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?

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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.

Download the Latest IG Sentiment Report and discover how daily and weekly shifts in market sentiment can impact the price outlook:

Change in	Longs	Shorts	OI
Daily	-8%	5%	3%
Weekly	4%	-3%	-2%

What does it mean for price action?

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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.

• GBP/USD gathered recovery momentum in the European session on Wednesday.
• Annual CPI inflation in the UK edged lower to 3.2% in March.
• The pair could encounter strong resistance at 1.2500.

GBP/USD gained traction in the early European session on Wednesday and climbed above 1.2450. The near-term technical outlook points to a buildup of recovery momentum but the pair could face stiff resistance at 1.2500.

The UK’s Office for National Statistics (ONS) reported on Wednesday that inflation, as measured by the change in the Consumer Price Index (CPI), declined to 3.2% in March from 3.4% in February. This reading came in above the market expectation of 3.1%. Furthermore, the core CPI, which excludes volatile food and energy prices, rose 4.2% in the same period, compared to analysts’ estimate of 4.1%. With the immediate reaction to these readings, Pound Sterling gathered strength against its rivals.

In the meantime, the US Dollar struggles to find demand and helps GBP/USD edge higher as market mood improves midweek. The UK’s FTSE 100 Index is rising more than 0.5% on the day and US stock index futures are up between 0.2% and 0.4%.

In the absence of high-tier data releases from the US, GBP/USD could hold its ground in case risk flows continue to dominate the action in financial markets.

Investors will also keep a close eye on the developments surrounding the Iran-Israel conflict. Israel is expected to hold a cabinet meeting to decide how they will respond to Iran’s retaliatory attack over the weekend. If geopolitical tensions escalate further in the Middle East, the USD could regather its strength and limit GBP/USD’s upside.

GBP/USD Technical Analysis

GBP/USD rose above the 20-period Simple Moving Average (SMA) on the 4-hour chart for the first time in a week and the Relative Strength Index advanced toward 50, reflecting a buildup of recovery momentum.

On the upside, 1.2500 (former support, psychological level) aligns as immediate resistance. If GBP/USD manages to flip that level into support, it could extend its recovery toward 1.2560 (static level) and 1.2580 (200-day SMA, upper limit of the descending channel).

First support is located at 1.2400 (psychological level, static level) ahead of 1.2380 (lower limit of the descending channel).

 

• GBP/USD gathered recovery momentum in the European session on Wednesday.
• Annual CPI inflation in the UK edged lower to 3.2% in March.
• The pair could encounter strong resistance at 1.2500.

GBP/USD gained traction in the early European session on Wednesday and climbed above 1.2450. The near-term technical outlook points to a buildup of recovery momentum but the pair could face stiff resistance at 1.2500.

The UK’s Office for National Statistics (ONS) reported on Wednesday that inflation, as measured by the change in the Consumer Price Index (CPI), declined to 3.2% in March from 3.4% in February. This reading came in above the market expectation of 3.1%. Furthermore, the core CPI, which excludes volatile food and energy prices, rose 4.2% in the same period, compared to analysts’ estimate of 4.1%. With the immediate reaction to these readings, Pound Sterling gathered strength against its rivals.

In the meantime, the US Dollar struggles to find demand and helps GBP/USD edge higher as market mood improves midweek. The UK’s FTSE 100 Index is rising more than 0.5% on the day and US stock index futures are up between 0.2% and 0.4%.

In the absence of high-tier data releases from the US, GBP/USD could hold its ground in case risk flows continue to dominate the action in financial markets.

Investors will also keep a close eye on the developments surrounding the Iran-Israel conflict. Israel is expected to hold a cabinet meeting to decide how they will respond to Iran’s retaliatory attack over the weekend. If geopolitical tensions escalate further in the Middle East, the USD could regather its strength and limit GBP/USD’s upside.

GBP/USD Technical Analysis

GBP/USD rose above the 20-period Simple Moving Average (SMA) on the 4-hour chart for the first time in a week and the Relative Strength Index advanced toward 50, reflecting a buildup of recovery momentum.

On the upside, 1.2500 (former support, psychological level) aligns as immediate resistance. If GBP/USD manages to flip that level into support, it could extend its recovery toward 1.2560 (static level) and 1.2580 (200-day SMA, upper limit of the descending channel).

First support is located at 1.2400 (psychological level, static level) ahead of 1.2380 (lower limit of the descending channel).

