Daily Market Report

[FOREX.com]

US dollar doldrums shakes markets, ASX 200 still looks rosy: Asian Open March 11th 2024​

By : Matt Simpson, Market Analyst

Market Summary:​

• The US dollar suffered its worst week of the year, following dovish comments from Jerome Powell and a relatively weak Nonfarm payrolls report
• Jerome Powell made the first real mention of rate cuts during his testimony to the House Committee, the US unemployment rate rose to a 2-year high of 3.9% and January’s job-growth figure was revised lower to 167k
• Whilst 275k jobs were added in February, the NFP report was furtherer evidence of a potential turning point in the US economy
• The US dollar index fell for a sixth day, although it did print a bullish pinbar as prices recovered ahead of the weekend as bears presumably booked profit
• And with the US dollar literally being thrown overboard last week, it leaves the potential for a bounce unless CPI data this weeks comes in softer
• And gold has more than loved the rally, rising for seven consecutive days and reaching yet another record high
• Crude oil price action is on the ‘fugly’ side, and not a market I feel compelled to pick a direction on tight now given its choppy price action on the daily chart an inability to hold above $80. If I had to pick ‘a side’ then it would be bearish, but it doesn’t make much sense with the fundamentals. Hence the call to step aside.
• The S&P 500 and Nasdaq 100 enjoyed very brief record highs on Friday before forming bearish outside days at their record highs

Click the website link below to get our exclusive Guide to index trading in 2024.

https://www.forex.com/en-us/market-outlook/

Events in focus (AEDT):​

• 10:50 – Japan’s GDP, capex, private consumption, price index, M2 money supply
• 17:00 – Japan’s machinery tool orders
• 01:00 – US employment trends index (Consumer Board)
• 02:00 – US 1, 3 and 5-year inflation expectations (New York Fed)
• 04:00 – UK member Mann speaks

ASX 200 at a glance:​

• The ASX 200 cash index rose for a third week and closed at a record high, with 7900 seemingly with easy reach for bulls (the upside target projected from an inverse head and shoulders pattern on the daily chart)
• 8 of its 11 sectors advanced last week, led by finance and real estate – likely given renewed bets of central banks cutting interest rates
• I still suspect a move to 7900 is on the cards for the ASX, although the potential for a deeper pullback on Monday seems feasible
• Should prices retrace lower, bulls could seek evidence of a swing low around the prior congestion zone, particularly if support is found around its own VPOC near 7766

US dollar index technical analysis:​

The RSI (2) indicator reached its most oversold level since July 2023 on Friday. That doesn’t necessarily mean it is oversold, but it should at least be considered by those wanting to wade into USD short positions this week. Furthermore, a bullish pinbar formed and its daily volume was the highest in nearly four weeks, so it could suggest a ‘change in hands’ between sellers to buyers. Not bottom picking is neither pretty or always timely. But given Friday’s low formed above a high-volume node, I would personally see any dips towards 102.20 as a reason to at least look for evidence of a swing low. And if buying USD is not the preference, perhaps bears could step aside until evidence of a swing a swing high form on the daily timeframe.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

 

[FOREX.com]

AUD/USD, ASX 200 pause for breath ahead of US CPI: Asian Open March 12th 2024​

With traders eager to price in Fed cuts, today’s US CPI could bolster the US dollar and see AUD/USD and the ASX 200 pull back further if the data comes in too hot.

By : Matt Simpson, Market Analyst

Market Summary:​

• The Fed are to begin cutting interest rates in June according to a Reuters poll, although there are risks that a sooner cut could also mean fewer cuts
• The BOJ are considering a rate hike in their March meeting according to ‘sources’ via Reuters
• BOJ member Keidanren said that a prolonged monetary easing “as a shot in the arm for economy is not healthy”
• Japan’s economy also narrowly avoided a technical recession after official growth figures were upgraded to a slight expansions in Q4. Yet with sluggish private consumption and GDP that remains below markets expectations, perhaps it is cause for concern for anyone expected the BOJ to actually hike this month.
• The Australian government announced that it will remove ‘nuisance’ tariffs on a wide range of every day goods in an attempt to help lower the cost of living
• The US dollar retraced slightly higher in line with my bias, although volatility for forex markets was sorely lacking during a light-news day, ahead of US inflation later today
• Bitcoin rose to a fresh record high new highs to notch up its fourth consecutive bullish day after printing a bearish engulfing candle (which is has since surpassed)
• Gold futures rose for a ninth consecutive day which itself is an outlier of a stat, so a I very much doubt it will rally over the next nine. But with large speculators having increased net-long exposure at their fastest weekly pace in 3.5 years last Tuesday, gold is clearly in demand and not a market to short for any length of time whilst traders expect Fed cuts

Click the website link below to get our exclusive Guide to AUD/USD trading in 2024.

https://www.forex.com/en-us/market-outlook/

Events in focus (AEDT):​

With US inflation data looming, volatility could again be on the quiet side leading up to the event. But with the US dollar already enduring its worst week of the year on bets of cuts, it could leave the US dollar vulnerable to a bounce if inflation doesn’t satisfy bets of anticipated cuts.

