There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time.
The single currency slammed to $1.1913 on ECB policymaker Holzmann’s comments signalling no room for rate hikes amid weak inflation, as well as a long road to sum up the Pandemic Emergency Purchase Programme when the coronavirus emergency is over. Market awaits speech from ECB President Lagarde.
Cable tumbled to $1.3870, hit by the no show from the Bank of England in its July monetary policy meeting. The central bank warned against “ premature tightening” in policy and adopted a wait-and-watch approach.
Safe-haven Japanese yen spiked to 110.55 per dollar on cautious mood, as the more contagious Delta strain of the novel coronavirus spread in Asia and elsewhere, stoking fears of further lockdowns.
Loonie weakened to 1.2340 against its U.S. counterpart on Monday, as oil prices fell, with attention to Canadian monthly GDP on Wednesday.
Aussie cascaded to $0.7557 on concerns over renewed COVID-19 lockdowns across parts of the country.
South African rand hammered to 14.28 per dollar after President Ramaphosa announced tighter COVID-19 restrictions on Sunday for 14 days, saying the country's current containment measures were insufficient.
The Mauritian rupee nosedived to 43.10(selling) per dollar, soured by Bank of Mauritius' intervention yesterday to sell U.S dollar on the local market.
17:40 - EUR - ECB President Lagarde Speaks
18:00 - USD - CB Consumer Confidence (Jun)
“ 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.