2023-06-16 04:49
The US dollar experienced a strong rally following the hawkish Fed meeting. The yen weakened to its lowest point this year before the BOJ meeting. Analysts suggest that policymakers might intervene if the yen weakens rapidly. Today’s USD/JPY outlook is bullish. On Thursday, the US dollar experienced a strong rally following the Federal Reserve’s indication of future rate hikes. Now, the market focus is shifting towards upcoming central bank decisions. The yen weakened to its lowest point this year, coinciding with the Bank of Japan’s commencement of a two-day policy meeting. Elsewhere, more than half of the economists surveyed by Reuters stated that the Japanese government and central bank would take action to prevent the yen from declining further. This will happen if it reaches the 145 per US dollar level. The market closely monitors the response of the government and the Bank of Japan to currency movements. This is especially after their recent meeting when the yen approached a six-month low. 96% of the respondents in the poll expect the BOJ to maintain its current policy this week. Meanwhile, around half anticipate a reduction in easing measures, such as adjustments to the yield curve control scheme, either in July or September. Furthermore, analysts suggest that policymakers might intervene if the yen weakens rapidly. Additionally, they will intervene if the depreciation is perceived to prolong domestic inflation and impact households’ purchasing power. In May, the BOJ, finance ministry, and Financial Services Agency held a three-party talk similar to the one conducted last year. In September, this preceded Japan’s first intervention in 24 years, involving selling dollars and buying yen. USD/JPY Key Events Today Investors expect sales data from the US, a leading indicator of consumer spending and the state of the economy. Additionally, investors expect the US jobless claims report. USD/JPY Technical Outlook: Bullish Breakout Leads To A Higher High At 141.50. USD/JPY 4-hour chart outlook USD/JPY has finally broken out of consolidation in the 4-hour chart. The price shot up, breaking above the 140.25 range resistance level. This has seen the continuation of the previous bullish trend. The price traded between the 138.75 resistance and the 140.25 resistance levels for a long time. With the recent breakout, bulls have retested the 141.50 resistance, pushing farther above the 30-SMA. Additionally, the RSI now trades nearer the overbought region. The price will likely pause at 141.50 before pushing higher to make new highs. https://www.forexcrunch.com/usd-jpy-outlook-soars-amid-feds-hawkish-pause-eyes-on-boj/
2023-06-13 10:27
Traders maintained caution ahead of monetary policy decisions from various central banks. The US May inflation data will be released on Tuesday. Economists anticipate the ECB to raise its key interest rate by 25 basis points. Today’s EUR/USD forecast is bullish. The dollar fell on Monday against the euro as traders maintained caution ahead of monetary policy decisions from various central banks, including the Federal Reserve. Notably, investors will watch policy meetings by the Fed, the European Central Bank (ECB), and the Bank of Japan. These will establish the prevailing sentiment and contain indications from policymakers regarding the future trajectory of interest rates. In addition, the US May inflation data will come out on Tuesday, coinciding with the start of the Fed’s two-day meeting. Based on the CME FedWatch tool, money markets are leaning towards the Fed pausing on Wednesday. On the other hand, most economists anticipate the ECB to raise its key interest rate by 25bps this week, with another hike in July. Finally, it will halt for the remainder of the year. Aside from the specific decisions made by the central banks during these meetings, the focus will be on their forward guidance. Given the aggressive rate hikes undertaken by central banks in the past 12-15 months, there is interest in whether they are preparing for a pause. This would follow the example set by the Reserve Bank of New Zealand. Surprisingly, the RBNZ signaled that it had finished tightening, having raised rates to the highest level in over 14 years at 5.5%. EUR/USD Key Events Today No key economic releases are scheduled for today from the US or the Eurozone. Therefore, investors will likely keep speculating on the upcoming inflation report and the FOMC meeting. EUR/USD Technical Forecast: Bulls Propel To 1.0785 Resistance EUR/USD 4-hour chart EUR/USD has suddenly shot up after pausing and pulling back from the 1.0785 resistance level. The bulls returned when the price got close to the 30-SMA support. The price has now risen farther away from the SMA, strengthening the bullish bias. Moreover, the RSI has moved closer to the overbought region, signaling solid bullish momentum. However, the price is nearing the 1.0785 resistance level, where it might pause again. Given the strong momentum, bulls might cross this resistance to target the next resistance at 1.0825. Economists anticipate the ECB to raise its key interest rate by 25 basis points. The US May inflation data will be released on Tuesday. https://www.forexcrunch.com/eur-usd-forecast-dollar-weakens-ahead-of-policy-meetings/
