US stock advanced on Thursday and recovered some ground after registering minimal losses on Wednesday, as the falling US 10-year Treasury yield made stocks relatively attractive. During the testimony before the House Financial Services Committee on Monetary Policy and the State of the Economy, FOMC Chairman Jerome Powell said that a big part of inflation wouldn’t be affected by the Fed’s tools. Moreover, Fed Governor Michelle Bowman also said that she supports another 75 basis points interest rates hike in July. On the economic data side, the US manufacturing index dropped to 52.4 in June, which is an almost two-year low. Meanwhile, the S&P Global Services PMI fell to 51.6 from 53.4 in May, missing the market’s expectations and showing that contractions in output and new orders weighed heavily on the headline figure.
The benchmarks, S&P 500, Nasdaq 100 and the Dow Jones Industrial Average both rose on Thursday as the slide witnessed in US 10-year Treasury yield provided some support to the US equities market despite the disappointing PMI data. S&P 500 was up 1.0% daily, and the Dow Jones Industrial Average also advanced with a 0.6% gain for the day. Seven out of eleven sectors stayed in positive territory as the utilities and health care sectors are the best performing among all groups, rising 2.35% and 2.22%, respectively. The Nasdaq 100 climbed the most with a 1.5% gain on Thursday and the MSCI World index declined 0.5%. The market focus now remains on overheating inflation and potential recessions among major economies.
Main Pairs Movement
The US dollar advanced on Thursday, rebounding from a weekly low that touched on Wednesday and extending its rally toward the 104.7 area amid risk-off market sentiment. The DXY index started to see fresh buying and reached a daily high above 104.7 level in the early European session, but then lost its bullish traction to surrender some of its daily gains. The safe-haven greenback continued to find demand amid escalating fears about a global recession, as the US PMI data came in weaker than expected and fueled recession-related concerns.
GBP/USD edged lower with a 0.08% loss on Thursday amid bullish momentum witnessed in the US dollar across the board. The better-than-expected UK PMI prints for June have helped the cable to find some demand and recovered most of its intra-day losses. The cable touched a daily low below 1.218 level in the early European session, now trading at 1.226 at the time of writing. Meanwhile, EUR/USD slumped to a daily low below the 1.049 mark but then rebounded modestly to offset some of its intraday losses. The pair was down almost 0.44% for the day.
Gold declined and touched a daily low near $1823 during the American session, as the broad US dollar strength continued to exert bearish pressure on the precious metal. Meanwhile, WTI oil dropped to a near six-week low amid the recession fears.
Technical Analysis
EURUSD (4-Hour Chart)
After three days of gains, EURUSD entered a sharp correction on Thursday as risk-off sentiment returned across global markets. Fed Chair Jerome Powell’s testament on Wednesday added concerns of a recession in the U.S.. Chairman Powell points out the possibility of an interest rate-induced recession as the central bank aims to aggressively pull back inflation. On the other hand, recession in the European zone could be well underway as PMI from Germany drops to a multi-year low of 52, indicating stalling demand and drastic slow down of the economy. The EU leaders’ summit will reconvene on Friday.
On the technical side, EURUSD continues to face strong resistance at our previously estimated level of around 1.05483. The new level of support could form around the 1.049 price region, but there are no technical indications of it yet. RSI for the pair sits at 44.42, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.05483, 1.06315
Support: 1.0382
GBPUSD (4-Hour Chart)
GBPUSD continued to trade lower after a slight pull back from the previous trading day. British PMI contracted to 53.4, below estimates of 52.7. Risk-off sentiment has further helped the U.S. Dollar rise against the British Pound. On the economic docket, the British retail sales and the American existing home sales data are slated to release during the European trading session and American trading session, respectively.
On the technical side, GBPUSD remains depressed under our previously estimated resistance level of 1.239. Near-term support for Cable remains at 1.2173. RSI for the pair sits at 48.18, as of writing. On the four-hour chart, GBPUSD currently trades above its 50-day SMA, but below its 100 and 200-day SMA.
