Dollar remains firmly supported by recent hawkish comments from US officials. Indeed, interest rates futures are now showing over 30% chance that Fed will hike by 25bps in Aug and a 96% chance that the rate hike will happen by December. Though, against Euro, the greenback remains in medium term range near to record low for the fact that ECB could indeed hike earlier then the Fed. Among the majors, the Japanese yen is hardest hit this week. Risk appetite/aversion is not really a factor at this moment since the focus seems how turns to the prospect that yield gap between yen and other major currencies are going to widen once again considering Fed and ECB could hike later this year.
A bunch of Japanese economic data was released earlier today. Q1 GDP growth was revised higher to 1.0% qoq, 4.0% annualized. Domestic CGPI climbed more than expected by 1.1% mom, 4.7% yoy in May. Apr trade surplus shrank less than expected to 634.7b. Current account surplus, though, shrank more than expected to 1380.9b.
Main focus in the European session will be UK employment data which is expected to show claimant count rose slightly to 8k in May. Unemployment rate is expected to be unchanged at 5.2%. Average earnings is expected to climb by 4.1% yoy in Apr, up from 4.0%. Trade deficit is expected to narrow a little to -7.35b. Note that while sterling tumbles against dollar, it remains relatively firm in crosses and further buying in crosses could provide the support to give cable a bounce.
In US session, traders will pay attention speeches by Fed's Kohn and Kroszner as well as the Beige book. Canadian capacity utilization and new housing price index will also be released.
USD/JPY Daily Outlook
Daily Pivots: (S1) 106.63; (P) 107.03; (R1) 107.84; More.
USD/JPY's medium term rebound from 95.77 is still in progress and extends further to as high as 107.76 today. Further rally is still expected towards key medium term resistance at 108.59 but upside could be limited there initially due to overbought condition as seen in 4 hours RSI. Touching of 107.15 will turn intraday outlook neutral and bring consolidation But downside should be contained by 105.94 minor support and bring another rise.
In the bigger picture, USD/JPY has made a medium term bottom after down trend from 124.13 has just met 76.4% retracement of 79.75 to 147.68 at 95.78. Rebound from 95.77 is still in progress. Sustained trading above the mentioned medium trend line resistance argues that whole decline down trend from 124.13 has already completed. Focus is now on 108.59 resistance. Break of 108.59 will confirm that this case and stronger medium term rebound should then be seen to retest 114.77 resistance first. However, failure below there, followed by break of 102.73 support will indicate that rise from 95.77 has completed and will turn short term outlook bearish again
Forex News Digest
The Day Ahead: U.S. & Canada: Canadian Q1 Capacity Utilization; Fed's Beige Book
The Day Ahead: EU & UK: UK Unemployment Report, French CPI, ECB-Speak
U.S. Preview: Fed's Beige Book to Confirm Broad-Based Softness in Economy
Closing Market Recap: Inflation Worries Crush Fixed Income After BOC Decision
Tuesday's News Recap: BOC Unexpectedly Holds Rates; U.S. Trade Deficit Widens
Dollar Is Near Three-Month High Versus Yen; Fed Speakers to Cite Inflation
Canada Dollar Slump May Slow After Central Bank Turns Focus to Inflation
U.K. `Scarcely Growing' With Expansion at Three-Year Low, Institute Says
New Zealand Dollar Declines to 20-Week Low on Interest-Rate Cut Prospects
More Forex News
Economic Indicators Update
GMT
Ccy
Events
Actual
Consensus
Previous
Revised
23:50
JPY
Japan GDP Q/Q Q1
1.00%
0.90%
0.80%
23:50
JPY
Japan GDP annualised Q1
4.00%
3.80%
3.30%
23:50
JPY
Japan GDP deflator Y/Y Q1
-1.50%
-1.40%
-1.40%
23:50
JPY
Japan Domestic CGPI M/M May
1.10%
0.70%
0.60%
0.70%
23:50
JPY
Japan Domestic CGPI Y/Y May
4.70%
4.00%
3.70%
3.90%
23:50
JPY
Japan Trade balance (jpy) Apr
634.7B
600.0B
1250.7B
23:50
JPY
Japan Current account Apr
1380.9B
1625.0B
2882.5B
0:30
AUD
Australia W'pac consumer confi. May
-5.60%
N/A
2.70%
8:30
GBP
U.K. Avg. earnings 3m Y/Y Apr
4.10%
4.00%
8:30
GBP
U.K. Claimant count May
8.0K
7.2K
8:30
GBP
U.K. ILO unemployment rate Apr
5.20%
5.20%
8:30
GBP
U.K. Trade balance (gbp) Apr
-7.35 B
-7.437B
12:30
CAD
Canada Capacity utilisation Q1
80.80%
81.80%
12:30
CAD
Canada New housing price index Apr
0.40%
0.20%
18:00
USD
Fed's Beige Book
A bunch of Japanese economic data was released earlier today. Q1 GDP growth was revised higher to 1.0% qoq, 4.0% annualized. Domestic CGPI climbed more than expected by 1.1% mom, 4.7% yoy in May. Apr trade surplus shrank less than expected to 634.7b. Current account surplus, though, shrank more than expected to 1380.9b.
