Dollar-Yen pair recovered from the low of 103.72 to print a session high of 104.32 on Monday before ending the day around 104.18 levels. The offered tone around JPY remains strong in Asia, given the pair has breached high of 104.32 levels. The question is whether the pair would be able to close above 104.32 levels today.
The data calendar is light with just US consumer confidence due for release. The index is seen retreating slightly to 101.00 in October from September’s figure of 104.1. Meanwhile, house price index and Richmond Fed Manufacturing index could be ignored unless the actual print misses estimated by a wide margin.
Federal Reserve Bank of St. Louis President James Bullard said Monday very low rates are likely to persist well into the future. Bullard belives the central bank only needs to raise rates one more time following which it can stand pat for a prolonged period of time. Bullard’s comments have not had any noteable impact on Fed Decembe rate hike probability, which remains well above 70%.
Technicals – Stuck between monthly and weekly pivot
Daily chart
- Pair’s rebound from 103.72 (monthly classic pivot R1) has ran into resistance at 104.42, which is weekly classic pivot resistance.
- The weekly MACD shows a bullish crossover suggesting the pair may have bottomed out around 100.00 and the momentum remains in favor of the bulls. However, the daily MACD shows the bullish momentum has run out of steam.
- Hence, fresh dollar demand is anticipated only after the confirmation of a bullish break i.e. a daily close above 104.32 (September highs). Note that we have had multiple intraday highs above 104.32 earlier this momth, but the daily close has been below 104.32.
- A daily close/4-hour close above 104.32 would open doors for 105.00-106.00 levels.
- On the lower side, failure to hold above 104.32 followed by a break below 103.72 would signal end of the corrective rally from 100.00 levels.
AUD/USD Forecast – Candles with long tails suggest scope for correction
Daily chart
- Despite Thursday’s bearish outside day candle, the subsequent weak follow through and repeated failure to hold below 0.76 handle suggests the pair coul revisit area around 0.7650 levels.
- On a slightly larger scheme of things, bearish invalidation is seen only above Thursday’s high of 0.7734 levels.
- On the lower side, only a 4-hr close below 0.7587 would signal otninuation of retreat from Thursday’s high of 0.7734. The rising trend line support seen around 0.7515 levels could be put to test in this case.
NZD/USD Forecast – Descending trend line offering support
Daily chart
- Despite the pair’s retreat from the high of 0.8266 levels (Oct 20 high), the rebound from the descending trend line (drawn from Sep 8 high and Seo 22 high) seen on Monday and in the Asian session today suggests the bearish momentum may have run out of steam and thus the spot could see a minor corrective move to 0.7138 (monthly classic pivot S1).
- On the lower side, breach of 0.71 handle on the 4-hr chart would open doors for a sell-off to 0.7035 (Oct 13 low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.