The British pound has rallied pretty significantly against the Japanese yen during the Monday session as we continue to see upward trajectory play itself out.
That does make a certain amount of sense because the interest rate differential is wide enough to drive a truck through.
I think you’ve got a situation where enough people are interested in being paid at the end of every day that there will be plenty of people out there hanging on to this pair, simply collecting swap at the end of the session.
Short-term Pullbacks are Opportunities
Short-term pullbacks should end up being buying opportunities and I would be very interested closer to the 203.50 level and area that we had broken above early during the session. After that, you have the 202 yen level and then the 200 yen level, both offering support and with the 50 day EMA racing towards the 200 yen level then I think you’ve got a situation where it does end up being like the perfect floor, if you will, for market memory is concerned. The 205 yen level above is a major barrier and did cause a little bit of a headache during the session, but really at this point it’s just yet another psychological barrier. It’s not really anything of significant importance.
I do think that the Bank of Japan is stuck and even if they do intervene, that’s only going to attract a lot of inflows because you can just pick up cheap British pounds. Really what the Japanese yen needs is everybody else to start cutting aggressively. We just don’t see that happening quite yet with inflation still relatively high around the world. With all of this being the case, the GBP/JPY pair continues to be one of my favorite trades in the overall markets, and as long as we see the same kind of interest rate situation, then I like the idea of being long, and at this point just don’t have any evidence of something changing anytime soon.
I see that the EUR/GBP pair is starting to rise again, and perhaps threaten a major resistance barrier in the form of the 0.85 level furthermore, there are other technical analysis factor to take into account, but today has been very interesting to say the least.
EUR/GBP
The Euro rallied a bit during the course of the trading session on Monday to reach the crucial 0.85 level. The 0.85 level is an area that has been very important more than once, so therefore I think you need to be cognizant of the fact that it has a certain amount of “market memory” attached to it. Furthermore, we have the 50-Day EMA hanging around the same level, and that of course is a major influence on what happens next. We have pulled back from their rather aggressively, so it shows that there is quite a bit of selling pressure in that general vicinity.
That being said, if we can get a daily close above the 0.85 level, then I think we have an opportunity to pick up value on any short-term dip, and the main reason I say this is due to the fact that we had recently tested a major support level underneath, which is right around the 0.84 level. This is an area that people had paid attention to on longer-term charts via a monthly action, and perhaps even yearly. All things being equal, the idea that one of these currencies are actually going to suddenly take off against the other for a longer-term move is probably a bit of a stretch, mainly due to the fact that the US dollar is king at the moment, and I think it will continue to be so.
This brings me to the main reason to follow this pair, which of course is the fact that it can give you relative strength characterization of either the euro or the British pound, and then you can trade these currencies against the other ones using this information. In other words, both of them are weak against the US dollar, but the euro is weaker than the British pound, then the trade is to short the EUR/USD pair. This is a process called “triangulation”, that I have found to be very profitable over the longer term.
Gold price posts small gains early Tuesday, following a positive start to the Big week.
The US Dollar recovers overnight losses, as US Treasury yields retreat amid risk-off mood.
Gold traders turn cautious ahead of US jobs data, Fed Chair Powell’s speech.
Gold price regains key 21-day SMA, as the daily RSI flips bullish. 50-day SMA is the next topside barrier.
Gold price is looking to build on the previous upswing in the Asian session on Tuesday. Gold buyers, however, could turn cautious heading into the key US JOLTs Job Openings data and US Federal Reserve (Fed) Chair Jerome Powell’s speech later in the day.
All eyes turn to Fed Chair Jerome Powell’s speech
Despite the upbeat momentum in Gold price, buyers seem to be struggling, as the US Dollar recovers overnight losses amid a softer risk tone. The Greenback also capitalizes on the fresh leg higher in the USD/JPY pair, as the Japanese Yen continues to fall toward the 162.00 mark.
The latest gains in Gold price could be attributed to a retreat in the US Treasury bond yields across the curve, as traders resort to profit-taking ahead of critical US event risks. The benchmark US 10-year Treasury bond yields pull back after facing resistance at the key 4.50% level.
Looking ahead, the expected decline in the US JOLTs Job Openings data to 7.9M in May from April’s 8.05M could provide signs of some loosening in the labor market, fanning September Fed rate cut expectations. Powell’s words, however, in the Policy Panel at the European Central Bank (ECB) Forum in Sintra are likely to play a pivotal role in the Gold price action.
