If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money.
The shared currency dropped to $1.1894 on broad U.S dollar strength, following comments from US Federal Reserve Governor Waller that the central bank should start thinking about the rolling out of its massive stimulus program in 2021 to allow the option of raising interest rates by late 2022.
Sterling cascaded to $1.3842 on concerns over British travelers banned from European Union due to Delta Covid variant spread.
Yen seesawed around 110.49 per dollar, unaffected by U.S. consumer confidence which increased in June to its highest level since the COVID-19 pandemic started more than a year ago.
Canadian dollar edged lower to 1.2392 against the greenback as new outbreaks of the Delta variant pressured economic activity slowdown.
Aussie plunged to $0.7516 as widening coronavirus lockdowns in Australia threatened the country's rapid recovery from last year's recession.
Rand tumbled to 14.32 per dollar as new coronavirus outbreaks threatened to derail a global economic recovery.
The local pair unchanged at 43.10(Selling).
10:00 - GBP - GDP (YoY)(Q1)
10:00 - GBP - GDP (QoQ)(Q1)
11:15 - EUR - German Unemployment Change (Jun)
13:00 - EUR - CPI (YoY)(Jun)
16:30 - CAD - GDP(MoM)(Apr)
18:00 - USD - Pending Home Sales (MoM)(May)
18:30 - USD - Crude Oil Inventories
“ 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.