Resistance: 1.25944, 1.239
Support: 1.2173, 1.20824
USDJPY (4-Hour Chart)
USDJPY continues to drop for the second straight day. The risk-off sentiment has driven flows from the U.S. Dollar to a more supportive monetary environment for the Japanese Yen. With the U.S. benchmark 10-year Treasury yield falling back towards 3%, market participants the Dollar is losing steam amidst recent rallies. Some analysts are predicting that a further depreciation of the Japanese Yen could push the BoJ to intervene in monetary supply, however, no indication of such actions has been found yet.
On the technical side, USDJPY faced strong selling pressure at around the 136.6 price region. Near-term support for USDJPY sits at 133.84 and 131.81. RSI for the pair has resumed to normal territory and is sitting at 60.99, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.
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US shares edged slightly lower on Wednesday in choppy trading as markets struggled to sustain a rebound from earlier Wednesday following the hearing from the Fed Chairman Jerome Powell. The Dow Jones Industrial Averages fell 0.15% while the S&P 500 dropped 0.13%; in the meantime, the Nasdaq Composite edged 0.15% lower to 11,053.08 at the end of the day.
On the hearing from the Fed Chairman, Jerome Powell, he emphasized on the Fed is fully committed to bringing prices, so-called inflations, under control, even if doing so risks an economic downturn. Meanwhile, the Fed is not attempting to engineer a recession or provoke a recession although Powell understands and acknowledges that the incident of a recession might be possible as several central banks are having a hard time reducing inflations. Moreover, during the hearing, Jerome Powell reiterated that continuously increasing the interest rates would be appropriate, and he declined to rule out the possibility of a 100 basis point move if needed. According to the Fed’s latest economic projection, it expects the inflation by 2022 to drop only 5.2%, lower than the projection in April, 6.3%.
Main Pairs Movement
WTI oil price tumbled 4.95% as the market feared a looming recession would drag down global oil demand. At the same time, US president Joe Biden’s administration was locked in a dispute with the US oil industry.
EUR/USD was up 0.32%, finishing with 1.05641 at the end of the day. EUR/USD advanced for a third consecutive day. The demand for the US dollar seemed to become softer on Wednesday even the Fed Chairman Jerome Powell mentioned that he would never take any size of interest rate hike off the table during his testified hearing.
AUD/USD dropped 0.63%, to 0.69246 on Wednesday. The Aussie lost demand despite the PMI data in Australia beating estimates. The PMI landed at 52.6, significantly higher than the expectation of 49.1. However, it failed to boost the Australian dollar.
GBP/USD declined 0.12% to 1.22606 on Wednesday. The inaction move of GBP/USD could be a mixed play as investors were cautious ahead of the preliminary PMI data for June from both the US and the UK.
Technical Analysis
EURUSD (4-Hour Chart)
EURUSD traded higher amid broad-based Dollar weakness. The Euro extended its third gaining day and traded 0.3% higher against the U.S. Greenback. Fed chair Jerome Powell’s testament on Wednesday added selling pressure on the U.S. Dollar. Chairman Powell iterated that he would not leave a larger magnitude of interest rate hikes off the table as the central bank continues its effort to tame inflation. The EU leaders will be gathering on the 23rd to examine the current economic and geopolitical situations of the Eurozone.
On the technical side, EURUSD has edged above our previously estimated resistance level and 1.05483, but still faces strong selling pressure near this price level. RSI for the pair sits at 48.6, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.05483, 1.06315
Support: 1.04036, 1.03783
GBPUSD (4-Hour Chart)
GBPUSD traded lower slightly despite a weaker U.S. Dollar. Market participants are alarmed by the British CPI data, which rose by 9.1%, year over year, marking its largest jump in 40 years. The BoE’s efforts to tame inflation seem to have minimal effect on the actual inflation rate. On the 23rd, Britain will release its key PMI figures, which will further price information for companies. Wednesday’s drop in Cable could not be offset by a broader-based weakness of the U.S. Greenback.