 

According to the CME FedWatch Tool, the probability of a June Fed rate cut fell from 20.7% to 18.8% on Tuesday, April 16. On Tuesday, April 9, there was a 56.1% chance of a June Fed rate cut.

Bets on a September also turned less dovish The probability of the Fed leaving interest rates at 5.50% increased from 28.6% to 31.5% on Tuesday, April 16. On April 9, the chances of the Fed leaving interest rates unchanged stood at 8.5%.

While Fed speakers will draw investor attention, news updates from the Middle East also need consideration.

Short-term Forecast

Near-term trends for the USD/JPY hinge on central bank chatter amid falling bets on a 2024 Fed rate cut. However, news updates from the Middle East also warrant investor attention amid threats of retaliation against the Saturday attack.

USD/JPY Price Action

Daily Chart

The USD/JPY sat well above the 50-day and 200-day EMAs, confirming the bullish price trends.

A USD/JPY break above the April 17 high of 154.722 could support a move to the 155 handle.

Trade data from Japan, the Japanese government chatter, Middle East-related news, and central bank commentary need investor consideration.

Conversely, a USD/JPY drop below the 153.5 handle could give the bears a run at the 151.685 support level.

The 14-day RSI at 79.40 shows the USD/JPY in overbought territory. Selling pressure could intensify at the April 17 high of 154.722.

• The British pound continues to grind higher against the Japanese yen as the interest rate differential by far is the biggest driver.
• At this point, I think it’s probably only a matter of time before we break out to the upside, but it’s also worth noting that the market has been very noisy.
• In general, I think short-term pullbacks end up being a nice opportunity to get long of this market yet again.

The 50-day EMA sits at roughly 190 yen, and I think that is an area that a lot of people will be paying attention to. After all, it is a large round figure and of course it is also an area that I think a lot of people will be looking at as a previous noise that could come in and offer a bit of market memory.

A Break to the Upside

• 

If we do break out to the upside and clear the 194 yen level, then I think the British pound will take on the 195 yen level and then eventually go looking to 200 yen, which very well could be its destination. In general, I think this is a scenario that traders continue to look at with interest and continue to get paid at the end of every session .Therefore it will continue to attract a lot of inflows as every dip seems to be a bit of a value proposition. If we were to break down below the 190 yen level, then we could see a significant fall from there but still more likely than not will just be a buy on the dip opportunity.

In general, this is a market that pays quite nicely in swap at the end of every session, and therefore I think it makes a lot of sense for the pair to continue higher, eventually. The interest rate differential will continue to be wide enough to drive a truck through, and therefore you will continue to see a lot of upward momentum, or at least see a lack of selling going forward. I have no interest in shorting this pair anytime soon.

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• EUR/USD challenged the 1.0600 zone, or yearly lows.
• The Greenback gathered extra pace and rose to fresh tops.
• Fed’s Powell highlighted the performance of the US economy.

For the sixth consecutive session, EUR/USD continued to face downward pressure, slipping to levels near 1.0600 and marking new lows for 2024 amidst the ongoing strength of the US Dollar (USD).

This strengthening of the Greenback occurred as investors reconsidered the timing of a potential rate cut by the Federal Reserve (Fed), now anticipated to happen later than previously thought, potentially in December.

This reassessment coincided with a rise in US yields across the yield curve and a more robust narrative regarding the divergence of monetary policy between the Fed and other G10 central banks, notably the European Central Bank (ECB).

Against that backdrop, a surge in the Greenback propelled the USD Index (DXY) to attain fresh year-to-date highs near 106.50, supported by recent higher-than-expected US inflation figures reported in March.

Regarding the ECB, members Rehn and Makhlouf have suggested a possible June rate reduction if inflation trends towards 2%, with a 25-bps cut if the CPI trend persists. Board member Villeroy anticipated further adjustments, while President Lagarde believed the ECB will implement rate cuts soon unless significant unforeseen developments occur.

Around the Fed, at an event hosted at The Wilson Center in Washington, Chair Powell stated that the recent data have not provided them with increased confidence; rather, they suggest that it will likely take more time than anticipated to attain that confidence.

Looking ahead, the relatively subdued economic fundamentals in the eurozone, combined with the resilience of the US economy, reinforce expectations for a stronger Dollar in the medium term, especially considering the prospect of the ECB lowering rates before the Fed. In such a scenario, EUR/USD is expected to undergo a more significant decline from a short-term perspective.

