๐ Yen Appreciation Pauses, Market Seeks Next Direction
โ Market Overview
- Japan’s Consumer Price Index (CPI) met expectations, halting the rapid yen appreciation.
- Bank of Japan (BOJ) Governor Ueda’s remarks led to a sharp drop in long-term interest rates, shifting the flow to yen selling.
- USD/JPY briefly dropped to the low 149s but rebounded to recover the 150 level.
- Concerns over declining U.S. personal consumption are growing, keeping EUR/USD steady around the 1.05 level.
- EUR/JPY is trading at 157 yen, driven by yen selling.
๐ Key Points in Today’s Forex Market
๐ฏ 1. USD/JPY (US Dollar / Japanese Yen)
๐ Direction: Range-bound, fluctuating around the 150 level
๐ Movements:
- Japanese interest rates plunged following Governor Uedaโs statements, favoring yen selling.
- Depending on the U.S. PMI, the market could tilt towards either dollar strength or weakness.
๐ Focus: Selling pressure expected in the upper 150s, while buying interest may increase below 150.
๐ฏ 2. EUR/JPY (Euro / Japanese Yen)
๐ Direction: Heavy resistance, potential for increased selling pressure
๐ Movements:
- After briefly reaching the 158 level due to Uedaโs comments, the pair corrected to 157 yen.
- With the German general election approaching, euro selling pressure could intensify.
๐ Focus: Watch for a break below 157 yen, with potential for further correction towards the 155 range.
๐ฏ 3. EUR/USD (Euro / US Dollar)
๐ Direction: Steady, key support at the 1.05 level
๐ Movements:
- Concerns about declining U.S. personal consumption are leading to dollar selling and euro buying.
- Maintaining the 1.05 level strengthens expectations for a rally next week.
๐ Focus: A breakout above 1.0550 could open the path towards the 1.06 level.
๐ฏ 4. XAU/USD (Gold)
๐ Direction: Solid uptrend, supported by risk-off sentiment
๐ Movements:
- Continued demand for safe-haven assets due to the Ukraine situation and concerns over U.S. consumption.
๐ Focus: A break above $1950 could accelerate the move towards $2000.
๐ Key Events Today
๐ Economic Data
- 23:45 Manufacturing PMI (U.S.)
- A stronger-than-expected result could support the dollar.
- Conversely, weak data might bolster yen buying and dollar selling.
๐ Notable Speeches
- FOMC members are scheduled to speak, potentially impacting monetary policy outlooks.
๐ Summary
๐น USD/JPY is likely to trade in a range around 150, with potential moves triggered by PMI data.
๐น EUR/JPY could face increased selling pressure, especially ahead of the German elections.
๐น EUR/USD focus on maintaining the 1.05 level; strong PMI could shift the trend to dollar strength.
๐น Gold remains robust, with further gains possible if risk-off sentiment persists.
๐ Conclusion: The U.S. Manufacturing PMI release could set the tone for USD/JPY and EUR/JPY. A strategy of following the trend after the data release may prove effective.
