We do crazy things together and the make them normal.
The single currency lost ground to $1.1837 for the first time since April 6, on comments from European Central Bank Governing Council member and Bundesbank President Weidmann that he is skeptical about tolerating inflation overshoot.
Sterling plunged to $1.3770, on reports that UK Chancellor Sunak’s admission that his hope for the UK and EU to strike a deal on regulatory equivalence “has not happened”, with downward pressure haltered by British government’s plan to rollout third Covid booster dose.
Yen hit a 15-month high of 111.64 against the dollar, following U.S. initial jobless claims tallied 64,000 in the week ending June 26, beating estimates.
Loonie staged a decisive rebound at 1.2442 per greenback ahead of Friday's Nonfarm Payrolls data.
The Aussie dollar, seen as a proxy for risk appetite, slid to $0.7464, hitting its lowest since Dec. 21, as Australia's major centers of Sydney, Brisbane, Perth and Darwin are all under lockdown.
Rand nosedived to 14.47 per dollar, on broad dollar strength, as increased vaccinations that have led to more robust economic activity have helped the U.S. recovery from the pandemic, prompting expectations the Fed could start exiting its ultra-easy policy.
The local pair steadied at 43.20(selling) on the local market.
16:30 - USD - Nonfarm Payrolls (Jun)
16:30 - EUR - ECB President Lagarde 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.