2024-04-18 11:11

USD/JPY News and Analysis Janet Yellen meets with Asian finance officials as intervention speculation rises USD/JPY edges slightly lower after trilateral meeting Effectiveness of FX intervention efforts rise on multi-party alliance Get your hands on the Japanese yen Q2 outlook today for exclusive insights into key market catalysts that should be on every trader's radar: Janet Yellen Meets with Asian Finance Officials as Intervention Speculation Rises FX intervention remains a hot topic of discussion, particularly after the Japanese and South Korean finance ministers met with US Treasury Secretary, Janet Yellen. Japan and South Korea agreed to “consult closely” on FX markets after their respective currencies witnessed large declines as a result of the Fed having to delay its first interest rate, weighing on the respective Asian currencies. Under a G7 agreement, advanced economies agreed to allow their foreign exchange rate to be determined by the market unless excessive and disorderly moves are experienced. This is the latest development hinting that a move to defend the yen is getting closer and closer. Previously, on the 27th of March, the Japanese Finance Minister Shunichi Suzuki stated that authorities will take “decisive steps” against yen weakness. Those same words were preciously mentioned ahead of the first bout of intervention back in 2022 and sent a warning to the market. Nevertheless, the latest warnings have had little to no effect on the pair which has only marginally declined yesterday. The pair trades dangerously close to the 155.00 line which is thought to be the tripwire likely to precede massive yen buying. The issue with intervention efforts is it can be costly and its effectiveness is still up for debate. A strong US economy has delayed the Fed’s plans to cut interest rates, meaning unless the Bank of Japan raise interest rates in a rapid fashion (highly unlikely), the massive interest rate differential between the two is only going to revitalise the carry trade. A co-ordinated effort however, implies a broader, longer lasting effort to strengthen the yen. USD/JPY Weekly Chart Source: TradingView, prepared by Richard Snow USD/JPY Edges Slightly Lower after Trilateral Meeting USD/JPY continues in overbought territory but has shown restraint ahead of the 155.00 level. This level is very likely to be tested if US growth and PCE inflation data next week continues to show resilience. In the absence of further jawboning from Japan officials, it would appear the market isn’t heeding prior warnings. 152.00 remains the level of interest in the event a pullback emerges or markets anticipate an imminent threat of FX intervention. To the upside, 155.00 could be breached with the right catalyst (hit US PCE and growth), in the same way US CPI propelled the pair above the prior ceiling of 152.00 USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow Risk Events on the Horizon Tomorrow, Japanese inflation will factor into the BoJ’s thinking regarding its inflation outlook. Then next week, the potential for strong US growth in Q1 can further derail the yen ahead of the BoJ April decision which isn’t being eyed for another rate hike. US PCE is another threat to USD/JPY as hotter-than-expected US inflation has built up in 2024. https://www.dailyfx.com/news/usd-jpy-latest-trilateral-meeting-hints-at-co-ordinated-intervention-effort-20240418.html

2024-04-18 07:56

Gold (XAU/USD Price and Analysis Israel/Iran conflict – The lull before the storm? Gold consolidates ahead of a potential breakout. Most Read: Why Major Currencies and Gold are Safe Havens in Times of Crisis Israel is still likely to respond to Saturday’s drone and missile attack by Iran, despite the latest diplomatic efforts by other countries to try and calm the situation in the Middle East. After talks with the UK and Germany yesterday, Israel’s Prime Minister Benjamin Netanyahu thanked both for their advice but warned of retaliatory action ahead. “They have all sorts of suggestions and advice. I appreciate that. But I want to make it clear – we will make our own decisions, and the state of Israel will do everything necessary to defend itself.” According to a report in The Daily Telegraph, Israel is unlikely to carry out retaliatory action before the end of Passover (April 30). With a potential lull in Middle East tensions now seen until the end of the month, gold will need a new driver to keep it at its current elevated levels. The US dollar backed off from its recent multi-month highs overnight, helping the precious metal consolidate. The US dollar has rallied hard since early March, and this move accelerated last Wednesday after data showed that US inflation is refusing to move towards the central bank’s target. Technical support from all three simple moving averages on the daily chart is set to keep the US dollar higher for longer. Learn How to Trade Gold with our Complimentary Guide US Dollar Index – April 18th, 2024 The price of gold remains within touching distance of its recent all-time high at $2,431.8/oz. and if the situation in the Middle East escalates, this high is likely to be breached. Gold is moving out of heavily overbought territory, while the recent multi-month ATR is starting to turn lower. The precious metal may see a period of consolidation over the coming days before the situation in the Middle East dictates the next move. Gold Daily Price Chart – April 18th, 2024 Chart via TradingView Retail trader data shows 50.75% of traders are net-long with the ratio of traders long to short at 1.03 to 1.The number of trader's net long is 2.08% lower than yesterday and 2.19% lower than last week, while the number of trader's net short is 3.89% lower than yesterday and 8.03% lower than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Gold-bearish contrarian trading bias. See the Full Sentiment Report Here: What is your view on Gold – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/gold-xau-usd-price-holds-steady-amid-pause-in-middle-east-tensions-20240418.html