• 09:30 – RBA member Hint speaks
• 10:50 – Japan’s producer prices, large manufacturing survey
• 11:30 – Australian business confidence, building permits
• 18:00 – German inflation
• 18:00 – UK employment and wages
• 21:00 – US business optimism (NFIB)
• 23:30 – US inflation

ASX 200 technical analysis:​

• Clearly, my bullish bias for the ASX 200 did not work out well, with a large bearish engulfing day forming on the cash index on Monday
• It was the most bearish day in a year, although overnight the ASX 200 futures chart found support almost perfectly at the February high and bullish trendline.
• It will be interest to see how prices trade around these support levels as it provides a clear line in the sand for bullish or bearish setups.
• The inverted head and shoulders pattern remain in place with an upside target of 7,900, but only if prices remain above 7650.
• But if prices do break lower, bears could wait for a retest of the broken trendline as part of a swing-trade short

AUD/USD technical analysis:​

As mentioned in the AUD/USD weekly outlook, the bias on AUD/USD is for a pullback on the daily chart given the 2.7% rally over 3 days, RSI (2) being overbought and a bearish pinbar at the upper daily Keltner band. Whilst prices have pulled back slightly, volatility was low across the board so the correction may not be over yet. Besides, we have US CPI data later today which could see markets on the quiet side until the data is released.

The 1-hour chart shows that the retracement found support overnight almost perfectly at a prior swing high and 38.2% Fibonacci level. I therefore suspect a bounce higher today in Asia, but still open to another leg lower. The 50% level sits at 0.6573 and the 61.8% is near the 20-day MA ~0.6550, which make potential support levels or targets for bears.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

 

[FOREX.com]

AUD/USD holds 200 EMA post CPI, gold snaps 9-day winning streak: Asian Open March 13th 2024​

AUD/USD held above its 200-day EMA and shows the potential to bounce today, alongside gold - despite the fact it snapped its 9-day winning streak.

By : Matt Simpson, Market Analyst

The Jury remains out as to whether the Fed will cut in June or not. Economists and Fed fund futures backed a 25bp cut at their June 12th meeting, but I remain less convinced looking at the latest CPI report. Core CPI remains nearly twice the Fed’s 2% target and the monthly core CPI and CPI prints remain elevated at 0.4% and above their long-term averages. The numbers are not what I would call a disaster as it is reasonable to expect monthly fluctuations throughout the cycle, but it should come as a disappointment for those expecting more cuts to begin sooner.

Still, if there is a glimmer of hope for doves, it’s that Powell did actually mentioned cuts last week during his testimony to the House Committee. Traders will now want clarity over Powell’s stance, as he either needs to get behind ‘potentially talking about them’ or walk it back. Again. But with Fed fund futures implying a 62.4% chance of a June cut, they seem to be looking past this month’s CPI as a blip.

Market Summary:​

• Small-business optimism also came in softer than the US than expected, adding to hopes of an earlier Fed cut
• Yet Wall Street indices did the usual and danced to their own beat, with surge of Oracle’s share price seeing the Nasdaq lead the way higher and the S&P 500 rise to just 14 points below its all-time high
• The US dollar rose for a second day, although the USD index failed to hold above 103 and formed an inverted hammer on the daily chart, and EUR/USD closed flat with an indecision day
• US yields put up a more impressive show than the US dollar, with the 2-year rising above its 200-day EMA.
• USD/JPY snapped a 5-day losing streak and formed a 3-day bullish reversal pattern
• AUD/USD retraced to a 3-day low and formed an indecision day, and its daily low respected the 00-day EMA
• GBP/USD fell for a second day after weaker UK wages and employment data brought forward bets of a BOE cut, with some now calling for 100bp of cuts and for the central bank to begin before June

Events in focus (AEDT):​

• 08:45 – New Zealand food price inflation
• 18:00 – UK industrial production, manufacturing production, index of services, GDP m/m, trade balance
• 19:00 – China loan growth, social financing

ASX 200 technical analysis:​

The Australian market failed to track Wall Street higher with much enthusiasm overnight, looking at ASX 200 futures. But that doesn’t mean it cannot try and catch up today. A doji formed at the bullish trendline and above the February high, and the current day’s low is above the doji low. Furthermore, the 7900 target from the inverted head and shoulders pattern remain in play. The bias remains bullish above the 7600, although 7660 could also be used as a cutoff point for tighter risk management.

AUD/USD technical analysis:​

The Australian dollar played nicely with yesterday’s bias for an initial bounce ahead of its next leg lower. Yesterday’s doji respected the 200-day EMA, so another small bounce is due. A bullish divergence on RSI (2) has formed on the 4-hour chart, and the prior two candles closed back above the weekly pivot point, following false breaks of it. So today’s bias is a repeat of yesterdays; I suspect another bounce could be due – even if the risk of a break below the 200-day EMA remains. US yields put up a better show than the US dollar yesterday, so I am not convinced the USD correction higher has fully played out.