EUR/USD daily chart

EUR/USD short-term technical outlook

The collapse of the 2024 low of 1.0601 (April 16) may place a return to the November 2023 low of 1.0516 (November 1) on the radar before the weekly low of 1.0495 (October 13, 2023), the 2023 bottom of 1.0448 (October 3), and the round milestone of 1.0400.

On the upside, EUR/USD is expected to face early resistance at the important 200-day SMA of 1.0825, followed by the April high of 1.0885 (April 9), the March top of 1.0981 (March 8), and the weekly high of 1.0998 (January 11), all before reaching the psychological barrier of 1.1000. Further gains from here may threaten the December 2023 high of 1.1139 (December 28).

The 4-hour chart reveals that the bearish trend continues for the time being. Against it, the initial support arrives at 1.0601, followed by 1.0516. In the opposite direction, there is an initial up-barrier at 1.0665, ahead of 1.0756 and the 55-SMA at 1.0763. The Moving Average Convergence Divergence (MACD) moved deeper into the negative zone, while the Relative Strength Index (RSI) dropped below 30.

• EUR/USD challenged the 1.0600 zone, or yearly lows.
• The Greenback gathered extra pace and rose to fresh tops.
• Fed’s Powell highlighted the performance of the US economy.

For the sixth consecutive session, EUR/USD continued to face downward pressure, slipping to levels near 1.0600 and marking new lows for 2024 amidst the ongoing strength of the US Dollar (USD).

This strengthening of the Greenback occurred as investors reconsidered the timing of a potential rate cut by the Federal Reserve (Fed), now anticipated to happen later than previously thought, potentially in December.

This reassessment coincided with a rise in US yields across the yield curve and a more robust narrative regarding the divergence of monetary policy between the Fed and other G10 central banks, notably the European Central Bank (ECB).

Against that backdrop, a surge in the Greenback propelled the USD Index (DXY) to attain fresh year-to-date highs near 106.50, supported by recent higher-than-expected US inflation figures reported in March.

Regarding the ECB, members Rehn and Makhlouf have suggested a possible June rate reduction if inflation trends towards 2%, with a 25-bps cut if the CPI trend persists. Board member Villeroy anticipated further adjustments, while President Lagarde believed the ECB will implement rate cuts soon unless significant unforeseen developments occur.

Around the Fed, at an event hosted at The Wilson Center in Washington, Chair Powell stated that the recent data have not provided them with increased confidence; rather, they suggest that it will likely take more time than anticipated to attain that confidence.

Looking ahead, the relatively subdued economic fundamentals in the eurozone, combined with the resilience of the US economy, reinforce expectations for a stronger Dollar in the medium term, especially considering the prospect of the ECB lowering rates before the Fed. In such a scenario, EUR/USD is expected to undergo a more significant decline from a short-term perspective.

EUR/USD daily chart

EUR/USD short-term technical outlook

The collapse of the 2024 low of 1.0601 (April 16) may place a return to the November 2023 low of 1.0516 (November 1) on the radar before the weekly low of 1.0495 (October 13, 2023), the 2023 bottom of 1.0448 (October 3), and the round milestone of 1.0400.

On the upside, EUR/USD is expected to face early resistance at the important 200-day SMA of 1.0825, followed by the April high of 1.0885 (April 9), the March top of 1.0981 (March 8), and the weekly high of 1.0998 (January 11), all before reaching the psychological barrier of 1.1000. Further gains from here may threaten the December 2023 high of 1.1139 (December 28).

The 4-hour chart reveals that the bearish trend continues for the time being. Against it, the initial support arrives at 1.0601, followed by 1.0516. In the opposite direction, there is an initial up-barrier at 1.0665, ahead of 1.0756 and the 55-SMA at 1.0763. The Moving Average Convergence Divergence (MACD) moved deeper into the negative zone, while the Relative Strength Index (RSI) dropped below 30.

EUR/USD Current price: 1.0637

• The odds for a Federal Reserve rate cut in July declined below 50%.
• Encouraging German data provided near-term support to the Euro.
• EUR/USD recovered after flirting with 1.0600, bullish scope limited.

The EUR/USD pair extended its 2024 slide to 1.0601, its lowest since last November, but bounced back from the level during European trading hours. The US Dollar benefited from a sour market mood, the latter fueled by mounting tensions in the Middle East and reduced hopes for a soon-to-come Federal Reserve (Fed) rate cut.

