In this article, we have covered the highlights of global market news about the USD/JPY, AUD/USD, EUR/USD and GBP/USD.
USD/JPY follows negative rates, hawkish BoJ worries close to 132.00, and attention to US inflation.
The USD/JPY recovers from its intraday low but is still trading at a little loss at 132.00 in the early hours of Tuesday am in Europe.
Before the Japanese government’s statements of Bank of Japan (BoJ) officials sparked hawkish fears and impacted the prices, the Yen pair celebrated the decline in Treasury bond rates. The widespread US Dollar decline as traders wait for a mild surprise from the US Consumer Price Index (CPI) for January benefits the USD/JPY bears as well.
The preliminary readings of Japan’s fourth quarter (Q4) Gross Domestic Product (GDP) figures earlier in the day showed a range of results. Afterward, the USD/JPY values were affected by Kazuo Ueda’s formal nomination as BoJ chief. According to a recent study by Bloomberg, the Bank of Japan’s (BoJ) cheap money strategy may face more problems under the upcoming Kazuo Ueda administration. It’s important to remember that Ueda most recently supported the existing monetary policy in a speech.
On the other hand, despite the US Federal Reserve’s (Fed) hawks’ continued defense of rate rise worries, the market’s pricing of slower rate increases and a peak that was closer had impacted the rates on US Treasury bonds. As a consequence, the US 10-year Treasury note rates, which had reversed from a one-month high the previous day, fell roughly two basis points to 3.69% at the latest.
AUD/USD consolidates above mid-0.6900s, US CPI expected.
The AUD/USD pair fails to build on Monday’s positive recovery from below 0.69000 and trades in a constrained range into Tuesday’s early European session. Spot prices are still below the psychological level of 0.7000, although the fall is still restrained due to some continued US Dollar selling.
In fact, despite the continued decrease in US Treasury bond rates, the USD Index, which measures the value of the US dollar against a basket of other currencies, retreats from a multi-week high reached on Monday. Nevertheless, impending recession worries discourage traders from making aggressive wagers on the risk-averse Australian dollar and limit the AUD/USD pair’s potential rise, at least for the time being.
Additionally, traders were uneasy due to concerns that the Federal Reserve would maintain its aggressive attitude for longer. Data on Friday confirmed the predictions, demonstrating that consumer prices increased in December instead of declining, as previously predicted. In addition, the one-year inflation forecasts reported in the University of Michigan poll increased this month from 3.9% to 4.2%.
EUR/USD Price Analysis: Bearish channel, 200-HMA challenge current run-up
As markets prepare for the preliminary readings of the US Consumer Price Index (CPI) for January and the fourth quarter (Q4) Gross Domestic Product (GDP) of the Eurozone on Tuesday morning, EUR/USD bulls maintain control. However, as of publication, the important currency pair has reached a new intraday high of 1.0740.
The successful breaking of the falling resistance line from February 03, which is now supported at 1.0700, may have contributed to the quote’s most recent gains. The positive MACD indications also favor the purchasers of the EUR/USD.
However, it’s essential to keep in mind that at 1.0780, a convergence of the 200-Hour Moving Average (HMA) meets the top line of a one-week-old falling trend channel to provide a challenging situation for the EUR/USD bulls.
The 1.0800 round number may serve as an additional filter to the north before leading the pair to the monthly top of about 1.1035.
On the other hand, a clear breach of the resistance-turned-support line, at the latest at 1.0700, isn’t an open invitation to the EUR/USD bears since the lower line of the channel above serves as the last line of defense for the purchasers of the Euro pair around 1.0655.
GBP/USD reaches a three-day high, trading above the mid-1.2100s, following generally positive UK employment data.
The GBP/USD pair gains momentum for a second straight day on Tuesday, building on the overnight substantial intraday rise of over 100 pips from the 1.2030 zone. Following the publication of the positive UK employment data, the pair gains further momentum and soars to a three-day high in the early European session, around the 1.2170 area.
According to data from the UK Office for National Statistics, 12.9 fewer persons received unemployment-related benefits in January. Additionally, the prior month’s data was drastically reduced to -3.2K from the first predicted 19.7 jumps. This more significantly supports the British Pound and helps to balance out the conflicting figures on wage growth in the UK.
On the other hand, the US Dollar is continuing its day-old retracement decline from a multi-week high, which is regarded as another driver driving the GBP/USD pair higher. However, any further advancement is more likely to be limited. Before the important US consumer inflation numbers are scheduled to be released later during the early North American session, traders may want to hold off on taking risky bets.
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