What there seems to be especially in eur/usd and to some degree gbp/usd is a lack of desire to commit. The weaker links (jpy and chf) are easier to punch down on so there in lies the path of least resistance. That said I don’t get the feeling there are that many people that have been short jpy for months or even weeks…..
I think Fed stays data dependent and not influenced by elections either way. History since 1980 supports this.
Since data has tended to come stronger than not, there shouldn’t be any urgency from the Fed to start the cutting cycle.
I would however expect a high degree of coordination between the Fed and the Treasury on managing federal cash flow….
USDJPY WEEKLY CHART – Major RResistance In Sight
There is only one level worth noting in USDJPY, the major resistance at 151.92
A break above this level would leave a blank on charts so use magic levels (152, 155, etc) as potential targets.
So it is a case of boom or bust at 151.92. If I were in the BoJ’s shoes, I would have 2 choices: defend 151.92 or let it run through 152 and then come in covertly to smack it back down but its shoes are too big for me to fill.
Whatever the case, watch 152 as this will dictate whether there is a run at 153.50 and 155.00 or form a range to 150.00.
Bobby
Zero chance that rates will change.
No chance Fed will turn dovish.
Surorise would be if the Dot plot shows 2 cuts (see JP’s post on this)
The other surprise would be if the first-rate cut is pushed out past June although as I posted the other say, I heard that the odds had shrunk to 50/50 for the first-rate cut in June.
FX will probably take its cue from how bond yields move but this should be a non-event meeting unless Dot plot turns more hawkish.
More comments welcomed
Would anyone care to explain here how the FOMC decision and any speculation further on will reflect on USD…
What is going to happen with EURUSD if rates are cut ?
What if not ?
What if rates are raised ??
And why…what is behind the strength/weakness of USD i cases above ?
What is the logic of all of it ?
from my earlier post link to jeff cox’s piece
fwiw
–
…”investors will look at how the 19 FOMC members, both voters and nonvoters, will indicate their expectations for rates through the end of the year and out to 2026 and beyond … it would only take two FOMC members to get more hawkish to reduce the rate cuts this year to two. That, however, is not the general expectation.” …
EURUSD Daily
Resistances : 1.08850 1.09450
Supports : 1.07950 1.07550
Aside of these obvious levels, and the fact that we are in Sell mode right now, there are few facts that has to be taken into account…
That downtrend line up there – it is more of a correction angle , then anything else…
So they still might try for the 1.10+ area
I would like to see it bellow 1.06 , before we declare the doom for EUR…and some real sharp angles as well.
Intraday – watch for 1.08350 support zone , and go with your Sell signals accordingly .
Tonight FOMC – Economic Calendar – stay clear of it !
Here is our blog article describing “trading bid in an offered market.”
What Does it Mean When a Currency Feels “Bid in an Offered Market?”
EURJPY DAILY CHART
EURJPY is currently an outperformer, following the “path of least resistance:, trading above its major resistance at 164.29. This leaves the next target as guesswork (165 is one of those magic levels). Back below 164.29, at a minimum, would be needed to slow the move up.
Much might depend on whether USDJPY can trade similarly by taking out its major resistance at 151.92.
So far, offsets out of this cross are helping to keep EURUSD above its supports (see prior posts).
EURUSD 1 HOUR CHART
It took 17 1-hour candles to go from 1.0853 to 1.0873 and just 2 to break back below it. This tells you the current risk in a market that has had bouts of what we like to say “trading bid in an offered market” with buying driven more by its crosses (e.g. eurjpy) than outright vs the USD.
I don’t like to draw conclusions from a pair trading in a 43 pip range (1.0834-77) other than to say 1.0887 and 1.0906 would need to be broken to change the picture.
4 hour chart to follow .
from two market nurses:
–
The Fed Is Playing a Waiting Game on Rate Cuts. The Rules Are Starting to Change. – By Nick Timiraos in WSJ
While investors focus on whether officials project fewer rate cuts, the Fed looks ahead to recession risks
Jeff Cox
* The Fed has a lot to do at its meeting this week, but ultimately may not end up doing a whole lot in terms of changing the outlook for monetary policy.
* This meeting likely will be all about the Federal Open Market Committee’s “dot plot” of individual member’s interest rate expectations.
* Officials also will release their quarterly update on the economy, specifically for gross domestic product, inflation and the unemployment rate.
Here’s everything to expect from the Federal Reserve’s policy meeting Wednesday
10-yr 4.279; 2-yr 4.677; DLRx 103.50 (flat)
THE qtn now is …
– is jerome a presidential lackie and will he do things to juice the economy (and therefore help revive price-inflation)
— can he even provide hints of whether the FED is edging close to rate cuts
all is in diplomacy, tackt and jerome communication skill determining player perception of what he ll be saying.
Jerome’s own legacy as inflation fighter is on the line, the qtn is does he care.
I think he does. BUt … I may be wrong: I do suffer from imperfect judge of character.
USDJPY Analysis: Breakout and Potential for Further Upside Movement
USDJPY has successfully surpassed the 150.88 resistance level, with the upward movement from 146.47 extending to a peak of 151.33.
As long as the price remains above the ascending trend line on the 4-hour chart, there is still potential for additional upward movement in the upcoming days, with the next target estimated around 160.00.
The initial support level to monitor is at 150.35. If the price breaks below this level, it could suggest a period of consolidation for the uptrend starting from 146.47, with the pair likely finding support at the rising trend line.
A decisive break below the support provided by the trend line could indicate the potential completion of the current uptrend.
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What is Risk Management in Trading – Forex Forum
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