Jay in my experience EurJpy is a better barometer as it runs very closely with Dow.. The pair is down so sticking with UsdJpy which I would wager is continued pricing in and adjustments to rates dropping .25 ahead of the curve and so if it is 25 we see a rally if it is 50 all heck breaks loose. No reason for 50. I still feel they don’t want to sabotage Harris chances and wait for December hoping for stability and strength but if Trump is in they fire the guns ahead of him taking office and cause trouble on purpose either way.
I am beginning to believe the timing for FED cuts is more about global leverage and risk exposure in a wide swath of different markets that is affecting the FED’s decision than it is the job market or simply CPI. Those are vital components but not the entire framework. So understanding significant FED changes usually involves reaction to significant disruption as well, perhaps always does, figuring it out completely is above my pay grade and so gathering a sense of the overall mood could be all you need to anticipate what the FED will do.
A look at the day ahead in U.S. and global markets from Mike Dolan
Wall Street futures have found their feet after Friday’s exaggerated market reaction to an otherwise middling employment report – with Apple’s new iPhone and Tuesday’s presidential candidates’ debate next up on the radar.
GBPUSD testing 1.3087 again … Here are retracement levels for 1.2664-1.3266 using our Fibonacci Calculator
US500 4 HOUR CHART – Stocks set the risk tone
Here are retracement levels using our Fibonacci Calculator
GBPUSD DAILY CHART – Support tested
Today’s low 1.3087
As posted in out Weekly FX Chart Outlook
The failure to hold above it and retest the high suggests a lack of power but only a break of 1.3087 would suggest more to the downside. Above 1.3087 it is still in a consolidation mode.
USDJPY 4 HOUR CHART – Hidden hand?
As noted in our Weekly FX Chart Outlook, USDJPY remains the most sensitive currency to the risk on or risk off mood, especially the latter
USDJPY came close (today’s low at 141.76_) vs the low for the move (141.68) and then rebounded as it followed higher US stocks to start the week.
For me this suggests a hidden hand (BoJ?) protecting the low but in any case there is a higher low.
BUT to end this current episode down and shift the focus to 145, 144.22 would need t be taken out.
Look for 143.59 to be a pivotal level today.
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