If you can learn to create a state of mind that is not affected by the market's behavior, the struggle will cease to exist
The Shared currency extended losses to as low as $1.1845 on Friday after the U.S. Federal Reserve surprised markets last week by signalling it would raise interest rates and end emergency bond-buying sooner than expected.
The Cable slipped to $1.3813 on Brexit deadlock and a spike in the UK’s cases concerning Delta variant of the covid, ahead of this week’s Bank of England meeting for fresh clues.
The safe-haven yen held firm at 109.89 against the U.S dollar as the Fed's tilt hit risk asset prices.
The Aussie dollar tumbled to $0.7505 as preliminary Aussie Retail Sales for May drops below 0.7% market consensus.
The Loonie trickled to 1.2450 versus the U.S dollar in the absence of significant fundamental drivers and high-tier macroeconomic data releases.
South Africa's rand fell steeply to 14.33 against the greenback heading for a weekly loss of almost 4% after the U.S. Federal Reserve's hawkish message on monetary policy dented investors' appetite for riskier assets.
The dollar-rupee surged by 10cents to 41.45(Selling), tracking the U.S dollar strength.
16:30 - EUR - ECB President Lagarde Speaks
18:15 - 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.