April 22 2022
Japan’s Finance Minister promised to provide decisive action should the JPY depreciate at an extreme pace. It’s difficult to see what intervention by Japan alone in the forex markets could achieve, beyond the short term. Particularly with the Federal Reserve getting more and more hawkish on US interest rates!
This morning the USD is maintaining its strength, and looking to test resistance 128.70/80. A decisive break up would see another run to the recent highs at 129.30/40
Failure to break above 128.80 would see the USD slip back to support at 128.20 and possibly 127.80 to consolidate.
The EURUSD hit the top of the recent range yesterday at 1.0930 on the back of ECB members talking up the chances of a move to tighten monetary policy as soon as July. However, the Fed talk of 50bp hike at back to back meetings for the next 4 months soon dampened the EURUSD strength.
Let’s not forget that this weekend is the French Presidential election. A Macron win should give the EUR a lift. A Le Pen victory will be ugly for the EUR to say the least.
The EUR this morning is sitting just above support at 1.0820/10 a break down here would see increasing downside pressure that could test the recent lows near 1.0760.
If support holds and the EUR can find some upside momentum you will find resistance at 1.0870 and then 1.0910.
The GBP failed to launch yesterday pressured first by a EURGBP rally, and then weighed down by resurgent USD strength. It wasn’t helped by the report that UK consumer confidence had plunged to levels last seen in 2008.
Support this morning is seen first at 1.3010 and at the recent lows around 1.2980.
Resistance will be found 1.3040/50, and if broken the next resistance is at 1.3070/80.
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