Bulls may want to seek dips towards the weekly pivot point for a move towards 0.6620. Although it remains up in the air as to whether there is enough appetite for it to simply break above the 4-hour bearish engulfing candle initially, given the lack of news in Asia today.

Gold technical analysis:​

US CPI data was too much for gold bugs to bear after a 9-day rally to its latest record high. It formed a bearish engulfing day which itself could be part of a 3-day reversal (evening star formation). The 4-hour chart shows prices pulled back nicely into the support zone around the weekly pivot point, previous record high and high-volume node. Given RSI (2) is oversold then, like AUD/USD, I suspect a bounce could be due today.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

 

[FOREX.com]

WTI crude oil looks set to break $80: Asian Open – March 14, 2024​

After several weeks of choppy trading conditions, momentum has turned higher on WTI crude oil and a breakout above $80 is on the radar.


By : Matt Simpson, Market Analyst

Market Summary:​

• The US dollar index retreated in line with yesterday’s bias as traders are still betting on a June rate cut by the Fed, although volatility was relatively low for FX majors on Wednesday
• Silver rose nearly 4% during its best day in three months and is on track to close around $25
• Wage-growth negotiations improve the odds that the BOJ could indeed ditch negative interest rates at next week’s meeting, on the news that large corporations have agreed to union demands of higher wages
• Yet the fact the yen actually weakened slightly suggests the wage negotiations were already priced in, leaving it now a question of whether a simple hike to 0% could have little impact on markets given the yen rose across the board last week
• A combination of the weaker US dollar and news that China plans production cuts for copper helped the metal break convincingly above $4 during its best day in 16 months
• And that brings into question whether a supply-shock for copper prices could be enough to trigger another round of inflation
• Ukrainian drone strikes on Russian refineries sent crude oil prices soaring on Wednesday, with prices settling just below $80 – a key level of resistance for bulls to conquer. Given the potential for further weakness on the US dollar, a breakout remains the bias whilst prices remain above the 200-day MA.
• And this helped metals in general perform well, with gold bouncing in line with yesterday’s bias although the question now is whether it will hold beneath its highs and recycle lower, or simply break above the high
• And a move that further cause tension between the US and China, the US House passed a bill that could either force a TikTok sale or ban it in the US
• Australian Treasure Jim Chalmers is expected to warn of a smaller revenue upgrade for the Federal budget later today, due to softening labour markets and falling commodity prices

Click the website link below to get our exclusive Guide to oil trading in 2024.

https://www.forex.com/en-us/market-outlook/

Events in focus (AEDT):​

We have a quiet calendar for APAC traders today, although any developments on China’s curb of copper output might carry some headline risk for metals. Also keep an eye on China’s loan growth, as Beijing will want to se it come in higher to help them achieve their 5% GDP target for 2024.

The main event is hands down the trifecta of US producer prices, retail sales and jobless claims. With traders will betting on Fed cuts, they will want to see all three show signs of weakness, yet the contrarian with in suspects producer prices could follow CPI higher and, and with retail sales expected to rise 0.8% (which is relatively high) it might take quite a miss to justify a notable reaction.

08:45 – New Zealand visitor arrivals

• 10:50 – Japan foreign bond/stock purchases
• 18:30 – Swiss PPI
• 19:00 – Spanish CPI
• 20:00 – International Energy Agency report
• 20:30 – ECB’s Elderson speaks
• 21:00 – China loan growth
• 23:30 – US producer prices, retail sales, jobless claims

WTI crude oil technical analysis:​

Price action on the daily chart has been grinding higher since the December low. Over the past 4-5 weeks, price action has been particularly choppy between 76.50-79.50 with a few failed attempts to break and hold above $80. But by including a line chart over this period (blue line), I see a potential falling wedge / pennant on the daily chart, followed by bullish range expansion on Wednesday. RSI (14) is also curling higher from the 50 level to show a pickup of bullish momentum in the positive zone of RSI.

The only thing I do not like is that yesterday’s bullish range expansion day was on relatively low volume. Therefore any break above $80 likely need to be accompanied with rising volume for it to stand any chance of extending its rally. But with a weaker US dollar story alongside rising geopolitical tensions, a break above $80 is the preferred bias whilst prices remain above the 200-day MA.




-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge


The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

 

[FOREX.com]

USD bears scramble, USD/JPY eyes breakout after US data: Asian Open March 15th 2024​

US dollar bears scrambled for cover following hot US economic data ahead of next week’s Fed meeting, helping USD/JPY rise to a 5-day high and eye a potential breakout today.

By : Matt Simpson, Market Analyst

If anyone was sat on the fence regarding Fed policy after the hotter-than-expected CPI report earlier this week, surely Thursday’s hot producer prices tipped them over the edge towards no imminent Fed hike. Not according to Fed fund futures, which are still pricing in a June hike with a 57.3% probability.

