Labor productivity saw a slight increase which counters the slight increase in wages paid so it is creating a bit of a stalemate on the data. Hence an initial lack of conviction in markets. That may change as the day transpires. I like the bid in Gbp on dips at least for now. See dow futures trying for 38500+ inevitably. Yields and such favor Usd overall in the bigger picture in my view so selling it is a bit of a contra-position.
At least for today the market internals (options-futures-forwards-yields) are on the bid side in Sterling, so if that doesn’t change the right approach would be buying into intra-day selling.
After FOMC and some not so clear blubber coming from the Feds, EUR is left hanging…
Because of Today’s USD Initial Jobless Claims and Friday’s Important EUR data, we might see continuous YoYo effects – Economic Data Calendar
Technically speaking, this does not look good for the EUR , and as we can see lower and lower Daily Highs in previous days, picture is slowly starting to get some sense…
1.06450 is the Major Support right now, and needs to be taken for a run to 1.04950
Only decisive break of 1.08350 would change this current picture.
Bank of Japan data suggested on Thursday indicated that they spent between $21 billion and $24 billion on Wednesday to pull the yen low – bringing the total for the week close to $60 billion, the amount it spent during a three-day salvo in late 2022.
A look at the day ahead in U.S. and global markets from Mike Dolan
Anxious bond traders seem to have taken solace from the Federal Reserve’s surprisingly sharp brake on its “quantitative tightening” process on Wednesday, while the yen capitalized on an easier dollar after what seemed like the second bout of Japanese intervention this week.
I am always on the lookout for patterns and one I watch is when a currency trades on both sides of a big figure (round number).
There is currently such a pattern in the EURUSD:
8 days trading on both sides of 1.07
4 closes below 1.07
3 closes above 1.07
No 2 days of consecutive closes above or below
I have found the longer a pattern like this goes on the greater risk of a directional move once it is decisively broken . So keep an eye on this levels as an 8 day pattern like this is a long one.
Notice how your sentiment changes (feels bid or offered) when EURUSD trades above or below 1.07.
TOKYO, May 2 (Reuters) – Japan will likely keep intervening to prop up the yen until the risk of speculators triggering a free fall in the currency has been eliminated, said a former central bank official who was involved in Tokyo’s market forays a decade ago.
NEW YORK (Reuters) – Federal Reserve Chairman Jerome Powell’s reassuring message following the central bank’s monetary policy meeting may not calm frazzled U.S. stock and bond investors, as uncertainty over the path of inflation intensifies the focus on upcoming data. Analysis-Powell’s soothing tone may not be enough for inflation-spooked markets
The BoJ is taking a risk of overplaying its hand by presumably slamming the market at its thinnest hour.
With that said, it is a warning to be on guard but unless it can get USDJPY below 155 (low on this round was 152.99, last at 155.10) it risks only restoring a two-way risk, not reversing it.
Technically, there is a lower top and a lower bottom so some damage done but still an aftershock unless sub-155 is established.
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