Main focus in the European session will be UK employment data which is expected to show claimant count rose slightly to 8k in May. Unemployment rate is expected to be unchanged at 5.2%. Average earnings is expected to climb by 4.1% yoy in Apr, up from 4.0%. Trade deficit is expected to narrow a little to -7.35b. Note that while sterling tumbles against dollar, it remains relatively firm in crosses and further buying in crosses could provide the support to give cable a bounce.
In US session, traders will pay attention speeches by Fed's Kohn and Kroszner as well as the Beige book. Canadian capacity utilization and new housing price index will also be released.
USD/JPY Daily Outlook
Daily Pivots: (S1) 106.63; (P) 107.03; (R1) 107.84; More.
USD/JPY's medium term rebound from 95.77 is still in progress and extends further to as high as 107.76 today. Further rally is still expected towards key medium term resistance at 108.59 but upside could be limited there initially due to overbought condition as seen in 4 hours RSI. Touching of 107.15 will turn intraday outlook neutral and bring consolidation But downside should be contained by 105.94 minor support and bring another rise.
In the bigger picture, USD/JPY has made a medium term bottom after down trend from 124.13 has just met 76.4% retracement of 79.75 to 147.68 at 95.78. Rebound from 95.77 is still in progress. Sustained trading above the mentioned medium trend line resistance argues that whole decline down trend from 124.13 has already completed. Focus is now on 108.59 resistance. Break of 108.59 will confirm that this case and stronger medium term rebound should then be seen to retest 114.77 resistance first. However, failure below there, followed by break of 102.73 support will indicate that rise from 95.77 has completed and will turn short term outlook bearish again
Forex News Digest
The Day Ahead: U.S. & Canada: Canadian Q1 Capacity Utilization; Fed's Beige Book
The Day Ahead: EU & UK: UK Unemployment Report, French CPI, ECB-Speak
U.S. Preview: Fed's Beige Book to Confirm Broad-Based Softness in Economy
Closing Market Recap: Inflation Worries Crush Fixed Income After BOC Decision
Tuesday's News Recap: BOC Unexpectedly Holds Rates; U.S. Trade Deficit Widens
Dollar Is Near Three-Month High Versus Yen; Fed Speakers to Cite Inflation
Canada Dollar Slump May Slow After Central Bank Turns Focus to Inflation
U.K. `Scarcely Growing' With Expansion at Three-Year Low, Institute Says
New Zealand Dollar Declines to 20-Week Low on Interest-Rate Cut Prospects
More Forex News
Economic Indicators Update
GMT
Ccy
Events
Actual
Consensus
Previous
Revised
23:50
JPY
Japan GDP Q/Q Q1
1.00%
0.90%
0.80%
23:50
JPY
Japan GDP annualised Q1
4.00%
3.80%
3.30%
23:50
JPY
Japan GDP deflator Y/Y Q1
-1.50%
-1.40%
-1.40%
23:50
JPY
Japan Domestic CGPI M/M May
1.10%
0.70%
0.60%
0.70%
23:50
JPY
Japan Domestic CGPI Y/Y May
4.70%
4.00%
3.70%
3.90%
23:50
JPY
Japan Trade balance (jpy) Apr
634.7B
600.0B
1250.7B
23:50
JPY
Japan Current account Apr
1380.9B
1625.0B
2882.5B
0:30
AUD
Australia W'pac consumer confi. May
-5.60%
N/A
2.70%
8:30
GBP
U.K. Avg. earnings 3m Y/Y Apr
4.10%
4.00%
8:30
GBP
U.K. Claimant count May
8.0K
7.2K
8:30
GBP
U.K. ILO unemployment rate Apr
5.20%
5.20%
8:30
GBP
U.K. Trade balance (gbp) Apr
-7.35 B
-7.437B
12:30
CAD
Canada Capacity utilisation Q1
80.80%
81.80%
12:30
CAD
Canada New housing price index Apr
0.40%
0.20%
18:00
USD
Fed's Beige Book
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