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 Cable catapulted to $1.3878 on the back of strong services PMI beating expectations and after Prime Minister Boris Johnson announced a likely end to all COVID-19 restrictions on July 19.
The Japanese yen extended gains to 110.81 versus the greenback as Americans return from a long weekend ahead of the U.S ISM Services PMI.
The Aussie dollar rocketed to $0.7585 after the RBA kept its interest rate unchanged at 0.10% as it handed down its policy decision earlier in the day.
The Loonie benefited to 1.2305 per U.S dollar on the back of Global oil producers failed to reach an agreement during the latest OPEC+ meeting, indicating the continuation of the restrained output policies.
The South African rand soared to 14.19 against the U.S dollar, digesting last week's U.S. jobs report soothed jitters about a faster end to monetary stimulus in the United States.
The dollar-rupee stayed put at 43.20(selling) on the local market.
12:30 - GBP - Composite PMI (Jun)
13:00 - EUR - German ZEW Economic Sentiment (Jul)
18:00 - USD - ISM Non-Manufacturing PMI (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.