Markets are currently pricing in a 64% chance of the Fed cutting interest rates in September and another cut in December, according to the CME Group’s FedWatch Tool.
On Monday, Gold price witnessed a good two-way price movement, initially trading with caution starting a big week. Gold price also took a hit after the US Dollar jumped notwithstanding the mixed US ISM Manufacturing PMI data. The ISM’s manufacturing PMI slipped to 48.5 last month from 48.7 in May. The ISM Manufacturing Price Paid sub-index also dropped sharply to 52.1 in June from May’s 57.0, missing the expected 55.9 print.
However, the uptick of the US Dollar was short-lived, as traders weighed the downbeat data, which supported the Fed’s bets for a policy pivot as early as September. The renewed US Dollar weakness helped Gold price stage a decent recovery, further aided by a short-covering by the shorter-term traders and some perceived bargain buying in the cash market.
Gold price technical analysis: Daily chart
With the 14-day Relative Strength Index (RSI) regaining the 50 level and Gold price closing Monday above the 21-day Simple Moving Average (SMA) at $2,328, buyers are back in the game.
However, they need to seek a daily candlestick closing above the immediate 50-day SMA barrier at $2,338 to resume the recovery from the monthly low of $2,287.
The next relevant upside barrier is aligned at the $2,350 psychological level, above which the two-week high of $2,369 could be challenged.
On the flip side, the 21-day SMA resistance-turned-support at $2,328 could offer immediate cushion. A sustained move below the latter will test the previous day’s low of $2,319.
Additional declines could threaten the $2,300 threshold, below which the $2,290 support area will come into play. Around that level, the previous week’s low and the June low hang around.
Economic Indicator
Fed’s Chair Powell speech
Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018. Read more.
Gold price posts small gains early Tuesday, following a positive start to the Big week.
The US Dollar recovers overnight losses, as US Treasury yields retreat amid risk-off mood.
Gold traders turn cautious ahead of US jobs data, Fed Chair Powell’s speech.
Gold price regains key 21-day SMA, as the daily RSI flips bullish. 50-day SMA is the next topside barrier.
Gold price is looking to build on the previous upswing in the Asian session on Tuesday. Gold buyers, however, could turn cautious heading into the key US JOLTs Job Openings data and US Federal Reserve (Fed) Chair Jerome Powell’s speech later in the day.
All eyes turn to Fed Chair Jerome Powell’s speech
Despite the upbeat momentum in Gold price, buyers seem to be struggling, as the US Dollar recovers overnight losses amid a softer risk tone. The Greenback also capitalizes on the fresh leg higher in the USD/JPY pair, as the Japanese Yen continues to fall toward the 162.00 mark.
The latest gains in Gold price could be attributed to a retreat in the US Treasury bond yields across the curve, as traders resort to profit-taking ahead of critical US event risks. The benchmark US 10-year Treasury bond yields pull back after facing resistance at the key 4.50% level.
Looking ahead, the expected decline in the US JOLTs Job Openings data to 7.9M in May from April’s 8.05M could provide signs of some loosening in the labor market, fanning September Fed rate cut expectations. Powell’s words, however, in the Policy Panel at the European Central Bank (ECB) Forum in Sintra are likely to play a pivotal role in the Gold price action.
Markets are currently pricing in a 64% chance of the Fed cutting interest rates in September and another cut in December, according to the CME Group’s FedWatch Tool.
On Monday, Gold price witnessed a good two-way price movement, initially trading with caution starting a big week. Gold price also took a hit after the US Dollar jumped notwithstanding the mixed US ISM Manufacturing PMI data. The ISM’s manufacturing PMI slipped to 48.5 last month from 48.7 in May. The ISM Manufacturing Price Paid sub-index also dropped sharply to 52.1 in June from May’s 57.0, missing the expected 55.9 print.
However, the uptick of the US Dollar was short-lived, as traders weighed the downbeat data, which supported the Fed’s bets for a policy pivot as early as September. The renewed US Dollar weakness helped Gold price stage a decent recovery, further aided by a short-covering by the shorter-term traders and some perceived bargain buying in the cash market.
Gold price technical analysis: Daily chart
With the 14-day Relative Strength Index (RSI) regaining the 50 level and Gold price closing Monday above the 21-day Simple Moving Average (SMA) at $2,328, buyers are back in the game.
However, they need to seek a daily candlestick closing above the immediate 50-day SMA barrier at $2,338 to resume the recovery from the monthly low of $2,287.
