Intraday Forex Friday, May 27 (EURUSD, USDJPY, etc). Dollar set for weekly drop as rate bets cool.


Hi everyone. This observation is made around 08:45 UTC today, with 30 minutes time frames. The Resistance and Support Line were constructed according to Fibonacci retrenchment. Any discussion is welcomed.

Shares on Friday were cautiously higher on Friday, heading to end the week higher, while the dollar was heading lower with fears over monetary policy tightening subsiding slightly as investors took comfort from Federal Reserve minutes suggesting it could pause its rapid rate hikes later this year.

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  • The euro rising to its highest since April 25 against the dollar earlier today and was last at $1.07341. The pair is also heading for 1.46% weekly gains.​
  • EUR/USD rallied moderately on a higher German bund yields that supported the euro, after the 10-year German bund yield rose +4.6 bp to 0.998%. The EUR/USD also garnered support from Thursday’s Eurozone data that showed Italian consumer confidence unexpectedly increased.​
  • The dollar meanwhile posted moderate losses after a sharp rally in stocks curbed liquidity demand for the dollar. Investors also took comfort from Federal Reserve minutes suggesting it could pause its rapid rate hikes later this year.​
  • The EUR/USD pair resumed its positive trading strongly to reach waited target at 1.0777, getting continuous positive support by the EMA50 that reinforces the chances of surpassing the mentioned level to open the way to achieve additional gains that reach 1.0845. Therefore, we expect to witness more rise in the upcoming sessions, noting that failing to achieve the required breach will press on the price to test 1.0640 areas before any new attempt to rise.​
Important Levels to Watch for Today:​
  • Resistance line of 1.07770 and 1.08459.​
  • Support line of 1.06392 and 1.05703.​

  • The dollar was flat to 127.082 yen, en route to 0.65% weekly decline.​
  • With U.S. inflation expectations have been coming off, hence fading expectations for Fed tightening has weighed on the USD/JPY, which the yen is quite sensitive to yield differentials​
  • Minutes from the Fed's May meeting, released Wednesday, showed that most participants believed 50 basis-point hikes would be appropriate at the June and July policy meetings, but many thought big, early hikes would allow room to pause later in the year to assess the effects of that policy tightening.​
  • Weakening U.S. economic data and rising recession fears also undermined the U.S. dollar against the Japanese yen.​
  • Although the divergence in monetary policy between the Federal Reserve and the Bank of Japan has been a major tailwind for the greenback. Though, the yen strengthened on comments from BoJ Governor Kuroda yesterday, who said the BoJ could manage an exit from its decades-long monetary policy and that U.S. rate rises would not necessarily keep the yen weak.​
  • The USD/JPY pair resumes its negative trading, and the continue of the bearish trend in the upcoming sessions, and the way is open to head towards our next negative target that reaches 126.026.​
  • The bearish trend is suggested on the intraday basis unless the price rallied to breach 128.158 and hold above them.​
Important Levels to Watch for Today:​
  • Resistance line of 128.158 and 128.817.​
  • Support line of 126.026 and 125.367.​

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