2024-04-18 05:00

USD/ZAR Key Takeaways: 1. Moderate Decrease in Inflation: In March 2024, consumer price inflation for urban areas saw a slight decrease to 5.3% from 5.6% in February. 2. Key Drivers of Inflation: The annual inflation rate was significantly influenced by increases in housing and utilities, miscellaneous goods and services, food and non-alcoholic beverages, and transport costs. 3. Shift in Goods vs. Services Inflation Rates: The inflation rate for goods fell from 6.2% in February to 5.7% in March, whereas the inflation rate for services saw a marginal rise to 5.0% from the previous month’s 4.9%. 4. SARB's Monetary Policy Outlook: The current outlook hints at a possible reduction in rates in the latter half of 2024. 5. Influence of Global Monetary Policy Trends: The SARB’s decision-making regarding interest rate cuts will likely be influenced by monetary policy trends in developed economies. March CPI in brief In March 2024, the Headline Consumer Price Index (CPI) for urban areas indicated that annual consumer price inflation decreased slightly to 5.3% from 5.6% in February, with a month-on-month increase of 0.8%. The main drivers of this annual inflation rate included housing and utilities, miscellaneous goods and services, food and non-alcoholic beverages, and transport, contributing significantly with increments ranging from 5.1% to 8.5% year-on-year. Notably, the inflation rate for goods decreased to 5.7% from February's 6.2%, while the rate for services experienced a slight increase to 5.0% from 4.9%. SARB Monetary Policy / Rates Outlook The slight tick lower in inflation will be welcomed by the South African Reserve Bank (SARB) but CPI remains elevated and closer to the ceiling of the 3% to 6% targeted range. Current expectations suggest that rates could start to lower in the second half of the year through 25 basis point increments, at best three times (totaling 0.75% by the end of 2024). The SARB is likely to follow the lead though of developed economies such as the US to try to stem capital outflows and protect carry trade opportunities. With the US Federal Reserve becoming a little more hawkish as of late and starting to lean away from the more dovish ‘pivot’, perhaps three rate cuts this year in South Africa are starting to look too optimistic. USD/ZAR Technical View After a failed downside break, the USD/ZAR has produced a sharp bullish price reversal from around the 18.50 level and from oversold territory. The reversal has taken the price through the 19.00 level and is now testing the 19.10 level whilst in overbought territory. Traders might look for either an upside break of the 19.10 level for long entry or a bearish price reversal off this level for short entry. Should the upside break trigger (confirmed with a close above), the 19.30 to 19.40 range provides the upside resistance target from the move, while a close below the 19.00 level would suggest the move has failed. Should a bearish price reversal instead form off the 19.10 resistance level, confirmed with a close below 19.00, 18.80 becomes the initial support target, while a close above the 19.40 level might be used as a failure indication. https://www.dailyfx.com/news/usdzar-price-forecast-rand-remains-steady-after-local-cpi-inflation-20240418.html