PPI rose at its fastest pace in six months at 1.6% y/y, above 1.1% expected and the prior month was upwardly revised to 1% y/y (0.9% prior). Core PPI rose 2% y/y, above 1.9% expected or 2.8% y/y less food, energy and transport. Consumers added insult to hawkish injury with retail sales rising 1.3% y/y, although core retail sales only rose 0.3% m/m compared with 0.5%. Still… Thursday’s data alongside higher levels of consumer inflation, core CPI nearly twice the Fed’s 2% target, a June hike seems unlikely to me.

The Fed meet next week and release updated forecasts. The December dot plot had a median estimate of 3 hikes this year, which seems unlikely. So there is a real chance that the median could drop to 2 or even 1 hikes, and that could light a match under the US dollar’s bull fire.

USD dollar index technical analysis:​

Bears were quick to scramble when the US data arrived, helping the US dollar index enjoy its best day in 22. Incoming data and the Fed’s tone will ultimately decide how much upside potential there is left for the US dollar bull case, but for now I am cautiously bullish, taking into consideration resistance levels nearby.


Bulls could seek dips within Thursday’s range for cheeky longs, keeping an eye on the 20-day EMA and trend resistance for potential resistance / targets ahead of the weekend. And then we can reassess nest week around the FOMC meeting.

Market Summary:​

• The US yield curve rose for a fourth consecutive day and the US 2-year is less than a day’s trade away from its 200-day average. The entire curve form the 1-year to 30-year exceeded its 1-year average up day.
• Clearly, this means the US dollar was the strongest of the session whilst AUR/USD and EUR/USD were the weakest.
• GBP/USD reached my bearish target outlined yesterday, to complete the rising wedge formation on the 1-hour chart.
• USD/JPY rose to a 5-day high on route to my 149 target, although it remains debatable as to whether it will have the juice to reach that level by the weekend given FOMC and BOJ meetings are pending (subject to profit taking). But it could see some upside today.
• AUD/USD closed beneath its 200-day EMA and below 66c during its worst day in two weeks
• Gold has held up surprisingly well, and remains above its prior record high of 2146.79. It seems that gold has at least entered a period of consolidation, as things are getting choppy at the top – not a market I’d like to be long at but would be keeping tabs on potential shorts.
• WTI crude broke above $80 in line with yesterday’s bias, despite the stronger US dollar. However, once again we see lower daily volume which makes me feel a tad uneasy.
• Wall Street indices were broadly lower with the Dow Jones and S&P 500 forming a prominent bearish engulfing days, and whilst the Nasdaq was lower it held above its 20-day EMA.

Events in focus (AEDT):​

• 08:30 – New Zealand PMI
• 11:00 – Australian inflation expectations (Melbourne Institute)
• 12:30 – China house prices
• 15:30 – Tertiary Industry Activity Index
• 21:00 – China new loans, social financing, M2 money supply
• 23:30 – US import prices, NY Empire State Manufacturing
• 23:30 – Canadian wholesale sales
• 00:15 – US consumer sentiment, inflation expectations (Michigan University)
• 00:15 – ECB Lane speaks

Click the website link below to get our exclusive Guide to USD/JPY trading in 2024.

https://www.forex.com/en-us/market-outlook/

USD/JPY technical analysis:​

The stronger US dollar helped USD/JPY continue to mean revert higher against the ‘BOJ hike’ bets of last week. A series of higher lows has formed on the 1-hour chart and prices broken out of a sideways channel and above the weekly pivot point. Resistance was met at the Feb 8 high, but I see the potential for another crack higher today – and if a rally is clean it could reach the 149 target outlined earlier in the week. However, as we approach the weekend be aware of mean reversion as ‘profit taking’ ensues.

Today’s bias remains bullish above 148, so any dips towards it could enable bulls to enter on anticipation of a breakout above 148.30. The volume node and 148.75 and 149 are upside targets.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge


The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

 

[FOREX.com]

AUD/USD weekly outlook: RBA, AU employment at the helm. March 18th 2024​

​

AUD/USD, AUD/JPY, GBP/AUD and AUD/CHF could get caught on the crossfire between the RBA, BOJ, FOMC, BOE and SNB meetings this week.

By : Matt Simpson, Market Analyst

Central Bank meetings will be the key driver for markets this week:​

The BOJ, RBA, Fed, BOE and SNB on the roster. And that means volatility is likely to be low on Monday (unless a fresh catalyst arrives) as it is on the eve of the BOJ and RBA interest rate decisions. The same could be said for Wednesday, ahead of the FOMC meeting.

BOJ interest rate decision: Markets favour a hike​

There is lot of anticipation over whether the BOJ will finally ditch their negative interest rate policy on Tuesday. Unfortunately, we do not know the time they will announce their decision. But it could certainly prompt some volatility if they surprise with a more aggressive hike or none at all (markets current expect ~60% chance of a 10bp hike to 0%). And that means traders need ot keep an eye on AUD/JPY in particular as it could get caught in the crossfire of the BOJ and RBA.