After a war cabinet meeting, Israel is set to prepare a “forceful” response to Iran’s massive aerial attack on Saturday. The decision goes against Western allies’ recommendations to de-escalate the conflict. Meanwhile, solid United States (US) macroeconomic data pushes away the odds for a rate cut. Financial markets are losing hope that the central bank will act in July,  as the CME Group FedWatch Tool shows 51.3% odds of a no-change. The odds for a steady June decision currently stand at 79.1%

The EUR/USD pair advanced up to 1.0646 following the release of German data. The country released the March Wholesale Price Index, which rose 0.2% MoM, and the ZEW Survey on Economic Sentiment, which improved to 42.9 in April from 31.7 previously. Sentiment in the Eurozone was also better than anticipated, advancing from 33.5 in March to 43.9 in April. Finally, the German assessment of the Current Situation bounced modestly, printing at -79.2, following -80.5 in the previous month.

 Across the pond, the US released March Building Permits and Housing Starts, down 4.3% and  14.7%, respectively. Later in the day, the country will publish March Capacity Utilization and Industrial Production, while Fed Chairman Jerome Powell is due to participate in a fireside chat about economic trends in North America at the Wilson Center’s Washington Forum.

EUR/USD short-term technical outlook

The EUR/USD pair extended gains following US data to 1.0651 but eased from the level. The daily chart offers a limited bullish potential. The latest advance seems corrective, as technical indicators barely bounce from oversold readings, lacking momentum enough to confirm an interim bottom. At the same time, EUR/USD develops below all its moving averages, with the 20 Simple Moving Average (SMA) extending its downward slope below the longer ones.

In the near term, and according to the 4-hour chart, the ongoing advance seems also corrective. EUR/USD pared gains below a firmly bearish 20 SMA, while the longer moving averages keep heading south far above the shorter one. Finally, the Momentum indicator advances within negative levels, but the Relative Strength Index (RSI) indicator consolidates around 33, suggesting absent buying interest.

Support levels: 1.0600 1.0570 1.0530

Resistance levels: 1.0665 1.0700 1.0745

EUR/USD Current price: 1.0637

• The odds for a Federal Reserve rate cut in July declined below 50%.
• Encouraging German data provided near-term support to the Euro.
• EUR/USD recovered after flirting with 1.0600, bullish scope limited.

The EUR/USD pair extended its 2024 slide to 1.0601, its lowest since last November, but bounced back from the level during European trading hours. The US Dollar benefited from a sour market mood, the latter fueled by mounting tensions in the Middle East and reduced hopes for a soon-to-come Federal Reserve (Fed) rate cut.

After a war cabinet meeting, Israel is set to prepare a “forceful” response to Iran’s massive aerial attack on Saturday. The decision goes against Western allies’ recommendations to de-escalate the conflict. Meanwhile, solid United States (US) macroeconomic data pushes away the odds for a rate cut. Financial markets are losing hope that the central bank will act in July,  as the CME Group FedWatch Tool shows 51.3% odds of a no-change. The odds for a steady June decision currently stand at 79.1%

The EUR/USD pair advanced up to 1.0646 following the release of German data. The country released the March Wholesale Price Index, which rose 0.2% MoM, and the ZEW Survey on Economic Sentiment, which improved to 42.9 in April from 31.7 previously. Sentiment in the Eurozone was also better than anticipated, advancing from 33.5 in March to 43.9 in April. Finally, the German assessment of the Current Situation bounced modestly, printing at -79.2, following -80.5 in the previous month.

 Across the pond, the US released March Building Permits and Housing Starts, down 4.3% and  14.7%, respectively. Later in the day, the country will publish March Capacity Utilization and Industrial Production, while Fed Chairman Jerome Powell is due to participate in a fireside chat about economic trends in North America at the Wilson Center’s Washington Forum.

EUR/USD short-term technical outlook

The EUR/USD pair extended gains following US data to 1.0651 but eased from the level. The daily chart offers a limited bullish potential. The latest advance seems corrective, as technical indicators barely bounce from oversold readings, lacking momentum enough to confirm an interim bottom. At the same time, EUR/USD develops below all its moving averages, with the 20 Simple Moving Average (SMA) extending its downward slope below the longer ones.

In the near term, and according to the 4-hour chart, the ongoing advance seems also corrective. EUR/USD pared gains below a firmly bearish 20 SMA, while the longer moving averages keep heading south far above the shorter one. Finally, the Momentum indicator advances within negative levels, but the Relative Strength Index (RSI) indicator consolidates around 33, suggesting absent buying interest.