2024-04-17 23:00

Most Read: Market Sentiment Analysis and Outlook: Crude Oil, Dow 30, AUD/USD The US dollar, as measured by the DXY index, retreated from multi-month highs on Wednesday, dragged lower by a pullback in Treasury yields. Despite this retracement, the DXY remains biased to the upside, especially after top Fed officials signaled that the U.S. central bank may delay the start of its easing cycle in response to resilient economic data and hotter-than-expected inflation readings in recent months. Putting fundamental analysis aside, the next segment of this article will focus on analyzing the technical outlook for four U.S. dollar FX pairs: EUR/USD, USD/JPY, GBP/USD, and USD/CAD. Within this section, we will examine price action dynamics and essential tech levels poised to function as either support or resistance in the upcoming trading sessions. EUR/USD FORECAST - TECHNICAL ANALYSIS After steep losses in recent days, EUR/USD stabilized and rebounded off the psychological 1.0600 level on Wednesday, pushing past the 1.0650 mark. If the pair manages to build upon its recovery in the days ahead, resistance lies at 1.0695, followed by 1.0725. On further strength, the focus will be on 1.0820. On the other hand, if sellers return and regain control of the market, technical support emerges at 1.0600. Bulls must staunchly defend this technical floor; a failure to do so could reinforce bearish pressure in the near term, resulting in a deeper pullback toward the 2023 lows located near 1.0450. EUR/USD PRICE ACTION CHART EUR/USD Chart Created Using TradingView Wondering about the yen's outlook – will it continue to weaken or mount a bullish comeback? Discover all the details in our Q2 forecast. Don't miss out – request your complimentary guide today! USD/JPY FORECAST – TECHNICAL ANALYSIS USD/JPY edged lower on Wednesday, stepping off its multi-decade high established in the previous session when the pair hit 154.78. Should the downturn reversal gain momentum later this week, support can be spotted at 153.20 and 152.00 thereafter. Below these levels, 150.80 may become a focal point. Conversely, if USD/JPY resumes its rally, resistance looms at 154.78, followed by 156.00, the upper limit of a short-term ascending channel. Despite the pair’s bullish bias, caution is warranted due to overbought market conditions and the growing possibility of FX intervention by the Japanese government. USD/JPY PRICE ACTION CHART USD/JPY Chart Created Using TradingView GBP/USD FORECAST – TECHNICAL ANALYSIS GBP/USD mounted a moderate comeback on Wednesday, bouncing off support in the 1.2430 region. If the pair extends its rebound in the coming trading days, resistance awaits at 1.2525, followed by 1.2575 near the 200-day simple moving average. On continued strength, the next key level to watch is 1.2645. Alternatively, if sellers return and trigger a market selloff, support is visible at 1.2430. To prevent a larger drop, bulls must protect this floor tooth and nail; any lapse could usher in a slump towards 1.2325. Further losses beyond this point might refocus attention on the October 2023 lows near 1.2040. GBP/USD PRICE ACTION CHART GBP/USD Chart Created Using TradingView USD/CAD FORECAST – TECHNICAL ANALYSIS After failing to clear confluence resistance at 1.3850, USD/CAD turned lower on Wednesday, with sellers capitalizing on the reversal opportunity and driving prices back down towards 1.3765. If losses pick up pace over the coming trading sessions, support appears near the 1.3700 handle, followed by 1.3610. Alternatively, if the bulls regain the upper hand and manage to push the exchange rate higher, primary resistance rests at 1.3850, followed by the psychological 1.3900 threshold. Further up the ladder, attention will be fixed on the 2022 highs around 1.3980. USD/CAD PRICE ACTION CHART USD/CAD Chart Created Using TradingView https://www.dailyfx.com/news/forex-usd-dollar-still-on-bullish-path-setups-on-eur-usd-gbp-usd-usd-jpy-usd-cad-20240417.html

