USD/JPY Hits Year-High in Subdued Markets
| Action Insight Mid-Day Report 8-29-23 |
USD/JPY Hits Year-High in Subdued Markets |
In a relatively uneventful trading day, the notable standout is the rally in the USD/JPY currency pair, which has now reached its highest level this year. The bullish momentum for Dollar against Yen raises questions about whether traders are positioning themselves ahead of crucial employment and inflation data set to be released from the US this week. An upside surprise in either of these indicators could add fuel to expectations for another Fed rate hike this year, even if not as soon as September. Meanwhile, Japanese Yen is facing some headwinds following a higher-than-expected unemployment rate in Japan, which has undoubtedly put some pressure on the currency. On the flip side, despite hawkish comments from incoming RBA Governor Michele Bullock, Australian Dollar is showing signs of weakness. Its near-term recovery appears to be stalling, raising prospects for further downside. Market participants will closely watch the upcoming monthly CPI data from Australia to gauge the currency's direction. New Zealand Dollar trails as the third weakest for the day, while Swiss Franc and Canadian Dollar claim spots as the second and third strongest currencies, respectively. Both Euro and Sterling are delivering a mixed performance. On the technical front, focus will shift to whether the U.S. Dollar's rally can gain broader momentum. Key levels to keep an eye on include a temporary low of 1.076 in EUR/USD, 1.2546 in GBP/USD, and a temporary top of 0.8874 in USD/CHF. Simultaneous break of these levels could firmly set the Dollar's tone leading into the highly anticipated non-farm payroll report due on Friday. In Europe, at the time of writing, FTSE is up 1.44%. DAX is up 0.20%. CAC is up 0.27%. Germany 10-year yield is down -0.0114 at 2.571. Earlier in Asia, Nikkei rose 0.18%. Hong Kong HSI rose 1.95%. China Shanghai SSE rose 1.20%. Singapore Strait Times rose 0.29%. Japan 10-year JGB yield dropped -0.0210 to 0.647. |
USD/JPY Mid-Day Outlook Daily Pivots: (S1) 145.83; (P) 146.30; (R1) 146.52; More... USD/JPY's rally accelerates to as high as 147.63 today so far. The strong break of 61.8% projection of 129.62 to 145.06 from 137.22 at 146.76 indicates solid underlying momentum. Intraday bias stays on the upside, and the rise from 127.20 should target a test on 151.93 high. On the downside, below 146.26 minor support will turn intraday bias neutral first. But near term outlook will remain mildly bullish as long as 144.52 support holds. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:30 | JPY | Unemployment Rate Jul | 2.70% | 2.50% | 2.50% | | 06:00 | EUR | Germany Gfk Consumer Sentiment Sep | -25.5 | -24.3 | -24.4 | -24.6 | | 13:00 | USD | S&P/Case-Shiller Home Price Indices Y/Y Jun | -1.50% | -1.70% | | 13:00 | USD | Housing Price Index M/M Jun | 0.20% | 0.70% | | 14:00 | USD | Consumer Confidence Aug | 116.5 | 117 |
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