Click the website link below to get our exclusive Guide to AUD/USD trading in 2024.

https://www.forex.com/en-us/market-outlook/

RBA expected to hold, but will it retain a hawkish bias?​

The RBA surprised a few of us by retaining their slightly hawkish bias in their February statement. Inflation is lower, consumer spending and growth are slowing. So what gives? The RBA still think inflation is too high, and they remain reluctant to announce a victory on inflation, particularly when the Fed retain a higher interest rate and it remains unclear as to when they may hike.

And until they remove from the final paragraph of the statement that “a further increase in the interest rate cannot be ruled out”, the RBA appear set to hold at 4.35%.

Ultimately, the RBA are unlikely to get too dovish too soon. They were the last major central bank to join the hiking party and have the lowest cash rate among the major central banks. If they were to lead the pack and lower rates sooner, they could inadvertently weaken the Australian dollar and import inflation they’re trying to control.

All eyes on the FOMC (particularly the dot plot and press conference)​

It is all but a given the Fed will hold rates. Yet markets are still favouring a June cut despite hotter CPI and PPI reports surfacing this week. So next week’s meeting is really about whether the Fed will stick to the three 25bp cuts indicated in the median Fed rate forecast (which would likely be bullish AUD/USD via a weaker US dollar and risk-on appetite), or will they lower the median forecast to or even 1 cut, send the US dollar higher to weigh on risk and of course AUD/USD.

And Jerome Powell may face some tough questions at the press conference if the median rate is lowered to two cuts, given he told the House Committee that the Fed may be close to discussing cuts ahead of stronger CPI and PPI data.

Australian employment report​

This month’s labour force report loses some of its potency, as it arrives two days after the RBA meeting. Still, cracks are slowly widening in the employment figures so a case to easy is gradually building. Unemployment rose to a 2-year high of 4.1% in January, so any advance here simply echoes calls for an earlier cut. Also keep an eye on job growth figures, because a mere 500 jobs were added in January according to the ABS, which does little to make up for the -62.7k figure on December (which was actually -106k full-time, propped u by a rise in part-time jobs).

In case you were wondering how AUD/USD performs in the days around the employment report, we’ve crunched the numbers. Using data since 2007, AUD/USD has averaged positive returns on employment day and negative returns the day after. The three days prior have generated negative average returns.

AUD/USD technical analysis:​

The Australian dollar fell for a second day, although its daily range on Friday was roughly half that of Thursday to show bearish momentum is waning. RSI is close to (but not quite at) the oversold level, and the 61.8% Fibonacci is close by for potential support. Given Friday’s ‘bullish’ range for the US dollar index was on Friday the smallest in several years, it further suggests downside potential for AUD/USD could be limited at the beginning of the week. Especially since it closes on its 200-day average on Friday.

Perhaps it can bounce from current levels, although I doubt it will make a break above 66c unless the RBA is surprisingly hawkish of a fresh catalyst arrives. At which point, it will likely be down to the hawkishness of the FOMC meeting as to whether AUD/USD can sustain any early week rally, or simply break below its 200-day MA is a USD rally extends post meeting.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

 

[FOREX.com]

AUD/USD, USD/JPY in focus for RBA and BOJ meetings: Asian Open March 19th 2024​

1-day implied volatility for USD/JPY has risen to 320% of its 20-day average ahead of today's BOJ meeting, to show volatility is expected. And the best chance of AUD/USD enjoying its own volatility is if the RBA finally ditch their hawkish bias.

By : Matt Simpson, Market Analyst

Market Summary:​

• Alphabet shares rallied as much as 3.3% on Monday on the news that the company is in talks with Apple to supply Gemini AI to smartphones – which is the latest indication that Apple’s AI is behind the curve
• The Nasdaq 100 led gains on Wall Street with the S&P 500 up ~0.8%, although none of the cash indices are yet to retest their record highs ahead of the FOMC meeting
• Gold prices gently fell to a 7-day low on Monday although support was found at the previous ATH, allowing prices to form a potential pennant (usually a continuation pattern). Although with a BOJ and FOMC meeting looming, volatility can be expected and prices really could break in either direction this week
• WTI crude oil prices rose to a 1-month high to keep the $84 upside target alive and well, thanks to lower oil output from Saudi Arabia and Iraq
• USD/JPY rose for a fifth day ahead of today’s all-important BOJ meeting, where expectations are now for the BOJ to hike rate to 0% and abandon YCC (yield curve control)
• USD/JPY reached my upside 149 target on Friday after a textbook pullback to 148 ahead of the US open
• The US dollar index rose for a third day as markets seem to be slowly coming around to the potential that the Fed won’t signal 3 rate cuts in their forecasts (like they did in December)
• However, trend resistance from the February high could cap gains on the US dollar index as we approach the Fed meeting (although today’s BOJ meeting could prompt some volatility and see it break higher of the BOJ do not change policy)

View related analysis:

AUD/USD weekly outlook: RBA, AU employment at the helm

Central Bank galore with BOJ, Fed, BOE, SNB and RBA on tap: The Week Ahead

GBP/USD hints at sentiment extreme ahead of BOE, FOMC: COT report

Events in focus (AEDT):​

The RBA and BOJ are set to announce their monetary policy decisions today. The RBA is likely to be the easier of the two, as they tend to announce at a prescheduled time. No change is expected, and if there is to be any surprise it would need to be the removal of their slight tightening bias in the last paragraph. And that leaves the BOJ interest decision as the clear headline event.