On the technical side, GBPUSD remains depressed below our previously estimated resistance level of 1.239, while support levels at 1.2173 remain firm. RSI for Cable sits at 52.18, as of writing. On the four-hour chart, GBPUSD currently trades above its 50-day SMA, but below its 100, and 200-day SMA.
Resistance: 1.25944, 1.239
Support: 1.2173, 1.20824
USDJPY (4-Hour Chart)
USDJPY has plateaued near the 136 price level as the U.S. Dollar loses demand over the past couple of days. A pull back on the U.S. 10-year Treasury yield has helped the Japanese Yen gain steam against the U.S. Dollar. Since the beginning of April, the Japanese Yen has fallen more than 12% against the U.S. Greenback, further depreciation of the Japanese Yen could pose fundamental threats to the currency; however, with chairman Jerome Powell’s testament last night, the interest rate difference between the U.S. and Japan only seems to be growing.
On the technical side, USDJPY has met fresh resistance at around the 136.28 price region. USDJPY still seems to be on a steady upward trend despite stalling around 136 for the past couple of days. RSI for the pair has dropped out of the overbought territory and currently sits at 59.5. On the four-hour chart, USDJPY is trading above its 50, 100, and 200-day SMA.
Please be advised of the upcoming SHOPIFY INC – CLASS A (SHOP) stock split that is going to take place as per the following schedule:
Ex-Date: June 29th, 2022. Common shares will trade at the new split-adjusted price.
Important implications of the Shopify Stock Split:
1. The quantity of shares of each client’s position will multiply by 10.
2. Post-split, the “open price” and “take profit / stop loss” of each position will be adjusted, which will be the original price divided by 10.
3. The estimated post-split price may be 1/10 of the EOD price on 28th, June.
4. All pending orders at the time of the split (Buy Limit, Sell Limit, Buy Stop, Sell Stop, Buy Stop Limit, Sell Stop Limit) will be cancelled.
5. All SHOP holding positions and pending orders on DEMO account will be closed as a result of the stock split.
Q. What is a stock split? A. A stock split is a corporate action taken by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector, to divide their existing shares into two or more shares.
Q. Why do stocks split? A. The primary motive is to make the shares more affordable to small investors even though the underlying value of the company has not changed. Shopify would like its stock to be more accessible to a broader base of investors.
Q. What is the split ratio? A. Shopify also announced it will split its stock in a 10 for 1 offering.
Q. What will this split mean to investors? A. Each share of SHOP stock that an investor owns before Ex-Date (June 29th, 2022) will be eligible for stock split. Investors will receive nine additional shares and the stock price will be 1/10.
Here is an example: If an investor owns 100 shares and the market price is $300, $350 as take profit. After 10 for 1 stock split, the investor will own 100*10= 1,000 shares and the estimated post-split price would be $300/10 = $30, and the take profit price will adjust to $350/10=$35.
Q. Does the 10 for 1 stock split mean the value of my SHOP shares will increase nine times? A. Unfortunately, not. As stated in the above example, the increase in the number of stocks means every share is now worth less than its previous value, precisely, it’ll be 1/10th the previous value.
Q. How do stock splits affect short sellers? A. Stock splits do not affect short sellers in a material way. There are some changes that occur as a result of a split that affects the short position, but they don’t affect the value of the short position(s).
If you have any questions, our team will be happy to answer your questions. Please mail to [email protected] or contact the service online.
US shares jumped on Tuesday following a brutal week as investors assessed a more aggressive Federal Reserve and digested rising chances of a possible recession. The technology-heavy weighted Index, the Nasdaq Composite led the rally, popping 2.51% on Tuesday. The S&P 500 climbed 2.45%, and the Dow Jones Industrial Averages edged 2.15% higher, coming back from the worst weekly loss in two years. The bounce of the US shares seems to be a reaction that many investors fear that the equities might be oversold after more accurately pricing under inflationary pressures. More market sentiments eye on the testimony from the Fed Chairman Jerome Powell on Wednesday.