The next relevant upside barrier is aligned at the $2,350 psychological level, above which the two-week high of $2,369 could be challenged.
On the flip side, the 21-day SMA resistance-turned-support at $2,328 could offer immediate cushion. A sustained move below the latter will test the previous day’s low of $2,319.
Additional declines could threaten the $2,300 threshold, below which the $2,290 support area will come into play. Around that level, the previous week’s low and the June low hang around.
Economic Indicator
Fed’s Chair Powell speech
Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018. Read more.
At the beginning of this week’s trading, with the US dollar’s gains halted slightly, the GBP/USD price is moving around 1.2685 at the time of writing.
It is recovering from last week’s close around 1.2644, a level not far from its lowest levels in six weeks, as investors assess new economic data and Britain’s political future.
According to the results of the economic calendar, the British economy grew by 0.7% in the first quarter, slightly more than the initial estimate of 0.6%, and the strongest growth in more than two years.
On the price front, the headline inflation rate fell to the Bank of England’s target of 2%. The Bank of England had kept interest rates unchanged, raising hopes for a rate cut in August based on comments from policymakers.
Politically, the UK is on the brink of a major reshuffle ahead of the July 4 elections, with polls predicting a landslide victory for the Labour Party led by Keir Starmer and a heavy defeat for the Conservative Party led by Rishi Sunak after 14 years in power.
According to market trading, the yield on the UK’s 10-year government bond rose to 4.14% on strong GDP figures, dampening expectations of interest rate cuts. Furthermore, the UK economy expanded by 0.7% in the first quarter of 2024, beating initial estimates of 0.6% and marking the strongest growth in more than two years. On the price front, the headline inflation rate fell to the Bank of England’s 2% target. Despite this, the Bank of England kept interest rates steady, leading to speculation of a possible rate cut in August.
With the July 4 election approaching, opinion polls are pointing to a landslide victory for Keir Starmer’s Labour Party and a major defeat for Rishi Sunak’s Conservatives after 14 years in power, signaling a major political realignment in Britain.
In contrast, the headline US inflation reading is helping advocates of a September rate cut. The Federal Reserve could consider cutting US interest rates in September, according to analysts reacting to the headline inflation reading that fell to a three-year low. According to an official announcement, the core personal consumption expenditures index in the US rose just 0.083% on a monthly basis in May, the BLS said, down from an upwardly revised 0.3% in April. Moreover, the figure was in line with the consensus (0.1%) and helped push the annual rate down to 2.6% from 2.8%, the lowest level in three years. Because the figure was in line with expectations, there was limited reaction in the bond and currency markets. Still, the data will help build the case for a Fed rate cut in September, some analysts say.
Meanwhile, Paul Ashworth, chief economist at Capital Economics says: “The return to the previous disinflationary trend and the renewed weakness in real activity are consistent with the Fed cutting rates in September,”
Particularly, the PCE is a important gauge of inflation for consumers and is therefore closely watched by the Fed. “Fed officials, who are responsible for managing inflation, prioritize the PCE over the CPI when setting the effective federal funds rate,” says Nigel Green, chief executive of DeVere Group.
Further refinement of the numbers shows the “super” measure — basic services excluding housing rents — slowing to 0.1% month-on-month, the slowest since August. Also, the data set includes figures showing consumption slowing as interest rates rise. recently, Real consumption rose 0.3% m/m in May, and Q2 consumption growth now trails at just 1.6%. Capital Economics estimates GDP growth has now slowed to 1.8% in Q2, “capping off a weak first half of the year. Like Biden, consumers appear to be stumbling at the wrong time, finally succumbing to the pressure of higher interest rates.”
Technical forecasts for the GBP/USD pair today:
Today’s bounce and based on the daily chart, GBP/USD has not broken out of the downtrend, which is supported by a move towards the 1.2600 support level. As we mentioned before, there will be no breakout from the downtrend without GBP/USD moving from the 1.2775 and 1.2830 resistance levels respectively. Technically, the move will remain in tight ranges until the reaction to the UK elections and the US jobs numbers are announced.
The euro has initially fell a bit during the trading session on Friday, to dip down below the 1.07 level yet again.
This is an area that has been important more than once, so I think it makes a certain amount of sense that we pay close attention to what happens when we drop below there.