• 13:00 – Australian inflation expectations (Melbourne Institute)
• 13:30 – BOJ interest rate decision (times may vary, quite considerably)
• 14:30 – RBA interest rate decision, rate statement
• 15:30 – Japan capacity utilisations, industrial production
• 17:30 – BOJ press conference
• 21:00 – German / Eurozone ZEW economic sentiment

Click the website link below to get our exclusive Guide to USD/JPY trading in 2024.

https://www.forex.com/en-us/market-outlook/

AUD/USD technical analysis:​

The Australia dollar retraced lower for a third day, although its daily % high-low range was the second lowest of the year (behind January 1st). The 1-hour chart shows that support has been found at a 61.8% Fibonacci retracement and prices are meandering around the 200-day average, and oscillating within a sideways channel (usually a continuation channel which implies a downside break).

RSI (2) reached overbought, although a bullish divergence has not formed. The 1-day implied volatility band hints at a relatively low volatility day for an RBA meeting, which itself shows options traders are not expecting fireworks.

Ultimately, for AUD/USD to move decisively lower likely requires the RBA to remove their slight hawkish bias and could send prices below the 61.8% Fibonacci level, and bring 0.6520 and 0.6500 into focus for bears. Also keep in mind the BOJ meeting which could further weigh on AUD if volatility erupts across assets and prompts a risk-off environment.

If the RBA meeting is a non-event, perhaps prices can bounce from current levels. Although as the week progresses, I’ll look for evidence of a swing high as my bias is for the Fed meeting to not be as dovish as markets originally anticipated.

USD/JPY technical analysis:​

The retracement higher on USD/JPY has recouped around two-thirds of its losses the five days prior, having met my upside 149 target stalling around the 61.8% Fibonacci level and Feb 29th low. The 1-day implied volatility level for USD/JPY is 320% of its 20-day average to show options traders expect a volatile ride today.

On a purely technical level my bias is for a move lower from current. But for that to materialise we likely need to see the BOJ hike by at least 0.1bp and abandon YCC and cease ETF purchases as rumoured on Monday. Anything less could send USD/JPY higher.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

 

[FOREX.com]

Japanese yen slides post BOJ, do we need to be on intervention alert? March 20th 2024​

The fact that the yen was broadly weaker following the BOJ's historic hike shows that it was not only priced in, but traders wanted more. Yet the rapid weakness of the yen brings back a familiar question; will the BOJ begin verbal intervention?

By : Matt Simpson, Market Analyst

Market Summary:​

• The Bank of Japan finally ditched negative rates after eight years to take their interest rate form -0.1% to 0% and abandoned YCC control, yet ETF purchases are set to continue until further notice
• The fact that the Japanese yen was broadly weaker shows not only was this already priced in, but that markets expected more from the BOJ in terms of tightening
• USD/JPY was the leader among yen pairs, rising nearly 1.2% during its best day in six weeks and second best since early November, closing just beneath the 151 handle
• GBP/JPY above its YTD high to reach its most bullish level in seven months, and whilst EUR/JPY saw an intraday break to new highs it puled back ahead of the NY close
• The weaker yen helped the Nikkei 225 extend its rally for a third day and close marginally above 40k
• The BOJ’s next 10bp hike has been fully priced in for October according to Bloomberg, with no real conviction of a hike much sooner Canada’s inflation data undershot expectations once again, bolstering bets of a BOC easing, with Bloomberg fully pricing in a 25bp cut in July
• USD/CAD initially taped a new YTD high earlier in the session but the stronger US dollar saw the pair reverse to close the day with a shooting star candle
• The RBA held interest rates at 4.35% and removed their slight hawkish bias, which excited traders enough to begin repricing cuts, sending AUD/USD t just shy of my 65c target to a 9-day low
• Gold continues to hold above its previous record high and trades within a tight range, which can be indicative of incoming volatility (with the trigger likely to be the FOMC meeting)

You can get a good feel of relative strength among FX majors by looking at how they performed against the weaker Japanese yen on Tuesday. GBP and EUR are clear leaders, having broken above cycle highs although USD/JPY was the strongest performer on the day. Despite it bullish outside day, NZD is clearly a laggard given how much it has fallen from its February highs compared to its FX major peers.

