(Brad Alexander – FX Large Limited)
We will look at USD pairs in a minute but we can see this big fall in the USD Index last week.
Everyone was waiting for the US Consumer Price Index figures, to get the best reading on inflation, and the number came out much better than expected.
This was good news for everyone from the US Federal Reserve, to Emerging Markets in USD debt, to investors and to consumers as the Fed may be able to slow down on its Interest Rate rises.
This week everyone will be watching Wednesday’s FOMC meeting for information on the Fed’s upcoming monetary policy.
The USD has since recovered and it looks like a good technical opportunity might be happening.
The same can be said of EURUSD which rose and fell back to this lower trend line.
And the same with GBPUSD which rose and fell back to support at $1.21.
NZDUSD had the biggest jump in price action and the reason is that we expect the Reserve Bank of New Zealand to raise Interest Rates to 3% on Wednesday.
We had some good news from Japan with positive GDP numbers this morning and we will be watching Employment figures from the European Union and Australia.
Also, Retail Sales from the US, the UK, and Canada will give investors a good idea of economic activity so keep an eye on those currencies respectively.
Overall, the NZD is our strongest-looking currency.
The good news on Gross Domestic Product in Japan has sent the Nikkei higher and we have to look at the weekly chart to see the all-time highs from last year.
CFDs and FX are leveraged products and your capital may be at risk.
Daily recommendations on major – USD/JPY
USD/JPY – 133.43
Although dollar’s cross-inspired fall from 135.57 last Mon to as low as 131.74 (Thursday) suggests early strong rise from August’s 7-week trough at 130.41 has made a top, subsequent gain to 133.89 Fri and then decline to 132.92 would yield further sideways swings but below 132.62 needed to yield weakness towards 132.04, reckon 131.74 should hold on 1st testing.
On the upside, a daily close above 133.59 (AUS) would revive bullishness for stronger gain towards 133.89, 134.37/42.
Data to be released today
U.K. Rightmove house price, Japan GDP, industrial output, capacity utilization, Germany wholesales price index, France market holiday, Italy market holiday, Swiss producer/import price.
U.S. New York Fed manufacturing, NAHJB housing market index, Canada manufacturing sales and wholesale trades on Monday.