In this article, we have covered the highlights of global market news about the USD/JPY, AUD/USD, NZD/USD and USD/CAD.
USD/JPY eyes 141.00 as BOJ intervention chances rise and US PMI is released.
In the Tokyo session, the USD/JPY pair is exhibiting back-and-forth movements in a constrained range of 142.27-142.58. After reaching a low below 141.00, the asset made a retracement move. The Bank of Japan (BOJ) may continue to interfere in the currency markets to strengthen the yen, therefore the major is anticipated to test the safety of 141.00 once again.
The USD/JPY pair was precipitously pulled below 141.00 by the BOJ’s move to intervene in the currency markets for the first time since 1998. The BOJ, the second-largest FX reserve in the world, has enough weapons to sustain the yen indefinitely. The central bank made the decision to step in to stop the ongoing decline of the Japanese yen because it thinks the present price doesn’t reflect the fundamentals.
Following the declaration of the monetary policy, the BOJ began its intervention in the currency market. Continuing his dovish position on interest rates, BOJ Governor Haruhiko Kuroda said that the aggressive Federal Reserve (Fed) policy won’t have any impact on Japan’s economic condition. He said that the Japanese economy needs further policy easing since it is still recovering from the effects of the Covid-19 outbreak.
While investors wait for volatility to subside after the Fed’s very aggressive approach, the US dollar index (DXY) has remained flat at about 111.30. The overall bullish structure has been completely destroyed by the selling activity the DXY displayed on Thursday after reaching a new two-decade high of 111.81.
AUD/USD Price analysis: Aussie tests breakdown at 0.6670; fall continues into 0.6500
After hitting barriers around 0.6670 in the Asian session, the AUD/USD pair is now falling quickly. It is anticipated that the asset will hit a two-year low that was achieved on Thursday at 0.6574. The major is trying to show additional weakness after resetting its intraday bottom at 0.6616.
The aussie bulls have had a sharp decline on an hourly basis after exhibiting a classic test and drop of an expanding triangle chart pattern. The horizontal support turned resistance is now located from the September 16 low at 0.6670, while the upward sloping trendline of the widening triangle is shown from the September 16 high at 0.6724.
As a result of the asset’s decline below the 20-period Exponential Moving Average (EMA) at 0.6635, the Aussie bulls’ position has been worse.
NZD/USD falls near 0.5800 as DXY strengthens and US PMI rises.
With the US dollar index (DXY) having made a solid comeback, the NZD/USD pair is emerging from its bearish phase. The asset has been fluctuating in a small range between 0.5836 and 0.5857, and it is anticipated to provide a bearish break that would push it toward the important support level of 0.5800. Before, the asset saw a sharp decline after failing to hold above the critical level of 0.5880. The key move will be directed if the recent two-year low at 0.5804 is retested.
The momentum oscillators went oversold on tiny timeframes as the US dollar index (DXY) fell dramatically. The DXY is still inside the 111.13-111.44 consolidation area, and an upward breach of that range would push the asset towards a brand-new two-decade high at 111.81. As a result of the Federal Reserve’s (Fed) more aggressive than anticipated monetary policy, the DXY is gaining traction.
According to Fed policy, interest rates will reach their high at around 4.6%. The DXY is being supported by the market’s bearish sentiment being reinforced by the aim for an appropriate terminal rate structure, which has increased dramatically.
USD/CAD Price Analysis: Looking for a bull pennant on the 4H and 1.3545 resistance
In Friday’s early Asian trade, USD/CAD is marginally flat below 1.3500 as bulls take a break from their three-day streak of relentless gains.
US Treasury rates reached multi-year highs as a result of the Fed’s hawkish stance, pushing the US dollar index to new cycle highs of 111.81. The currency pair reached its highest level since July 2020 at 1.3544 as a result of stronger yields and the dollar.
Although WTI rose 1% on Thursday on rising Russia-Ukraine tensions and expectations for a pickup in Chinese demand, the gains swiftly disappeared. The major declined along with the sudden drop in the value of the US dollar. Following a significant decline in the USD/JPY pair brought on by the Japanese yen intervention, the dollar retreated from two-decade highs.
With an eye on the US S&P Global PMIs, the perception of the US dollar will likely continue to have a big influence on the main.
Technically speaking, the USD/CAD pair is teasing a bull pennant breakout on the four-hour chart while testing the resistance of the falling trendline around 1.3479.
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