Support levels: 1.0600 1.0570 1.0530

Resistance levels: 1.0665 1.0700 1.0745

• For the second week in a row, the GBP/USD pair has been completing its strong downward correction path, which has pushed it towards the 1.2425 support level, its lowest in five months.
• The strong downward pressure is attributed to the US dollar, which is responsible, but the pace of recent advances may be a case of “too fast, too early” and there could be a potential pullback this week.

Commenting on GBP/USD performance, Shaun Osborne, Senior FX Analyst at Scotiabank, says: “The technical bearish close for sterling during the week, and perhaps more importantly, the clear break below the 1.25 support area that had underpinned sterling for several months leaves sterling vulnerable to further weakness.” “Support lies at the 1.2465 area – a 50% retracement of sterling’s Q4 rally. However, a return to the 1.22/1.23 range is a risk.”

According to forex trading platforms, the driving force behind the US dollar’s advance was the massive repricing in Fed expectations that followed Wednesday’s US inflation report, which ignited volatility and pushed the dollar higher. Markets have ruled out a Fed rate hike in June and are now seeing only one or two Fed hikes in 2024, while maintaining expectations for the Bank of England and other central banks to cut rates more aggressively.

The US dollar’s strength is only being reinforced by the creeping fear sweeping through equity markets that the 2024 rally must give way to the realities of a higher US interest rate regime for a longer period. We need to respect this repricing process, and the recent momentum could lead to further US dollar gains this week. However, with jobs and inflation reports behind us, we believe the catalysts needed for further significant gains will be lacking, and this could provide some welcome support for sterling in this week’s trading.

According to the results of the economic calendar data, we will watch the release of US retail sales at the start of the week and any strong reading here will only confirm that strong consumer demand is driving the ongoing rise in inflation. Moreover, the recent US dollar advance could extend if the data beats the consensus 0.3% month-on-month forecast.

Today, we are looking for volatility in GBP/USD as important UK wage figures for February are released. The Bank of England has been cautious about cutting rates for fear that wages are running too high and supporting domestic inflation rates. If the figures come below expectations, the market will be more comfortable with the idea of a June rate cut, which could weaken GBP/USD. Also, Tuesday sees a speech by Bank of England Governor Andrew Bailey, which will give him the opportunity to address the issue of potential rate cuts by the bank in the coming months.

• 

There is no BoE decision scheduled for April, making this speech important as it will serve as a bridge to the May meeting. Any sign of increased confidence in the possibility of cutting rates without triggering inflation is likely to weaken GBP/USD. Wednesday brings another appearance by Bailey and a speech by fellow MPC member Haskel. The most important inflation data out of the UK on Wednesday will be the focus of the forex market this week: needless to say, any downward revision from expectations will weigh on the British currency.

Any reading above the consensus (consensus = 2.9% year-on-year) would give GBP/USD a boost as it would shift the balance of probabilities for the first rate cut from June to August, putting the BoE behind the ECB in terms of cutting rates. Therefore, the start of a rate-cutting cycle.

The week ends with the UK retail sales release, which, on several occasions in the recent past, has provoked a greater reaction to the pound than to inflation or wages. According to analysis from UniCredit Bank, British retail sales volumes are likely to rise by 0.6% month-on-month in March, supported by the early timing of Easter, which is likely to lift food sales.

Technical forecasts for the GBP/USD pair today:

The drop in the GBP/USD exchange rate below the 200-day moving average last week means that the pair is now in a downtrend according to the rules of this week’s forecast for the British pound. Therefore, we see the broader trend for the currency pair to be lower from here, with highs considered counter-trend corrections that provide tactical opportunities. The chart attached shows that the price of the British pound has finally broken below the psychological support level of 1.25, which is considered a horizontal support line that defines the 2024 range, a development that also calls for further weakness. From the support level of 1.2380, cautious thinking about buying the currency pair will begin. Ultimately, considering that the reaction to the results of British economic data and the future of central bank policies will have an impact on the performance of the sterling dollar in the coming days.

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• The sharp uptrend in the price of the US dollar against the Japanese yen USD/JPY continued, with gains reaching the resistance level of 154.44, the highest for the currency pair in 34 years.
• It surpassed levels of Japanese intervention in currency markets to halt the collapse of the Japanese yen, as was the case in the latest steps.

