When I wake up in the morning and go to sleep at night, I am grateful to be me.
The common currency crunched to $1.1845, although EU inflation figures matched upbeat forecasts but remained well below the ECB’s target. All eyes are on German Retail Sales and ECB President Christine Lagarde’s speech for further confirmation of Pandemic Emergency Purchase Programme tapering tomorrow.
Sterling plunged to $1.3813 after UK Gross Domestic Product shrank by 6.1% in Q1 on a YoY basis, as demand and economic activity fell due to the tightening of COVID-19 restrictions.
Yen slammed to 111.15 per dollar on Automatic Data Processing reports that private companies in the United States added 692,000 jobs in June.
Loonie tread water around 1.2407 against its broadly stronger U.S. counterpart on Wednesday as data showed Canada's economy shrinking less than expected in April.
Aussie cascaded $0.7484, after China's Caixin Manufacturing PMI misses estimates with 51.3 in June, coupled with China’s Xi firm commitment “To implement 'one country, two systems in Hong Kong and Macau.”
The South African rand firmed at 14.29 per dollar on Wednesday after data showed the country recorded a larger-than-expected trade surplus for May.
This morning, the Rupee hammered by 10 cents to 43.20(selling) against the dollar on the domestic market.
11:55 - EUR - German Manufacturing PMI (Jun)
12:30 - GBP - Manufacturing PMI(Jun)
16:30 - USD - Initial Jobless Claims
18:00 - USD - ISM Manufacturing PMI
23:00 - GBP - BoE Gov Bailey Speaks
“ Its not that I am so smart. Its just that I observe the market longer. Patience is key to success.” - Anonymous
Policy statement from the US Federal Reserve certainly helped fuel a spike upwards in the USDJPY which topped exactly in the 110.80-111.00 resistance zone ( Based on our previous forecast on 28.05.21) before trimming most of its post Fed gains. What next?
The Bank of Japan kept its policy unchanged today and held its negative interest rate firm while also holding steady to its quantitative easing program in contrast with the FED. The special COVID program is also extended till March 2022. The lag in economic recovery has put institutions under stress , with BOJ responding that they will announce new loan measures in the near term.
The sudden burst of volatility and uncertainty will continue to prevail in the market in the coming sessions. The forex pair , hovering near critical values of 110.80-111.00, remains a key pivot in the near term. 110.80 marks a complete A-B-C corrections as per Elliott wave principle which coincides also with 100% Fibo Extension. A strong break and close above these levels could signal medium term buying in the USD amid breach of stop losses.
Shorts in USDJPY can be initiated in the region of 110.50-110.80 with a stop above 111 with targets towards 109 and 108 levels.