During the Friday session, we have seen a lot of buyers step back into the market, and it suggests to me that we are not ready to truly break down. In other words, we unfortunately are still stuck in the same noisy sideways nonsense that we have been in for some time.
Technical AnalysisThe technical analysis for this pair is somewhat messy, just like the pair itself. It’s worth noting that the 1.07 level has been significant support, although it’s not the“be all end all” of support. Because of this, the market is likely to continue to see a lot of noisy behavior in this general vicinity, but at this point in time it looks like we could turn around. If we do continue to rally, I suspect that there are several areas that we will be paying close attention to.Top Forex Brokers
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The 50-Day EMA sits right around the 1.0775 level and is dropping. I think at this point, most traders will be looking at this for clues as to whether or not the target gets hit, or if it even holds as resistance. If it does hold as resistance, it will just continue to squeeze this market in very tight trading. After all, it is summer and that would not be a huge surprise. If we do rally from here, the 1.08 level is also an area that people will be paying close attention to as it is crucial time and time again.On the other hand, if we break down below the 1.0650 level, it opens up a move down to the 1.06 level underneath. Quite frankly, this is a market that continues to see a lot of back and forth between every 100 point level, and that should continue to be the case for moral we have seen.Ready to trade Euro to US Dollar ? We’ve shortlisted the best European brokers in the industry for you.MENAFN01072024000131011023ID1108395081
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On Wednesday, June 26, Bruegel Senior Fellow Alicia Garcia Herrero shared her views on effective measures to bolster the Yen, saying,
“Bank of Japan to start quantitative tightening, which could support the Yen more than intervention.”
While the BoJ and Japanese government grapple with weakness in the Yen, investor attention will also turn to upcoming US economic data. The stats could affect buyer demand for the US dollar. Labor market stats will be the focal point, which could ease selling pressure on the Yen if there are signs of cooling.
Will the US JOLTs Job Openings Report Raise Bets on a September Fed Rate Cut?
Investors will eye the US JOLTs Job Openings Report with keen interest later in the session on Tuesday.
Economists forecast JOLTs to report job openings to fall from 8.059 million in April to 7.900 million in May.
A significant drop in openings could indicate a weakening labor market. This, in turn, might impact wage growth and disposable income, potentially dampening consumer spending and demand-driven inflation.
Economists also anticipate a slight dip in job quits from 3.507 million to 3.500 million. In uncertain job markets, workers tend to hold on to their current positions, leading to fewer quits.
For perspective, job openings have fallen for four consecutive months to April. May 2023 saw openings at 9.824 million.
The focus now shifts to Powell and key US data releases.
Attention will also be on the second round of French elections.
The small uptick in the US Dollar (USD) caused the USD Index (DXY) to print humble gains and remain close to the 106.00 zone at the beginning of the week.
That said, the modest advance in the Greenback prompted EUR/USD to give away part of the strong earlier advance to multi-day peaks near 1.0780 as investors continued to digest the results from the French election on June 30.
Looking at the broader picture, the macroeconomic situation on both sides of the Atlantic remained stable, with the European Central Bank (ECB) considering further rate cuts beyond the summer amidst market expectations of two more rate cuts later in the year.
In contrast, market participants maintained their debate on whether the Federal Reserve (Fed) would implement one or two rate cuts this year, despite the Committee predicting just one cut, likely in December, at the June 12 meeting.
It’s worth noting that the ongoing move higher in the US Dollar is partly in response to hawkish comments from Fed officials, while the widening monetary policy gap between the Fed and other major central banks also contributed to the euro’s decline.
The CME Group’s FedWatch Tool indicates a probability of around 65% for lower interest rates in September versus a nearly 93% chance at the December 18 meeting.
In the short term, the recent ECB rate cut, compared to the Fed’s decision to maintain rates, has widened the policy gap between the two central banks, potentially leading to further weakness in EUR/USD.
However, the Eurozone’s emerging economic recovery and perceived weakening of US fundamentals are expected to reduce this disparity, potentially providing occasional support for the pair in the near future.
EUR/USD daily chart
EUR/USD short-term technical outlook
If bears hold control, EUR/USD may retest its June low of 1.0666 (June 26), then the May low of 1.0649 (May 1), and finally the 2024 bottom of 1.0601 (April 16).
Meanwhile, bouts of strength may put the pair on track to revisit the 200-day SMA at 1.0790, prior to the weekly high of 1.0852 (June 12) and the June top of 1.0916 (June 4). The breakout of this level might bring the March peak of 1.0981 (March 8) back into focus, ahead of the weekly high of 1.0998 (January 11) and the psychological 1.1000 yardstick.
