asian session, the AUD/USD pair rebounded and grew towards 0.6672. The upward momentum was not maintained in the European session and the pair of the Australian pair started a downward move towards 0.6645. At the time of writing, AUD/USD is trading at 0.6651. Most Asian currencies weaken against the USD in the morning session amid higher Treasury yields. Source: investing.com, finance.yahoo.com

As the USD/JPY currency pair finds itself comfortably within the 145-150 FX intervention zone, market participants are closely monitoring the potential actions of the Bank of Japan (BoJ). This range has historical significance, as it was the level at which the BoJ executed substantial intervention last September and October, selling $70 billion to influence the exchange rate. However, the current landscape suggests that Tokyo authorities are taking a more cautious approach, refraining from immediate intervention despite the ascent of USD/JPY driven by rising US Treasury yields. An important factor playing into this restraint is the substantial influence of US Treasury yields on the USD/JPY exchange rate. The authorities in Tokyo appear to be allowing the impact of these yield-driven dynamics to play out before deciding on any direct intervention measures. Additionally, the market conditions at present contribute to the hesitancy in FX intervention. The one-month USD/JPY traded volatility remains below 10%, in stark contrast to the levels of 14-16% observed during the BoJ's intervention in the previous year.   JPY: In the intervention zone USD/JPY is now comfortably trading in the 145-150 FX intervention zone - levels where the Bank of Japan (BoJ) sold $70bn last September and October. It seems that Tokyo authorities are keeping their powder dry for the time being - not wanting to fight the US Treasury-yield driven rise in USD/JPY. Also arguing against FX intervention for the moment are seemingly orderly market conditions, where one month USD/JPY traded volatility remains sub 10% - compared to levels of 14-16% when the BoJ intervened last year.  In other words, FX intervention may not be imminent and a larger trigger for a JPY rally would probably be some kind of sharp risk asset correction perhaps driven by those surging US Treasury yields.