Reserve Bank of Australia Governor Philip Lowe mentioned on Tuesday that the RBA is likely to rise the interest rates by 50 basis points in July, prompting markets by denying the possibility of rising 75 basis points. However, some economists think that the RBA remains behind the curve compared to the Fed and other central banks, and such a move might bring the Australian economy into recession. In response to the doubt, Lowe passed on these forecasts, instead highlighting Australian household consumption and its unemployment rates, being near a 50- year low.
Main Pairs Movement
AUD/USD edged higher for a two-consecutive day, up 0.27% at the end of the day. The US dollar failed to extend as the market sentiment improved after the RBA minutes with the governor Philips Lowe added strength to the Aussie.
The precious metal, gold, continued to test the water and was down 0.29% on Tuesday. Gold is heading to test the $1,830 level ahead of the testimony from Jerome Powell. After the market reaction from last week, the second-tier US economic data and the Fed’s expectation this week could provide more price actions in gold.
Crude oil prices edged higher on Tuesday amid high summer fuel demand while the supplies remained tight. West Texas Intermediate price was up 0.39% to 109.192. Most economists expect oil demand to increase and improve further, benefitting from the reopening of China and the incoming summer vacation. Thus, oil prices are expected to climb north else.
USD/JPY continued to move further north as the Bank of Japan extended its ultra-loose monetary policy. The BOJ executed a record of $81 billion bond purchasing last week to calm the market and drag benchmark yields back below its closely watched ceiling. USD/JPY was up 1.15 % and closed at 116.596 at the end of the day.
Technical Analysis
EURUSD (4-Hour Chart)
EURUSD traded mostly sideways on the 21st. U.S. equities popped after the Juneteenth holiday; on the other hand, the U.S. Greenback presented some weakness as the Dollar index closed 0.06% lower. Market participants will now turn their focus on Fed chair Jerome Powell’s testimony that is scheduled during the American trading session. On the horizon, ECB’s council member Ollie Rehn hinted at a possible further interest rate hike for July.
On the technical side, EURUSD has been on a slow upward trend but resistance sits near at around the 1.05483 price level. RSI for the pair sits at 46.07, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.05483, 1.07691
Support: 1.04036, 1.03783
GBPUSD (4-Hour Chart)
GBPUSD traded higher for the second straight day as the U.S. Greenback loses steam. Risk sentiment shift as global equities rallied has buoyed the British Pound as market participants rotate out of safe-haven assets, such as the U.S. Dollar. U.S. housing market showed weaker signs as existing home sales declined 3.4%, the lowest level since June of 2020. Existing home sales have fallen for the 4th consecutive month.
On the technical side, GBPUSD remains supported by our previously estimated support level at the 1.2173 price region. Near-term resistance at 1.239 remains unchallenged. RSI for the pair sits at 44.47, as of writing. On the four-hour chart, GBPUSD is currently trading below its 50, 100, and 200-day SMA.
Resistance: 1.25944, 1.239
Support: 1.2173, 1.20824
USDJPY (4-Hour Chart)
USDJPY charged higher into historical territory on the 21st. Despite the weakness shown by the Dollar Index, the Japanese Yen has continued to fall against the U.S. Dollar. The widening interest rate differential between the U.S. and Japan continues to present carry trade opportunities in the near term. The BoJ has reiterated its dovish stance and will continue to purchase government bonds at a fixed rate for the foreseeable future.
On the technical side, USDJPY remains firmly supported by the support level at 132.1 and does not see any firm resistance in the near term. RSI for the pair sits at 70.14, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.
After cryptocurrencies faced a major sell-off, Solend, a lending platform built on the Solana blockchain, attempted to gain control of its most extensive account to stop it from collapsing the system. The largest account, the so-called “whale” account, might influence the market movements significantly if the largest account holder decided to sell- off its assets. Over the weekend, Solend has passed the proposal permission to take over the “whale” account, which is an unprecedented move in the DeFi world. According to Solend, the decision that it made allowed it to liquidate assets through OTC, to avoid a possible collapse in the market.
