In this article, we have covered the highlights of global market news about the USD/JPY, NZD/USD, GBP/USD and AUD/USD.
USD/JPY Price Analysis: Further upside over 137.00 as the BoJ maintains an ultra-easy policy
After intense volatility caused by the Bank of Japan’s continued adoption of an ultra-easy monetary policy, the USD/JPY pair is now seeing a decline in volatility around the price of 136.65. (BoJ). Since domestic demand and salaries failed to drive inflation in the Japanese economy, BoJ Governor Haruhiko Kuroda maintained an expansionary monetary policy.
The US Dollar Index (DXY) is gaining momentum as it continues to rise over the 105.35 immediate resistance level. Investors are waiting for the publication of the United States Nonfarm Payrolls (NFP) data, which has resulted in a very calm Dollar Index. As concerns about the Federal Reserve (Fed) raising interest rates aggressively rise, losses in S&P500 futures steadily rise.
Meanwhile, a massive increase in demand for US government bonds has driven the 10-year US Treasury rates further lower to 3.82%.
On an hourly basis, the USD/JPY has sharply recovered from the upward-sloping trendline drawn from the low point of March 2006 at 135.37. The asset has continued to rise over the pivotal resistance level of 136.45, which has now become a stronghold for US Dollar supporters.
Given that the asset has scaled above the 20- and 50-period Exponential Moving Averages (EMAs) at 136.40 and 136.55, respectively, the rebound move in the USD/JPY is strong.
NZD/USD Market Analysis: Bears have 0.6060 on their radar as the death cross approaches
NZD/USD continues to retreat from mid-0.6100s from Thursday as bears tinker with the 0.6100 barriers in early Friday. Hence, the Kiwi pair explains why Thursday’s attempt to cross the swing low from late February was unsuccessful.
Yet, the death cross is shown by the 50-bar Exponential Moving Average (EMA), which pierces the 200-EMA from above, and forecasts further declines in the NZD/USD.
The RSI (14) line, however, is oversold. Thus the NZD/USD bears should keep an eye on the lows recorded in mid-November 2022, around 0.6060.
The Kiwi pair is more likely to fall towards the early November 2022 high at the 0.6000 psychological magnets if it fails to bounce off the 0.6060 support.
On the other hand, a downward-sloping resistance line from February 14 located at round number 0.6200 threatens the NZD/USD pair’s quick rebound.
GBP/USD Price Analysis: Bulls pause above 1.1900
The GBP/USD pair has been moving back and forth steadily since the late New York session, trading in a small range of 1.1904-1.1940. Investors are waiting for the publication of the United States Nonfarm Payrolls (NFP) and the United Kingdom’s manufacturing statistics for new impetus as the Cable has swung sideways.
With conflicting results from indices related to the US job market that have left investors uncertain about the labor market’s health, the US Dollar Index (DXY) is struggling to continue its rebound above 105.35. Initial Jobless Claims data showed a large increase on Thursday, while Reuters reported a four-fold planned layoff, all of which point to signals of a slowdown in the job situation and more demand for US Treasury bonds. The 10-year US Treasury rates have significantly decreased, approaching 3.83%.
On an hourly basis, the stretched rebound in the GBP/USD pair has run into the horizontal resistance marked from the low on February 17 at 1.1915. The Cable shows a phase of inventory adjustment, which may include the movement of inventory from institutional investors to retail players.
The Pound Sterling is supported at 1.1910 by the 20-period Exponential Moving Average (EMA).
Yet, after falling close to 60.00, the Relative Strength Index (RSI) (14) has yet to give up the positive range.
AUD/USD falls to a four-month low of 0.6560 as investors anticipate the US NFP report.
In the Asian session, the AUD/USD pair hit a new four-month low of 0.6563. As the US Dollar Index (DXY) has shown a recovery move after a fall to close to 105.13, the Australian asset is under tremendous pressure.
The Australian Dollar is having trouble standing on its own as the optimism surrounding China’s economic recovery is fading, and the Reserve Bank of Australia (RBA) believes the current monetary policy is restrictive enough to lower the sticky inflation, even though the recovery move from the USD Index is not strong enough.
The Dollar Index is having difficulty rising over 105.35. The greater tax burden backed by US President Joe Biden to boost the blue-collar sector has disappointed investors, and S&P500 futures have extended losses significantly. US Biden suggested raising the corporate tax rate from 21% to 28%. Affluent investors must now pay significant taxes as well. A severe sell-off in the basket of 500 US companies illustrates the gloomy state of the market.
Investors’ skepticism about the US job market has increased due to a surprising increase in the Initial Jobless Claims data reported on Thursday, increasing demand for US government bonds. The US labor market is becoming more complex right now, as seen by the 11% increase in unemployment claims, the highest level in the previous five months. Also, a four-fold scheduled layoff revealed by Reuters suggests that the job market’s strength is ebbing away.
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