2024-04-17 14:10

EUR/USD, EUR/GBP Analysis Fed-ECB policy divergence on the cards, EUR/USD attempts to halt the recent decline EUR/GBP continues to trade within familiar range Scheduled risk events overshadowed by geopolitical uncertainty Elevate your trading skills and gain a competitive edge. Get your hands on the euro Q2 outlook today for exclusive insights into key market catalysts that should be on every trader's radar: Fed-ECB Policy Divergence on the Cards Recent developments have seen the Fed delay the start of its rate-cutting cycle due to hotter-than-expected inflation data and a resilient economy, including a robust labor market. This has led to a prolonged period of higher interest rates in the US, which has put pressure on the Euro. In contrast, ECB officials have expressed a preference for a rate cut in June as the governing council gears up to move before the Fed. Traditionally major central banks look the Fed for that first move and subsequently follow shortly after. The growing calls for a rate cut in the eurozone are materializing at the right time as the continent grapples with stagnating growth and inflation that has headed lower than initially anticipated. Just this morning EU inflation for March was confirmed to be falling at an encouraging pace. During the April meeting, the ECB refrained from pre-committing to any specific rate path, indicating a more data-dependent approach. This cautious stance has allowed the central bank to maintain flexibility in its decision-making process, taking into account the evolving economic landscape and geopolitical uncertainty. Traders and investors will be closely monitoring upcoming economic data releases, particularly those related to inflation and growth in the US and the eurozone, as well as any further comments from ECB and Fed officials. If the data continues to support the case for a rate cut and the ECB follows through on these expectations, the Euro could be poised for gains in the near term. EUR/USD Attempts to Halt the Recent Decline EUR/USD attempts to halt the recent US CPI-inspired sell-off. The pair has come under pressure after Fed officials signaled a reluctance to cut the Fed funds rate in the face of stubborn inflation. Nevertheless, the pair attempts to arrest the recent decline, recovering from oversold territory. The shorter-term pullback at extreme levels is not uncommon but the longer-term outlook suggests a further decline is possible. EUR/USD bears will be watching the 23.6% Fibonacci retracement level (corresponding to the broad 2023 decline. EUR/USD Daily Chart Source: TradingView, prepared by Richard Snow EUR/USD is the most liquid FX pair in the world. It and other liquid pairs are seen as more desirable due to the lower spreads and vast interest they attract. Find out how to trade the most liquid FX pairs: EUR/GBP Continues to Trade Within the Familiar Range EUR/GBP bounces off the 0.8515 zone of resistance which underpins the familiar trading zone that has emerged since late January. It is a fairly narrow range, with the pair testing the 50-day simple moving average (SMA) currently. Sterling has a modest reaction to the UK CPI data earlier this morning as it rose against the euro. Both currencies have struggled to forge a directional move as the two central banks consider rate cuts. Both regions have experienced lackluster growth but progress on UK inflation has lagged the EU, helping keep the pair rooted near the bottom of the range. EUR/GBP Daily Chart Source: TradingView, prepared by Richard Snow Scheduled Risk Events Overshadowed by Geopolitical Uncertainty This week is rather quiet from the perspective of scheduled risk events, apart from a plethora of Fed speakers tomorrow who are expected to weigh in on the stubborn inflation data that has persisted in 2024. After today’s ECB final inflation data for March, euro-centered data continues to be in short supply. The major concern for markets in the coming days is focused around the events unfolding in the Middle East. Israel has communicated their intention to respond to Iran’s drone strikes, which were in response to a targeted strike from Israel on Iranian targets in Syria. Representatives at this weekend’s United Nations meeting support de-escalation efforts in the region and have called for restraint from Israel, which appears to have been in vain. Stay up to date with breaking news and themes driving the market by signing up to the DailyFX weekly newsletter https://www.dailyfx.com/news/euro-price-forecast-eu-inflation-data-bolsters-case-for-june-rate-cut-20240417.html

2024-04-17 11:00

Japanese Yen Prices, Charts, and Analysis USD/JPY – Will a break of 155.00 wake up the Bank of Japan? GBP/JPY – A fresh, short-term high? Japanese Yen Q2 Forecasts: Unlock Exclusive Insights into Key Market Catalysts for Traders The Bank of Japan is seemingly comfortable sitting on the sidelines and watching the Yen drift ever lower, despite the occasional bout of verbal intervention. Over the last few weeks, the Japanese central bank has voiced its concern over the weakness of the Yen, warning that they are closely watching market moves and volatility, but words it seems are no longer enough to prop up the currency. USD/JPY remains close to an all-time high, while GBP/JPY is setting up for a technical push higher. The consensus view that 155.00 is a ‘line in the sand’ for USD/JPY and will trigger a response by the Bank of Japan, is being tested, especially as the US dollar pushes ever higher. While the Yen remains weak, the US dollar has rallied sharply in the last few days as traders pushed back expectations of when the Federal Reserve will start cutting rates. This hawkish reset has seen US Treasury yields rally to multi-month highs, with the yield on the rate-sensitive UST 2-year hitting 5% on Tuesday. The current technical setup on the UST 2-year is bullish after a clean break above the 200-day sma, while the 20-dsma is looking to move above the longer-dated moving average. A potential bullish flag and pole setup is currently being made and traders should monitor this setup in the coming days. US Treasury Two-Year Yield A bullish flag and pole setup is being played out on the daily USD/JPY chart and suggests that the pair may move higher and above 155.00. As discussed earlier, this is seen as a potential intervention target so traders need to be aware of any official BoJ chatter. If the central bank allows USD/JPY to move higher, then 160.00 becomes the next target. Prior resistance at 151.92 is now the first level of support. USD/JPY Daily Price Chart Retail trader data shows 16.19% of traders are net-long with the ratio of traders short to long at 5.18 to 1.The number of traders' net long is 2.26% lower than yesterday and 6.04% higher than last week, while the number of traders' net short is 3.74% higher than yesterday and 2.22% lower than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. GBP/JPY continues to post an unbroken series of higher lows, and a break above the mid-to-late March double top around 193.50 would continue a series of higher highs. Above here, the June 2015 high at 195.88 heaves into view. Initial support is around 191.00. GBP/JPY Daily Price Chart What is your view on the Japanese Yen – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/japanese-yen-forecast-usd-jpy-and-gbp-jpy-technical-analysis-and-potential-set-ups-20240417.html