At the beginning of the week, we started by buying CADJPY as planned.
It grew as expected and profits increased, but we were able to grow even more.
In such a simple market, I would like to take about twice as much as this time.
If you don’t seize the chance,
I can’t make up for the difficult market situation later.
In an easy-to-understand market, it is also necessary to play a bullish game.
Attention after the 6th is the following 2 points
- Pay attention to the rate hike of RBA
The May board meeting revealed that a 40 basis point (bp) rate hike was also considered. In a speech by his assistant to the RBA, Kent, after the agenda was released, he stated that the current monetary policy was very accommodative and “we have entered the stage of quantitative tightening.” The rate hike is the default route, but the focus will be on how much the rate hike will be.
The market has factored in raising the policy rate by at least 25bp to 0.60%, but the unemployment rate remains low at 3.9%, so the 40bp rate hike (policy) considered at the May meeting was also taken into consideration. There are also growing voices predicting that the interest rate will be raised to 0.75%).
If the rate hike was 25bp, the AUD expects a small move or a heavier upside. On the other hand, in the case of 40bp, it seems that it will react obediently by buying Australian dollars. Also, pay attention to whether it will be a hawkish statement.
Basically AUD buying perspective. However, depending on the rate hike on the 7th, there is a possibility that a big sale will be made temporarily. If there is a sale, I am thinking of buying and entering little by little when the selling is settled at AUDJPY.
- Focus on the US May Consumer Price Index
The dollar-yen pair will verify the “inflation peak theory” in the US consumer price index in May. The US consumer price index in May is expected to be 8.2% year-on-year, down from 8.3% in April and 8.5% in March.
If it was as expected, the “inflation peak theory” would be supported, but while the additional 0.50% rate hike in June and July is the default route, the possibility of a suspension of rate hikes at FOMC in September increases. Therefore, it seems to be a factor to suppress the upper price of the dollar yen.
However, if it exceeds expectations, the observation of an additional 0.50% rate hike at the September FOMC will increase. It is possible that the uptrend will resume after breaking out of the year-to-date high of 131.35 yen on May 9.
If it is perceived as a peak inflation, the USD will sell big. In that case, I am thinking of buying AUDUSD or selling USD CAD.
On the contrary, if the inflation rate continues to rise, buy USD. I think it’s easy to aim for buying USDJPY.