So far, the 4-hour chart indicates some loss of impetus in the early bullish attempt. The initial resistance is 1.0776, followed by 1.0794. The initial support is at 1.0666, ahead of 1.0649 and 1.0601. The Relative Strength Index (RSI) slipped back to around 52.
The US Dollar kicked off the new trading week on the back foot.
Markets’ attention should remain on the ECB Forum and key US data.
XAU/USD appears side-lined around the $2,330 zone so far.
Spot Gold trades in an inconclusive fashion at the beginning of the week, as markets participants continued to gauge the results of the French elections on June 30, while key US data releases, the speech by Chair Powell and the ECB Forum in Portugal are all expected to keep price action around the precious metal under scrutiny in the upcoming few days.
Meanwhile, the dominating appetite for the risk-linked complex keeps the Greenback on the defensive, although the marked rebound in US yields across the curve prevents the yellow metal from gathering more convincing upside traction for the time being.
In the meantime, the US Dollar maintains its bearish stance after the final S&P Global Manufacturing PMI came in at 51.6 in June, while Construction Spending contracted by 0.1% in May vs. the previous month, and the always relevant ISM Manufacturing PMI retreated to 48.5 in the last month.
Moving forward, investors and the yellow metal are expected to closely follow Chief Powell’s participation at the ECB Forum in Sintra (Portugal) on July 2, the publication of the FOMC Minutes of the June 12 gathering and, finally, the release of the crucial Nonfarm Payrolls on July 5, all bearing in mind the potential interest rate path by the Fed in the latter part of the year.
XAU/USD short-term technical outlook
XAU/USD hovers around $2,330, and the daily chart shows the continuation of the consolidative phase for the time being. So far, the yellow metal should meet initial contention at the June low of $2,287. While the provisional 55-day SMA favours further range bound trade, both the 100-day AND 200-day SMAs at $2,258 and $2,123, respectively, suggest further upside might be on the table. In the same line, the Relative Strength Index (RSI) indicator surpassed the 50 threshold and kind of underpins the latter view.
Looking at the 4-hour chart, XAU/USD also looks side-lined in the short-term horizon. However, technical indicators keep pointing upward and seem to favour some fresh buying interest. The surpassing of recent tops around $2,340 should unveil a potential challenge to the key 200-SMA around $2,345.
Support levels: 2,308.30 2,293.50 2,279.60
Resistance levels: 2,337.00 2,344.25 2,368.76
The US Dollar kicked off the new trading week on the back foot.
Markets’ attention should remain on the ECB Forum and key US data.
XAU/USD appears side-lined around the $2,330 zone so far.
Spot Gold trades in an inconclusive fashion at the beginning of the week, as markets participants continued to gauge the results of the French elections on June 30, while key US data releases, the speech by Chair Powell and the ECB Forum in Portugal are all expected to keep price action around the precious metal under scrutiny in the upcoming few days.
Meanwhile, the dominating appetite for the risk-linked complex keeps the Greenback on the defensive, although the marked rebound in US yields across the curve prevents the yellow metal from gathering more convincing upside traction for the time being.
In the meantime, the US Dollar maintains its bearish stance after the final S&P Global Manufacturing PMI came in at 51.6 in June, while Construction Spending contracted by 0.1% in May vs. the previous month, and the always relevant ISM Manufacturing PMI retreated to 48.5 in the last month.
Moving forward, investors and the yellow metal are expected to closely follow Chief Powell’s participation at the ECB Forum in Sintra (Portugal) on July 2, the publication of the FOMC Minutes of the June 12 gathering and, finally, the release of the crucial Nonfarm Payrolls on July 5, all bearing in mind the potential interest rate path by the Fed in the latter part of the year.
XAU/USD short-term technical outlook
XAU/USD hovers around $2,330, and the daily chart shows the continuation of the consolidative phase for the time being. So far, the yellow metal should meet initial contention at the June low of $2,287. While the provisional 55-day SMA favours further range bound trade, both the 100-day AND 200-day SMAs at $2,258 and $2,123, respectively, suggest further upside might be on the table. In the same line, the Relative Strength Index (RSI) indicator surpassed the 50 threshold and kind of underpins the latter view.
