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The Shared currency ticked down to $1.1804 as COVID-19 cases continue to increase globally, making investors nervous about the global recovery.
The Cable slipped to $1.3757 as the Covid delta variant exploded in the UK, and questions arose as to whether the lifting of lockdown rules in England is a good idea.
The Japanese yen edged higher at 109.93 against the U.S dollar after the Bank of Japan decided to maintain the status quo at the July monetary policy meeting and lowered its growth forecast for the current fiscal year.
The riskier Australian dollar fell to its lowest level at $0.7374 since December 2020, on growing fears over the rapid spread of the Delta covid variant. Covid cases in Australia jumped over the weekend, with Victoria announcing an extension to the lockdown, denting the sentiment around the higher-yielding Aussie.
The Loonie dived to 1.2642 per U.S dollar, bearing the double whammy of the US dollar’s safe-haven demand and the oil price weakness.
South African rand gained to 14.45 against the greenback despite the continent's most industrialised economy has been hit by some of the worst violence in decades after the jailing of former President Jacob Zuma.
The dollar-rupee stayed put at 43(selling) on the Mauritian market.
14:00 - GBP - MPC Member Haskel 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.