Yen Extending Fall, Markets Eye RBA and BoE, US NFP This Week
| Action Insight Daily Report 7-31-23 |
Yen Extending Fall, Markets Eye RBA and BoE, US NFP This Week |
Yen extended its late last week's slide in Asian session today, a downward trajectory that prevailed despite a notable ascent in 10-year JGB yields above the 0.6% mark. Market watchers seemed to have absorbed BoJ's recent communication effectively — that the added flexibility to its yield curve control doesn't suggest an impending tightening cycle. As a result, Yen might stay under selling pressure in the short-term, especially if the ongoing investor enthusiasm about Japan's economic prospects, mirrored in the resilient Nikkei index, holds. Elsewhere in the currency markets, Swiss Franc and Euro trail Yen as the next weakest currencies, with Euro likely to react to today's release of Eurozone's CPI flash data. New Zealand and Australian Dollar are gaining strength, tracking a broad risk appetite in the market despite the continued sluggish economic momentum in China as indicated by PMI data. The picture for Sterling, Canadian and Dollar is more mixed at present, with these currencies awaiting potentially market-moving events including BoC rate decision and job data from both Canada and the US. Technically, EUR/CHF is worth some attention today. While a short term bottom could be in place at 0.9520, on bullish convergence condition in 4H MACD, it's way to early to call for trend reversal. Upside surprise in today's Eurozone CPI flash could prompt further recovery in the cross towards 0.9670 support turned resistance. But as long as this level holds, larger fall from 1.0095 is expected to resume through 0.9520 at a later stage. In Asia, at the time of writing, Nikkei closed up 126%. Hong Kong HSI is up 1.38%. China Shanghai SSE is up 0.36%. Singapore Strait Times is up 0.16%. Japan 10-year JGB yield is up 0.0594 at 0.610. |
GBP/JPY Daily Outlook Daily Pivots: (S1) 178.01; (P) 179.75; (R1) 183.18; More... Immediate focus is now on 182.51 resistance in GBP/JPY. Firm break there should confirm that whole corrective pattern from 183.99 has completed with three waves down to 176.29. Further rally should be seen through 183.99 to resume larger up trend. Break of 180.51 minor support will argue that the corrective pattern is extending with another falling leg. But overall, outlook will stay bullish as long as 38.2% retracement of 155.33 to 183.99 at 173.04holds, in case of another dip. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Industrial Production M/M Jun P | 2.00% | 2.40% | -2.20% | | 23:50 | JPY | Retail Trade Y/Y Jun | 5.90% | 5.40% | 5.70% | | 01:00 | CNY | NBS Manufacturing PMI Jul | 49.3 | 49.2 | 49 | | 01:00 | CNY | Non-Manufacturing PMI Jul | 51.5 | 53.1 | 53.2 | | 01:00 | NZD | ANZ Business Confidence Jul | -13.1 | -18 | | 01:00 | AUD | TD Securities Inflation M/M Jul | 0.80% | 0.10% | | 01:30 | AUD | Private Sector Credit M/M Jun | 0.20% | 0.40% | 0.40% | | 05:00 | JPY | Housing Starts Y/Y Jun | -0.20% | 3.50% | | 05:00 | JPY | Consumer Confidence Index Jul | 37 | 36.2 | | 06:00 | EUR | Germany Import Price Index M/M Jun | -0.80% | -1.40% | | 06:00 | EUR | Germany Retail Sales M/M Jun | -0.20% | 0.40% | | 08:00 | EUR | Italy GDP Q/Q Q2 P | 0.00% | 0.60% | | 08:30 | GBP | Mortgage Approvals Jun | 49K | 51K | | 08:30 | GBP | M4 Money Supply M/M Jun | 0.50% | 0.20% | | 09:00 | EUR | Eurozone GDP Q/Q Q2 P | 0.20% | -0.10% | | 09:00 | EUR | Eurozone CPI Y/Y Jul P | 5.30% | 5.50% | | 09:00 | EUR | Eurozone CPI Core Y/Y Jul P | 5.40% | 5.50% | | 13:45 | USD | Chicago PMI Jul | 43.5 | 41.5 |
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