USD/JPY performance is facing pressure from the strong dollar price, as stubborn inflation in the United States has raised concerns that the Federal Reserve will keep interest rates high for longer. This contrasts with other major global central banks, which are expected to start easing soon, while the Bank of Japan has indicated that it will maintain its accommodative monetary settings for some time. Also, the Bank of Japan has ruled out using rate hikes to support the yen. These developments came even after Japan ended eight years of negative interest rates and scaled back asset purchases.

Meanwhile, Japanese Finance Minister Shunichi Suzuki said he was monitoring currency movements closely, reiterating that authorities were “fully prepared” to respond appropriately.

On the other hand, US stock market indices closed in the red on Monday, extending the previous week’s losses. According to stock trading platforms, the Dow Jones fell 248 points, the S&P 500 fell 1.2%, and the Nasdaq fell 1.8%. Investors were digesting US retail sales for March, which came in above expectations, suggesting that interest rates may stay higher for longer than expected.

Also, concerns about potential Israeli retaliation weighed on markets, following Iranian missile and drone strikes on Israel over the weekend.

On the other hand, the earnings season has entered its second week, with Goldman Sachs shares jumping by 2.9% after announcing a 28% jump in first-quarter profits. Charles Schwab rose 1.7% after earnings and revenue slightly beat estimates, while JP Morgan rose. Conversely, Tesla stock fell by 5.6% after news that the company was laying off more than 10% of its workforce around the world. Apple stock fell by 2.2%.

• 

USD/JPY Technical Analysis and Expectations Today:

Amid the continuation of the sharply bullish outlook, the strongest focus will remain on Japan’s next steps to stop the collapse of the price of the Japanese yen. So far, the intervention is still verbal and the gains of the US dollar against the Japanese yen “USD/JPY” continue, as the factors of strength of the US dollar against the rest of the other major currencies continue and expand. Technically, the general trend may remain upward until there is actual Japanese intervention in the markets to prevent the collapse of the yen exchange rate. According to the current trend, the closest resistance levels will be 154.65, 155.20, and 156.00, respectively, and I still prefer to think about selling the currency pair without risk.

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Today, the GBP/USD pair has declined by 0.20%, with the current price at 1.24193, positioning itself below the critical pivot point at $1.24965. If the pair climbs above this level, it could face resistance at $1.25786, with further barriers at $1.27051 and $1.28006.

On the downside, the first line of support is located at $1.23731, with additional support levels at $1.22853 and $1.21924. The 50-day and 200-day Exponential Moving Averages are at $1.25466 and $1.26269 respectively, suggesting underlying bearish pressures. A move above $1.24965 might shift the sentiment to a more bullish outlook.

For a look at all of today’s economic events, check out our economic calendar.

The Pound to Euro (GBP/EUR) exchange rate challenged key resistance around 1.1765 in February and March but has, so far, failed to repeat this in April.

Rabobank sees little near-term headway, but also expects that it will strengthen to 1.1900 over the second half of 2024 as the ECB cuts rates.

Rabobank notes that the Labour Party has a very strong lead in opinion polls and is in a very strong position to win an election later this year.

Along with RBC Capital Markets, the bank notes that a new labour government would have very little room for manoeuvre on fiscal policy.

RBC considered that this would be negative for the Pound due to a hit on growth, but Rabobank considers that this would be more constructive as there would be an element of policy continuity.

Rabobank warns of the risk of further bouts of risk aversion due to Middle East tensions which would tend to undermine GBP/USD, but GBP/EUR should be resilient.

Looking at monetary policy, Rabobank notes that the Pound has benefitted from expectations that the ECB is more likely than the Bank of England (BoE) to cut interest rates in June.

Current market pricing indicates around a 50% chance of a BoE while the ECB pricing is at least 75%.

Key Quotes:

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“We raise our Q1 growth forecast to 0.4% quarter-to-quarter after last week’s GDP data.”
“That would comfortably beat the MPC’s projection of 0.1% growth in both quarters.”

“The stance of monetary policy could remain restrictive even if Bank Rate were to be reduced.”

“GDP in February reached the average level seen in Q2 2023, meaning the economy has already recovered.”

“The MPC can still cut interest rates as inflation and wages slow.”

“Returning growth won’t stop the MPC cutting rates but will keep it to a one-cut-per-quarter pace.”

“The resilience of the US economy and ‘too high’ inflationary pressures in the US has led to a huge change in market expectations.”

“We continue to expect 0.3% quarter-to-quarter growth in Q2.”