Of course, this brings us to an important question. Will the BOJ or MOF now become vocal about a weaker currency, as they have in the past? Whilst they remain adamant they do not fight a weaker yen, they do not like their currency to fall too quickly. And the rate at which the Japanese yen declined across the board yesterday is surely to raise a few eyebrows among officials, given the levels then yen is now trading at and the speed it got there. And this could lead to verbal intervention from BOJ or MOF officials if the currently level of volatility and direction persists.

Events in focus (AEDT):​

• 12:15 – China PBOC 1 and 5-year loan prime rates
• 13:00 – Inflation expectations (Melbourne Institute)
• 18:00 – UK CPI
• 21:00 – China Foreign direct investment
• 05:00 – FOMC interest rate decision, statement, updated staff forecasts
• 05:30 – Jerome Powel press conference

Click the website link below to get our exclusive Guide to USD/JPY trading in 2024.

https://www.forex.com/en-us/market-outlook/

USD/JPY technical analysis:​

The rise of USD/JPY picked up speed after finding support around 149, then proceeded to tap the 1-day and 1-week implied volatility levels after the BOJ hiked their interest rate. But the fact it has paused below 149 and around the initial 1-week implied volatility level to me suggests it may need to retrace. And we’re already seeing early sighs of that in today’s Asian session.

RSI (14) has formed a bearish divergence in the overbought zone and momentum is turning lower from the 151 handle. Given the bias for a less-dovish / more-hawkish than expected Fed meeting, the bias is for a break above 151 – even though this risk verbal intervention from the BOJ and MOF the closer it gets to 152. Ultimately the bias is for a small retracement today in Asia, and doubt we’ll see prices break beneath the 150.40/50 Zone.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

 

[FOREX.com]

AUD/USD reclaims 200-day MA on surprisingly dovish Fed meeting: Asian Open March 21st 2024​

US yields dragged the US dollar lower as the Fed continued to favour three cuts this year, helping AUD/USD break back above its 200-day MA ahead of today's employment figures.

By : Matt Simpson, Market Analyst


The Fed held rates as widely expected, although I’ll admit to being surprised that the Fed did not reduce their median forecast from three cuts, down to two or even one this year. With a median expectation of three cuts this year, it means that either the Fed need to begin easing quickly as not to stand accused of being ‘politically motivated’ ahead of the US election, or they have simply given up on the 2% inflation target. And I am beginning to think it may be the latter, given the Fed upgraded their core PCE inflation forecast for 2025 to 2.6% from 2.4% and maintained it at 2.2% in 2025.

Fed fund futures imply a 68.3% probability of a July cut, a 44.8% chance of a second cut in September and 37% chance of a third 25bo cut in November.

The US dollar was dragged lower by the yield curve, and the US02Y (which is most sensitive to anticipated monetary policy) formed a prominent bearish engulfing day with a clear rejection at the 200-day average. And with the potential for traders to continue pricing Fed cuts, the path of least resistance for the US dollar could be lower over the near term.

Read Matt Weller’s rundown: Fed Meeting Analysis: FOMC and Powell Still Looking For Excuses to Cut

• EUR/USD rallied from its 200-day MA and GBP/USD sprung from its 50-day MA despite softer inflation data bringing forward bets of a BOE cut
• USD/JPY reached a 3-month high and stopped just 18-pips beneath the 152 handle before handing pack ~50% of Wednesday’s gains
• The Nikkei newspaper reports that the Next BOJ hike could be in July or October, although the FOMC meeting clearly stole the show in terms of market flows
• The S&P 500 closed at a new record high and above 5200 in response to the seemingly dovish Fed meeting
• Bitcoin futures snapped a 4-day losing streak and regained its footing just above $60k, and recouped most of Tuesday’s gains
• Gold rallied over 1.3% during its best day in twelve, with a clear sign of bullish range expansion from the 2023 bringing a break to a new ATH into focus, potentially today

Events in focus (AEDT):​

The Fed meeting may be behind us, but we still have an action-packed calendar to look forward to today. The Australian employment report is the main feature for today’s APAC session, as any further signs of weakness could further bolster bets of an RBA cut fresh on the back of the RBA removing their tightening bias. I doubt it would reverse yesterday’s AUD/USD gains, but it might be enough to see it retrace to its 200-dy MA.

The SNB are expected to hold until June or July, but never underestimate the potential for the SNB to come out swinging and pull the lever anyway (given their softer levels of inflation). We also have flash PMIs across the major regions, with a BOE meeting in between.


Click the website link below to get our exclusive Guide to AUD/USD trading in 2024.

https://www.forex.com/en-us/market-outlook/

• 10:00 – Japan’s trade balance
• 11:30 – Australian employment change
• 11:30 – Japan manufacturing PMI
• 19:30 – SNB interest rate decision, press conference
• 19:30 – German flash PMIs
• 20:00 – Eurozone flash PMIs
• 20:30 – UK flash PMIs
• 23:00 – BOE interest rate decision, MPC votes, statement, minutes
• 23:30 – US jobless claims
• 00:35 – BOC deputy governor speaks
• 00:45 – US flash PMIs

AUD/USD technical analysis:​

The Australian dollar enjoyed its best day in two weeks on the back of prospective Fed cuts. AUD/USD rallied from trend support and close firmly above its 200-day average. There’s a reasonable chance it could head for 66c ahead of today’s employment figures at 11:30 AEDT (00:30 GMT), at which point it is down to whether the jobs data delivers another leg higher for AUD/USD, or weak data excited RBA doves to short it.