As the war between Russia and Ukraine continues, gas supplies remain in shortage. Economy Minister Robert Habeck warned that the situation will be intense and tight in winter if there are no precautionary measures. As a result, Germany mentions that it will seek to compensate for a cut in Russian gas supplies by burning more coal, the most carbon-intensive fossil fuel in terms of emission.
Main Pairs Movement
AUD/USD was up 0.2% and closed at 0.69499 on Monday. The Aussie was favourable in an upbeat market due to China’s Covid news and the US weighing lifting restrictions on China. Further price movements eye on the RBA meeting on Tuesday.
EUR/USD was up 0.16% at the end of the day. The market was relatively quiet due to a bank holiday. In the meantime, the ECB has foreseen hiking rates in July and September, slightly boosting the euro dollar.
Bitcoin and Ethereum both rebounded on Monday, edging up more than 8% and 13%, respectively after falling below their 2017 high over the weekend. However, Bitcoin still sits 70% below its all-time high. The cryptocurrency markets remain under pressure and have been plagued by several issues, starting with the collapse of the stable coin terraUSD.
Gold price oscillated on Monday ahead of Fed Chairman Jerome Powell’s testimony. Gold is confronting the headwinds of an extremely tight monetary policy period with the odds of a consecutive 75 basis points rate hike in the US.
Technical Analysis
EURUSD (4-Hour Chart)
EURUSD traded higher on the first trading day of the week. The German CPI came in above expected at a 1.6% increase, month over month. Last week’s ECB conference presented a more hawkish outlook for the Eurozone’s monetary policy; however, while leaving negative interest rates could ease the soaring inflation, market participants should still be aware of the slowing economy and price pressures from global commodities. ECB’s president Lagarde is due to speak during today’s European trading session.
On the technical side, EURUSD has rebounded from our previously estimated support level of 1.04035 and is on a gradual downtrend despite last week’s positive correction. RSI for the pair sits at 51.69, as of writing. On the four-hour chart, EURUSD is currently trading below its 50, 100, and 200-day SMA.
Resistance: 1.05483, 1.07691
Support: 1.04036, 1.03783
GBPUSD (4-Hour Chart)
GBPUSD advanced on the first trading day of the week after falling more than 1% on Friday’s trading. The British Pound took full advantage of the easing demand for the U.S. Greenback. The 25 basis point interest rate hike by the BoE is poised to ease soaring inflation in the U.K.; however, the slowing British economy poses longer-term threats to the Pound. U.S. existing home sales figures will be released during the American session and should provide a gauge of the real estate market and the overall economic health of the U.S. public.
On the technical side, GBPUSD met fresh resistance at around the 1.239 price region. The 1.2 support level remains firmly intact. RSI for Cable sits at 43.26, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.25944, 1.239
Support: 1.2173, 1.20824
USDJPY (4-Hour Chart)
USDJPY continued its upward movement on the first trading day of the week. Following a 2.04% gain from last Friday, USDJPY has continued to inch towards its previous high. The losing demand for the U.S. Greenback did not affect the overall movement of USDJPY as the Japanese Yen continues to depreciate against the U.S. Dollar. The benchmark U.S. 10-year Treasury yield currently sits at 3.231%. On the economic docket, the U.S. is due to release its initial jobless claims figures on Thursday and Fed chair Jerome Powell will speak later on the same day.
On the technical side, USDJPY has rebounded strongly from our previously estimated support level of 132.5 and is closing in our estimated resistance level of 135.5. RSI for the pair has once again reached overbought territory and sits at 65.98, as of writing. On the four-hour chart, USDJPY is currently trading above its 50, 100, and 200-day SMA.
