If we let the natural big players and the tide carry us forward, we won't make any progress.
USD
EUR/USD
The Euro plunged from $1.1975 to $1.1926 amid German Chancellor Merkel pushed to ban British travellers due to the Delta plus variant’s fears.
GBP/USD
Sterling tumbled to $1.3893, following Matt Hancock’s resignation from the Health Minister’s post due to harsh criticism for not following the Covid guidelines, ex-Finance Ministry member Sajid Javid returns to the Tory team.
USD/JPY
Yen held firm at 110.65 per dollar as softer-than-expected inflation data last week has done little to soothe concerns about the Federal Reserve dialling down its monetary stimulus.
USD/CAD
Loonie sidelined at 1.2304 against the dollar, unaffected by a modest increase in crude oil prices.
AUD/USD
Aussie edged lower to $0.7587 after Australia tightened restrictions to stem the spread of the more potent Delta strain.
USD/ZAR
South African rand soared to 14.01 against the greenback in hopes that a dovish Fed would keep the flow of dollars into riskier markets.
USD/MUR
The Mauritian rupee inched lower by 5 cents to 41.50(Selling) per dollar on the domestic market.
“ Its not that I am so smart. Its just that I observe the market longer. Patience is key to success.” - Anonymous
Policy statement from the US Federal Reserve certainly helped fuel a spike upwards in the USDJPY which topped exactly in the 110.80-111.00 resistance zone ( Based on our previous forecast on 28.05.21) before trimming most of its post Fed gains. What next?
The Bank of Japan kept its policy unchanged today and held its negative interest rate firm while also holding steady to its quantitative easing program in contrast with the FED. The special COVID program is also extended till March 2022. The lag in economic recovery has put institutions under stress , with BOJ responding that they will announce new loan measures in the near term.
The sudden burst of volatility and uncertainty will continue to prevail in the market in the coming sessions. The forex pair , hovering near critical values of 110.80-111.00, remains a key pivot in the near term. 110.80 marks a complete A-B-C corrections as per Elliott wave principle which coincides also with 100% Fibo Extension. A strong break and close above these levels could signal medium term buying in the USD amid breach of stop losses.
Shorts in USDJPY can be initiated in the region of 110.50-110.80 with a stop above 111 with targets towards 109 and 108 levels.