Should we see a lower high form over the coming days, then my eyes will be on for a break back below the 200 average and a potential break of the neckline to confirm a head and shoulders pattern.

But for now that is on the backburner, as we may see a second wave of USD weakness as traders respond to the Fed’s relatively dovish meeting.



-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

 

[FOREX.com]

USD/JPY eyes 152, Crude oil stabilises above $80: Asian Open March 22nd 2024​

An SNB cut and dovish comments bolstered the US dollar to bring USD/JPY less then 30-pips from 152. WTI crude oil is also showing signs of stability above $80.

By : Matt Simpson, Market Analyst

Market Summary:​

• The Swiss franc was the weakest FX major on Thursday after the SNB surprised the consensus with a rate cut of 25bp (a move I warned that could happen yesterday)
• GBP was the second weakest FX major after the BOE began laying the groundwork to cut interest rates on Thursday, with Governor Bailey saying inflation was moving in the right direction and the sole two hawkish MPC voters dropping their vote to hike to a hold
• Weak PMI data from Europe also bought forward bets of ECB easing, weighed on the euro and sent the DAX to yet another record high
• Not wanting to miss out, the S&P 500 gapped up and printed its 19th record high of the year, although the minor retracement and small range brings a potential Island reversal into focus (a particularly bearish pattern, but requires a large gap would tomorrow)
• In all likelihood, the S&P 500 may try to fill the gap but could find support instead, given its reluctance to fall over so far
• With some central bans at or near dovish pivots, the relatively high yield the US offers saw the US dollar surge and yields move higher and a bullish engulfing candle formed on the US dollar index
• USD/CHF rose over 1% during its best day in a month and stopped just shy of my 0.9000 target, AUD/CHF also broke higher in line with yesterday’s bias and reached 0.59 – a break above which could mark the breakout of a multi-month bottom
• USD/JPY rose for a third day and trades less than 30 pips from the 2023 high, bring a potential break above 152 into focus (and the evergreen question of whether the BOJ will begin to verbally intervene)
• BOJ Governor Ueda said the 0.1% ‘hike’ to 0% was designed to reduce market volatility further out
• Australia’s strong employment report saw bears cover as it leaves little wriggle room for RBA easing, with over 100k jobs added and unemployment fall from 4% to 3.7%
• Gold saw a false break above $2200 and closed the day with a bearish pinbar, to show all may not be well at these highs

Click the website link below to get our exclusive Guide to USD/JPY trading in 2024.

https://www.forex.com/en-us/market-outlook/

Events in focus (AEDT):​

• 10:30 – Japan’s CPI
• 11:01 – UK consumer confidence (GfK)
• 11:30 – RBA financial stability review
• 18:00 – UK retail sales
• 18:00 – German import prices
• 20:00 – German business confidence (Ifo)
• 23:30 – Canadian retail sales
• 00:00 – Fed Chair Powell speaks
• 07:00 – Fed member Bostic speaks

USD/JPY technical analysis:​

We’re back to the evergreen question; will the BOJ or MOF begin to verbally intervene with the yen weakening at such a pace? It’s possible. But then it we go back to the 2023 high, the market did the work for them anyway to send the yen higher against its peers.

So todays chart is really more about highlight a potential pivotal level than making a call as to whether it will break above 152.Yied differentials continue to favour a higher USD/JPY, yet on the other hand traders remain heavily net-short Japanese yen futures, around level usually associated with bullish reversals for the yen (bearish for USD/JPY).

Given that USD/JPY is yet to even test 152 this millennia, let alone break above it, I’ll always be suspicious of a first break if one arrives. In which case, if we’re treated to a heroic break above 152 today or even next week, I’ll be monitoring its potential for a reversal back beneath that milestone level for a potential short trade. As this is likely to be where the buy-stop orders reside for the latest bulls of the rally – and that could trigger a burst lower.

Beyond that, it is down to the BOJ’s appetite to let the yen slide, as to how sustainable a move we could expect for any move above 152.

Crude oil technical analysis:​

The daily chart shows an established uptrend for crude oil, and whilst it is yet to reach the $84 it remains a possibility. Stability has been found above $80 after a two-day retracement, and yesterday’s low held above the 10-day EMA. Perhaps the retracement is complete and momentum can now turn higher, but as one who is always suspicious of ‘false moves’ and spikes ahead of real moves, traders could also be on guard for such moves towards the $$79.07-$80 zone before the anticipated move higher begins.




-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge



The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.