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The Nasdaq Composite and the S&P 500 bounced slightly on Friday as investors attempted to find some footing following a brutal week. All three US indices ended the week with a negative. The Nasdaq rose 1.43% while the S&P 500 climbed 0.22% to 3,674.84. The Dow Jones Industrial Average declined 0.13%, remaining below 30,000. Given the speech from the Federal Reserve Chairman Jerome Powell on Friday, the Fed rolled out strong language to promise a full effort to restore price stability and inflation. In the meantime, Jerome Powell addressed that the possibility of a recession can be avoided by the Fed is trying to impose its monetary tightening.
It is been another bad week for the cryptocurrency market; over the weekend, the world’s largest cryptocurrency, Bitcoin, was once plunged below $19,000 and Ethereum was once down below $950. The cryptocurrency market continued to face heavy selling pressures following the Federal Reserve was aggressively rising the interest rates in response to the inflation, prompting investors to sell off risky assets like cryptocurrencies. In the meantime, Celsius Network, the lending and trading platform has announced that it would be pausing all crypto transfers and withdrawals, and Coinbase, a crypto trading platform, started laying off approximately 18% of its workforce.
Main Pairs Movement
EUR/USD was down 0.5%, finished with 1.04933 on Friday. The US dollar gained traction following the Fed Chairman reiterated on Friday, promising to continue tackling the inflation and focus on returning inflation to 2%.
USD/JPY was back to a bullish move after a two-consecutive day of correction; USD/JPY was up 2.04% and closed at 134.855 at the end of the day. The Japanese Yen witnessed a volatile day amid the dovish comments from the Bank of Japan.
Gold retreated south amid the speech from the Fed Chairman Jerome Powell and recovering US Treasury bond yields in the second half of the day on Friday. Gold posted a 0.88% loss, closing with $1,840.40 on Friday.
WTI dipped to a fresh weekly low and was down 5.15% following an unexpected rise in the US oil inventories. The EIA showed that crude oil production climbed from 12000K to 11,900K every week. In the meantime, the US might influence oil prices ahead of the OPEC+ meeting on June 30.
Technical Analysis
EURUSD (4-Hour Chart)
EURUSD edged lower on the last trading day of the week. The U.S. Greenback recovered after a large sell-off on Thursday as market participants return to risk-off sentiment. The U.S. 10-year Treasury yield continued to fall as market participants weight economic concerns and soared inflation. The ECB’s decision to rotate into higher-yielding bonds has prevented the shared currency to fall further and retain some of the gains from Thursday.
On the technical side, EURUSD has met fresh resistance at 1.05483 after a three-day winning streak. Fresh support has formed at 1.04036 for EURUSD. RSI for the pair sits at 42.85, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.05483, 1.07691
Support: 1.04036, 1.03783
GBPUSD (4-Hour Chart)
GBPUSD experienced a correction on the last trading day of the week. As market participants process the most recent interest rate hike by the BoE, economic worries and inflation again weigh on the British Pound. The U.S. Greenback has also gained steam as risk-off sentiment continues to evolve around global markets. U.K. treasury bond yields have retreated 1.5%, while the U.S. treasury yield is rising modestly.
On the technical side, GBPUSD has met fresh resistance at 1.23806 and a new support level at 1.2173. RSI for Cable sits at 50.4371, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.25944, 1.23806
Support: 1.2173, 1.20824
USDJPY (4-Hour Chart)
The BoJ announced its interest rate policy during the Asia trading session. The Japanese central bank retains its easy money policy and announces that the bank will conduct 12 trillion yens of purchase of fixed-rate 10-year JGBs at 0.25% for consecutive days, to support the economy. In sharp contrast to the Fed, the BoJ’s monetary policy has continued to disfavour the Japanese Yen in the foreseeable future.
On the technical side, USDJPY found support at our previously estimated support level of 133.5 and fresh resistance at 135.16. RSI for the pair sits at 56.98, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.
