Free Trial

JPY Stages Solid Bounce, But Outlook Remains Fragile

FOREX
  • USD/JPY is retreating off this week's multi-decade cycle high, putting the rate back below the Y136.50 in what's likely to be only a brief respite. USDJPY broke to new cycle highs this week, with price clearing short-term resistance at 135.59, Jun 15 high. The break higher confirms a resumption of the primary uptrend and maintains the bullish price sequence of higher highs and higher lows.
  • The greenback also trades well, with the USD benefiting from the general rolling over of equity prices after Tuesday's corrective bounce.
  • A downleg in oil prices has undermined sentiment somewhat, with WTI and Brent futures off around 5% apiece as Biden is set to call on Congress to suspend the Federal fuel tax in an effort to help with record high oil prices. Commodity-tied currencies are suitably lower, with AUD and NZD among the poorest performers Wednesday.
  • Oil weakness is dragging on European oil & gas names, while the likes of ExxonMobil and Chevron are trading markedly lower pre-market. This puts US futures on track for a lower open of 1.5-2.0% later today.
  • Canadian CPI data for May is the focus going forward, with the Y/Y rate seen accelerating to 7.3% from 6.8% previously. Eurozone consumer confidence data also crosses as well as speeches from Fed's Powell - delivering his semi-annual testimony, Barkin, Evans and Harker.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.