Looking at the 4-hour chart, XAU/USD also looks side-lined in the short-term horizon. However, technical indicators keep pointing upward and seem to favour some fresh buying interest. The surpassing of recent tops around $2,340 should unveil a potential challenge to the key 200-SMA around $2,345.
The Japanese yen fell to around 161 yen per US dollar, breaking through this level for the first time since 1986, as the Ministry of Finance appointed Atsushi Mimura as Japan’s top currency diplomat, replacing Masato Kanda.
The appointment comes as the sharp decline in the value of the Japanese yen has put continued pressure on Japanese authorities to defend their currency, but they have so far appeared to have declined to intervene in foreign exchange markets after doing so in late April.
Earlier in the week, Finance Minister Shunichi Suzuki warned that sudden unilateral moves in the yen are undesirable and that authorities will take appropriate action if necessary.
According to Forex trading, the Japanese yen has lost more than 2% against the US dollar so far in June, continuing its year-to-date decline to around 14% as the Bank of Japan took a more dovish approach to normalizing monetary policy than markets had expected. Meanwhile, Japanese retail sales and industrial production data came in stronger than expected in May, while inflation in Tokyo accelerated in June.
On the economic calendar front, the US headline inflation reading is helping advocates of a September interest rate cut. The Federal Reserve could consider cutting US interest rates in September, according to analysts reacting to the headline inflation reading that fell to a three-year low. According to an official announcement, the US core personal consumption expenditures index rose by just 0.083% on a monthly basis in May, the BLS said, down from an upwardly revised 0.3% in April. Moreover, the figure was in line with consensus (0.1%) and helped push the annual rate down to 2.6% from 2.8%, the lowest in three years.
Because the figure was in line with expectations, there was little reaction in bond and currency markets. However, the data will help build the case for a Federal Reserve rate cut in September, some analysts say.
The PCE is a measure of inflation that is particularly important to consumers and is therefore closely watched by the Fed. “Fed officials, who are responsible for managing inflation, prioritize the PCE over the CPI when setting the effective federal funds rate,” says Nigel Green, CEO of DeVere Group.
Further refinement of the figures shows the “super” measure — basic services excluding housing rents — slowing to 0.1% on a monthly basis, the slowest since August. Also, the data set includes figures showing consumption slowing due to higher interest rates. Real consumption rose 0.3% month-on-month in May, and second-quarter consumption growth now trails at just 1.6%.
Capital Economics estimates GDP growth has now slowed to 1.8% in the second quarter, “capping off a weak first half of the year. Like Biden, consumers appear to be stumbling at the wrong time, finally succumbing to the pressure of higher interest rates.” Added, “That’s exactly what the Fed wants to see, and I think it’s clear now when you look at the data broadly that the inflation trajectory is firmly down. However, for a September cut, we’re really going to need to see a little bit more.”
Meanwhile, Kyle Chapman, FX analyst at Ballinger Group says: “This is the kind of number that’s going to be repeated over the next two or three prints to convince the Fed that 2% is within their reach,”.
However, Green of DeVere Group says the Fed will want to see more months of positive data before cutting rates. “Our previous forecast that the Fed will not cut rates until 2025 now appears to be gaining traction among a growing number of policymakers as well.”
“We are still not at the point where it is appropriate to cut rates,” Fed policymaker Michelle Bowman said last week. “Given the risks and uncertainties surrounding my economic outlook, I will remain cautious in my approach to considering future changes in the policy stance.” Also, she revealed that she is one of several Fed policymakers who do not see any cuts this year, making her one of four Fed policymakers who believe US interest rates will remain unchanged.
USD/JPY Technical analysis and Expectations Today
Last Thursday’s rally pushed the USD/JPY pair just above its 100-hour moving average. However, the pair still appears to have plenty of room to run before reaching overbought conditions on the 14-hour RSI. In the near term, based on the hourly chart, the USD/JPY pair is trading within an ascending channel formation. However, the 14-hour RSI still has room to run before reaching overbought conditions. Therefore, bulls will look to extend the current rally towards 161.29 or higher to the 161.88 resistance.
On the other hand, bears will look to pounce on pullbacks around 160.24 or lower at the 159.62 support. In the long term, based on the daily chart, USD/JPY continues to trade within an ascending channel. Also, the 14-day RSI appears to support a long-term bullish bias after entering overbought conditions. Therefore, bulls will target long-term gains around 162.57 or higher at the 164.39 resistance. On the other hand, bears will look to pounce on pullbacks around 158.85 or lower at 156.91.
