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The Share currency fell to a three-month low to $1.1829 as German economic data disappointed and raised concerns about the country’s economic recovery from COVID-19.
The Cable slipped to $1.3806 on renewed USD strength despite the UK revealed that the Markit Construction PMI improved to 66.3 in June from 64.2.
The Japanese yen gained to 110.55 against the greenback as the risk mood soured ahead of U.S. Federal Reserve Meeting Minutes tonight.
The Aussie dollar gave up the previous day gains to as low as $0.7484 this morning, as the coronavirus concerns at home and downbeat sentiment keep downside pressure on the quote.
The Loonie fell to a two-month low at 1.2468 against its broadly stronger U.S. counterpart on Tuesday, as oil prices tumbled heavily.
South Africa's rand weakened to 14.34 per U.S dollar as traders positioned themselves ahead of the release of minutes from the U.S. Federal Reserve's pivotal June meeting.
The dollar-rupee jumped by 10cents to 43.30(selling) on the local market.
18:00 - USD - Jolts Job Openings
18:00 - CAD - Ivey PMIs
“ 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.