|Day's range||112.62 - 113.081|
|52-week range||104.6670 - 114.7250|
The Dollar/Yen is trading lower early Thursday, following through to the downside after the previous session’s technical reversal top. Demand for risk is slightly lower early in the session, sending some investors into the safe haven Japanese Yen. Investors are also reacting to weaker-than-expected domestic data. Domestically, Japan posted a trade surplus in June, but it came in below the forecast. After booking a deficit the previous month, new data showed a surplus, with exports rising despite ongoing international trade tensions. It looks as if USD/JPY investors are using the end of Powell’s semiannual congressional testimony as an excuse to book profits after a strong rally.
The US dollar initially tried to rally during the day again on Wednesday but has found the ¥113 level to be a bit too expensive. That being the case, the pullback started as soon as the Americans came on board, and quite frankly I think in the end this will be a healthy sign, as we had gotten ahead of ourselves.
The British pound suffered again during the day on Wednesday, as political theater continues to drive where the currency is going in the short term. This market is potentially sensitive to risk, so it makes sense that the GBP/JPY pair got particularly hammered.
Worse CPI in the UK sends the GBP lower. On the GBPCAD it helps to break the long-term up trendline and the lower line of the rectangle. That is a strong sell.
The British Pound continues its fall on Wednesday morning, trading at 1.3087, down 0.18%. The pound falls on reports that Theresa May could face a defeat on the latest Brexit Vote.
The market in the present scenario is going to be extremely noisy as the Brexit negotiations and strength in USD will keep the market under pressure. The market will remain under pressure as the Brexit negotiations gathered pace and fall in Tuesday’s session is likely due to an indication that the UK is going to leave EU customs union without a deal.
The European Union and Japan signed a historic deal on Tuesday that will remove any tariffs on products they exchange.
The reaction in the financial markets to Powell’s testimony indicates that investors were happy with the economy and the Fed’s “gradual” pace of interest rate hikes. Powell’s hawkish tone also supported the divergence in monetary policies between the Fed and the dovish Bank of Japan.
The US dollar rallied during most of the day on Tuesday, reaching towards the ¥112.50 level, an area that of course has attracted attention in the past. I suspect that this point we are churning, perhaps trying to build up the necessary momentum to continue the move higher.
The British pound was noisy during the session on Tuesday, crashing into the ¥148.50 level, an area that has been important more than once. As I record this, we are sitting right on that level and testing the gap that opened the week. Because of this, we could get a larger move.
The pound sterling has been trying to strengthen over the last few days but has not succeeded so far. The major fear of the pound traders lies in Brexit negotiations which are paused or disputed every now and then. Jobless claims in the UK rose by 7,800 against the expectations at 2,300 and the previous number of 7,700.
The NY trading session will see the Fed Chair Powell’s testimony to Congress. Investors will be looking to see if the Fed Chair maintains his hawkish views on the economy.
The market started the week with a bullish note, as the pair broke above the 1.17 level, reaching towards 1.1725 level. The British Pound shot higher during the Monday’s session reaching towards the 1.33 level but got enough resistance to fell slightly lower. The market rallied a bit during the Friday’s session reaching towards the 0.7450 level, as it found enough buyers to take the market forward.
The US dollar has initially gapped lower to open the week, but then rally towards the 112.50 level before dropping a bit. This is a market that looks a bit overstretched at this point, so I believe we need to pullback in order to pick up more upward momentum.
The British pound rallied during the trading session on Monday, reaching towards the ¥149.50 level. The market seems a little bit overextended at this point, and most certainly we do have a major psychological barrier above at the ¥150 level.
The market continued to move lower during the Wednesday’s session reaching down towards the 1.16 level but managed to bounce a little as it witnessed some buying interest around the area. If the market further breaks from here, the next major support will be at 1.15 level. There are a lot of political developments coming out of Europe and also the trade wars are building pressure on the market and hammering the Euro. A break above 1.17 level could bring some amount of stability to the market. …Read MoreGBP/USD
New Zealand will be releasing its quarterly CPI later tonight. Forecasts point to a 0.5% increase in inflation during the second quarter. The New Zealand Dollar gained 0.07% on Monday morning, trading at 0.6772.
On Monday, the USD/JPY is going to continue to be sensitive to U.S. Treasury yields and appetite for risk. The Forex pair could continue to climb if tensions rise due to increasing concerns over the trade dispute between the United States and China. This is because investors are treating the dollar like a safe haven asset. Trading is light early Monday because of a bank holiday in Japan. At 1230 GMT, the U.S. is scheduled to release reports on Core Retail Sales, Retail Sales and Empire State Manufacturing Index. At 1400 GMT, Look for a report on Business Inventories.
Investors will continue to focus on demand for risky assets and the U.S. economic data’s influence on Treasury yields and the chances of additional rate hikes from the Fed. There are no major reports from Japan this week. This means that traders will be watching the U.S. data closely. Key reports include U.S. Core Retail Sales and Retail Sales, and Building Permits. Fed Chairman Jerome Powell is also scheduled to speak before Congress on Tuesday and Wednesday.
There were no other major releases last week so the price action in the Australian Dollar, New Zealand Dollar and Japanese Yen was primarily influenced by the U.S. producer and consumer inflation data as well as the consumer confidence report. Traders reacted to these reports because they could help influence the Fed’s interest rate decisions later this year.
The US dollar has rallied significantly during the trading week, breaking above the ¥111 level, an area that has been very important over the last couple of months.
The British pound rallied significantly during the week, after initially dipping against the Japanese yen. It looks as if the Japanese yen will continue to get pounded, mainly because it is obvious that with the inverting yield curve, the Bank of Japan will not be tightening monetary policy anytime soon.
The US dollar has turned sideways overall during the day on Friday, as we hover above the vitally important ¥112.50 level. This was a target for me previously, and I expect to see a lot of digestion of the gains in this area.
The British pound initially fell during the day on Friday, breaking down towards the ¥147.50 level before turning around and showing signs of life. The market looks as if it is trying to go higher though, as the Americans, board.
The market further dipped lower during the Thursday’s session testing the 1.1650 level, an area which has been a support more than once. The reaction in the market is due to the details in the ECB meeting minutes. Going ahead, the market is likely to hold this level and will also attract buyers interest. If the market further breaks from here, then it will rapidly unwind towards the 1.16 level. …Read MoreGBP/USD