Markets On Stand By For Yellen's Speech

OctaFx Analyst Team OctaFX

The focus of the market today will be the FOMC statement on monetary policy that will be published at 18:00 GMT. Investors do not expect a rate hike today, but the US central bank may decide to start reducing its balance sheet from the current 4.5 trillion dollars. Details about the timing and the scale of balance sheet cuts may influence investor sentiment. Traders will also be monitoring the FOMC economic projections that will also be released at 18:00 GMT. A spike in volatility is predicted after the Fed’s chairwoman Janet Yellen’s speech during which she may outline the Fed’s opinion about the recent acceleration of inflation and the labor market data missing forecasts. In case of hawkish rhetoric, we may see a massive selloff of the EUR/USD. Some pressure on the greenback came from the existing home sales report, according to which the indicator has fallen to 5.35 million in August against the 5.46 million forecasted.

The USD/JPY retreated downwards amid profit taking ahead of the FOMC statement and from the Japanese trade surplus report that showed 0.37 trillion yen in August versus the 0.41 trillion yen expected. The demand for the yen as a defensive asset may rise in case of geopolitical tensions grow or if the stock markets take a dip. Traders are also waiting for the Monetary policy statement from the Bank of Japan at 03:00 GMT tomorrow.

Another important event investors should be on the lookout for this evening is the GDP report in New Zealand that will be published at 22:45 and may partially offset the influence of the FOMC statement on the NZD/USD.

EUR/USD

The EUR/USD quotes are consolidating near the 1.2000 level and keep moving within the local rising channel. After the end of the current sideways movement there is a high possibility of sharp moves. Breaking through the lower limit of the channel may result in drops to 1.1925 and 1.1825. On the other hand, the price may resume upward dynamics with the first goal at 1.2070.

USD/JPY

The USD/JPY was not able to gain a foothold above the 111.70 mark and rolled back. We do not exclude the growth resuming with potential upsides to 113.00 and 114.70. Breaking through the closest support at 111.00 will likely force the bears to pull the pair down with possible objectives at 110.30 and 109.60. Volatility is likely to rise soon.

NZD/USD

The NZD/USD is testing the local resistance at 0.7375 and its overcoming will help the bulls to push the quotes up to 0.7400 and the upper boundary of the local ascending channel. The RSI on the 15-minute chart approached the overbought zone, indicating a possible downward correction in the near future. The immediate goals in case of a fall may be located in the 0.7250-0.7300 range.

Author

OctaFx Analyst Team

OctaFX

OctaFX is a market-leading forex broker, providing personalised forex brokerage services to customers in over 100 countries worldwide.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.