BOJ to maintain its status-quo next week - BAML

Dhwani Mehta FXStreet

Analysts at Bank of America Merrill Lynch (BAML) offer a sneak peek at what to expect from next week’s Bank of Japan (BOJ) monetary policy decision, which will be accompanied by an updated economic assessment report

Main Quotes:

“The BoJ is likely to keep its rates and QE targets unchanged at its 31 October MPM, in line with consensus expectations.

BoJ cannot easily normalize policy or implement additional easing. First, it needs to keep reducing JGB purchases under YCC.

The BoJ's stubbornly dovish stance leaves JPY as a preferred funding currency. USD/JPY's volatility likely to come from USD.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.