US equity markets sank on Thursday and reversed the gains from Wednesday as investors worried the Fed’s aggressive monetary policy might lead the US economy into a recession. The Dow Jones Industrial Average tumbled below the psychological and key 30,000 level for the first time since early 2021. And the S&P 500 shed 3.25% while the Nasdaq Composite plunged more than 4%, to 10,646.10, the lowest level since late 2020.
The market sentiment appeared to sour and intensify once again on Thursday as several central banks started adopting a more tightening monetary policy cycle. The Swiss National Bank raised its interest rates for the first time in more than a decade; it increased its rate from -0.75% to -0.25% and in the meantime raised its inflation prediction for 2022 to 2.8%, 0.7% higher than the prediction made in March. Moreover, the Bank of England also raised rates for the fifth time in a row as the inflationary pressure continued and the UK economy shrank 0.3% in April and a 0.1% contraction in March. Its monetary policy committee decided to raise another 25 basis points to 1.25%, attempting to ease the inflation.
Main Pairs Movement
EUR/USD soared above the 1.0500 level for the first time in a week following the US Fed’s interest rate hikes. EUR/USD was up 1.01%, finishing with 1.05459 at the end of the day.
GBP/USD rallied more than 1.40% on Thursday following the Bank of England aggressively lifted its interest rates for the fifth time in a row, boosting the British Pound.
USD/JPY’s rally took a pause two days in a row as investors await ahead of the Bank of Japan’s monetary policy report on Friday. In the meantime, investors also stay cautious before the speech from Fed Chairman Jerome Powell. On Thursday, USD/JPY pared 1.23% and closed at 132.156.
AUD/USD established above 0.7040 level, was up 0.58%. The Aussie stayed strong for a two-consecutive days as the Reserve Bank of Australia Philip Lowe mentioned that he is confident to bring back the inflation rate back to the 2% to 3% range. In the meantime, the demand for the US dollar stayed quite ahead of the speech from Jerome Powell.
Technical Analysis
EURUSD (4-Hour Chart)
EURUSD extends its gain for the second consecutive day after the Federal Reserve hiked interest rates by 75 basis points. The Dollar continues to lose steam as Fed chair Jerome Powell leaves an additional 75 basis point interest rate hike on the table for July. The weak U.S. job report also weakened the U.S. Greenback and added worries to a slowing U.S. economy. Eurozone CPI is set to release during the European trading session on the 17th.
On the technical side, EURUSD has rebounded strongly from our previously estimated support level of 1.03783. The 50% Fibonacci retracement at 1.0586 presents a near-term resistance level. RSI for the pair sits at 46.75, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.07691
Support: 1.03783
GBPUSD (4-Hour Chart)
GBPUSD extends its gains from the previous trading day. The BoE has hiked its rates for the fifth time of the year in an attempt to tame inflation. Economic guidance provided by the BoE remains gloomy as energy and food prices continue to soar; furthermore, the BoE has forecasted inflation to rise slightly above 11% by October. While the BoE is adamant about raising interest rates, the central bank is still juggling the possibility of stagflation in the near term.
On the technical side, GBPUSD has bounced strongly off our estimated support level of 1.20824. Near-term resistance sits at 1.25047 and 1.27143. RSI for the pair has recovered to 47.24, as of writing. On the four-hour chart, GBPUSD is currently trading below its 50, 100, and 200-day SMA.
Resistance: 1.25944
Support: 1.20824
USDJPY (4-Hour Chart)
USDJPY enters its second day of retreat as the U.S. Greenback loses demand. As the U.S. 10-year Treasury yield retreats below 3.4%, market participants are now turning their focus on the BoJ’s monetary policy announcement scheduled during the Asia trading session on the 17th. In the near term, the Japanese Yen remains weak compared to the U.S. Greenback as the Japanese central bank remains firm with their easy money policy.
On the technical side, USDJPY enters its second day of correction but support levels still hold firm at our previously estimated levels of 133.5 and 132.5. RSI for USDJPY currently indicates 56.2, retreating from overbought territory. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.
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