Don't look for the needle in the haystack. Just buy the haystack.
The common currency popped to $1.1867 on Monday's news that the European Central Bank will change its guidance on the next policy steps at its next meeting to reflect its new strategy and show it is serious about reviving inflation.
Sterling jostled to $1.3887, on softer USD, despite a fresh row of a tussle between the UK and EU as EU represented a new total bill of £40.8bn being rejected by Downing Street.
Yen hovered above its recent low at 110.16 against the dollar on Monday, as fears about a slowdown in the global economic recovery appeared to have subsided for now.
Loonie bolstered to 1.2464 against the greenback on Friday's report that the unemployment rate in Canada dropped to 7.8% in June vs 7.7% expected.
Aussie surged to $0.7473 on risk sentiment after China cut banks' reserve requirement ratio across the board to underpin its economic recovery.
South African rand soared at 14.30 per greenback as strong exports of commodities and manufactured items have seen the country's trade balance average a surplus of 50 billion rands a month for 2021.
The dollar-rupee plummeted by 40 cents to 42.95(selling) following the Bank of Mauritius' intervention to sell U.S dollars on the domestic market.
17:30 - USD - FOMC Member Williams 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.