Forex News Roundup for 4rth July, 2023

My FX List
July 4, 2023
  • The ongoing risk-on rally, fueled by robust US economic indicators indicating stable inflation levels, remains intact as the new week begins. Stock markets, particularly in Asia, are experiencing overall gains, with the Hang Seng Index and the Nikkei 225 Index closing more than 1.5% higher for the day.
  • Over an extended period, the Japanese Yen has consistently exhibited weakness compared to other major currencies. Last Friday, the USD/JPY currency pair achieved a new 7-month high, crossing the ¥145 threshold. Traders following trends will maintain their interest in short positions on the Japanese Yen, as it also reached a multi-year low against the Euro on the same day. In defense of the Bank of Japan’s ultra-loose monetary policy, the Governor emphasized that underlying inflation remains below the Bank’s 2% target, despite the headline rate currently exceeding 3%.
  • Throughout the Asian session in the Forex market, the New Zealand Dollar has demonstrated its strength as the leading major currency, while the Japanese Yen has displayed weakness. Building on its Friday rally, the US Dollar is maintaining its upward trajectory today. Technically speaking, the Dollar Index is showing indications of potentially establishing a new long-term bullish trend, although its chart pattern still strongly suggests a period of consolidation.
  • The ascent of cocoa futures persists as they attain fresh multi-year highs, enticing trend traders who opt for long positions. The driving force behind this surge stems from robust demand and adverse harvest conditions in specific areas of Africa.
  • Bitcoin appears poised to once again test a significant psychological milestone at $31k, which holds great importance. Should the price successfully consolidate above this level, it has the potential to experience rapid upward momentum.
  • Two important data releases are scheduled: Swiss CPI data, which is anticipated to indicate a month-on-month decline from 0.3% to 0.2%, and US ISM Manufacturing PMI data.
    • The Reserve Bank of Australia is scheduled to hold a policy meeting, but market expectations suggest that interest rates will remain unchanged at 4.10%.
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