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Recession After Fed Rate Cut?Are we heading toward recession? To answer this question, I'm pulling the recession prediction indicator based on GDP provided by FED (ticker:JHGDPBRINKDX) which is the purple color on the bottom chart. It shows that we are on fairly low probability of recession (around 4%) as of end of Aug 2024. The FED indicates it will cut rate on end of Sep 2024. However, if we look back of history of recession based on GDP indicated by FED data (ticker: JHDUSRGDPBR) which is the pink color. It shows that recession only happen right after FED cut rate as show by lime color (ticker:FEDFUNDS). It hard to believe that recession is caused by the FED cutting rate. Or the FED will only cut rate if we are heading toward recession? At least from the past history of rate cut we can see high chance of recession happening after the FED cut rate. And during the recession we can see that S&P500 are falling. So will there be another crash coming after Sep 2024? Please comments below.
SP:SPX
by danny_peanuts
1
Canadian dollar jumps on retail sales reboundThe Canadian dollar is showing some strength on Friday. In the North American session, USD/CAD is trading at 1.3532 at the time of writing, down 0.60% on the day. The Canadian dollar is at its highest level since early April and is poised to post its third winning week in a row. Canada’s retail sales report was a mix. In June, retail sales fell 0.3% m/m, confirming the initial estimate and following a May reading of -0.8%. However, the initial estimate for July jumped 0.6%, which would indicate a much-needed rebound in consumer spending. Retail sales were down 0.5% in the second quarter and 0.4% in Q1, which would mark the weakest two quarters since 2009, outside the covid pandemic. The spike in July is likely due to the Bank of Canada’s quarter-point rate cuts in June and July, bringing down the benchmark rate to 4.5%. The BoC is expected to continue to trim rates as inflation has eased and the labor market shows signs of decline. The annual Jackson Hole meeting has begun and the highlight of the summit will be today’s speech from the host, Fed Chair Jerome Powell. The markets are all ears, although it would not be a surprise if Powell’s speech is little more than a cautious acknowledgment that inflation is moving in the right direction and that the Fed is poised to cut at the Sept. 18 meeting. The markets have fully priced in a rate cut at next month’s meeting, with the odds at 71% for a 25-basis point cut and 29% for a 50-bps cut, according to CME’s FedWatch. There’s a strong chance that the Fed will deliver additional cuts before the end of the year, but recent employment data has been very weak and that could delay further rate cuts. The next employment report on Sept. 6 will be a key factor in determining the Fed’s rate path. USD/CAD has pushed below support at 1.3578 and is testing support at 1.3538. Below, there is support at 1.3478 There is resistance at 1.3628 and 1.3653
by OANDA
EURUSD / US Dollar Slips as Markets Brace for Powell’s SpeechUS Dollar Declines Early Friday as Markets Await Powell’s Speech Next Outlook: The market is currently navigating a crucial zone between 1.10820 and 1.11400. A break above or below this range will likely determine the next directional move. If the price stabilizes above 1.11410, it could signal a potential rally towards 1.12560. Conversely, if the price remains below 1.10820, we may see a decline towards 1.09150. Jerome Powell's upcoming speech is highly anticipated, as any mention of a rate cut could significantly impact market direction. Key Levels: - Pivot Line: 1.1100 - Resistance Levels: 1.11950, 1.12560, 1.1350 - Support Levels: 1.1080, 1.09960, 1.09150 The expected trading range for today is between 1.0900 and 1.12560.
Short
by SroshMayi
Russell may rock n’ roll on rate cut and soft landing hopesRussell 2000 futures sit on uptrend support, making Friday’s close important following Jerome Powell’s speech at Jackson Hole. To get excited about US small caps, you need a soft economic landing and lower borrowing costs given many of its constituents are unprofitable and reliant on capital markets. Given Powell will discuss rate cuts and flag confidence in the Fed’s ability to stick a soft landing, it comes across as recipe for upside. With the uptrend nearby, traders could initiate longs around these levels or even a touch lower with a stop loss below the level for protection. Should the price break 2186.4, there’s little in the way of visible resistance until the record highs. If the trade works in your favour, consider raising you stop to entry level or higher, providing a free hit on upside. Good luck! DS
CME_MINI:RTY1!Long
by FOREXcom
What does OIL (BRENT PETROL) mean for the world economy?#BRENT Oil (Petrol) 1W chart; What does oil mean for the world economy? Oil is critical to the world economy and is considered the basic energy source of modern industrial societies. And then there are the quarterbacks. Market makers, a term we hear a lot in the crypto space. These and similar important charts cannot be moved by ordinary people. They cannot afford it. Only the most important countries in the world can do it. So what usually happens when these charts come to trend breaks? While situations such as war, geopolitical tensions, chaos, finding a vaccine for an existing virus move the chart upwards, Situations such as viruses, recessions, economic depressions also move the chart downwards. Significant chart movements are only possible with these and similar news. Conscious or unconscious. If you think there is anything unconscious in the world, I can't say anything about it. The trend line in the middle is important. I have indicated the details of the important breaks and critical intersections on the chart. But there is one place I would like to draw your attention. Russia-Ukraine war; The chart is rising sharply with pre-decline gapped openings and momentum candles. What happens in the world in such a situation? Energy, industrial production costs, important basic services such as electricity, heating, transportation, raw material prices would increase. Global economic slowdowns. Geopolitical tensions increase. In short, inflation would be fueled. Just like the economic crisis that would be caused by a sharp fall in the oil prices of the countries that depend on oil for their economies. Then energy companies cannot make a profit. Labor prices would fall, companies would go bankrupt, unemployment would rise. In short... Inflation was deliberately and willfully fueled. Because it was time to start raising interest rates. The world was not ready for that yet. With the war, the chart went up 40% in 2 weeks. I am not talking about any coin in crypto, I am talking about the oil chart increasing 40% in such a short time. You all know the scenario afterwards. The top of the chart is where the red needle is. March 2022. The Fed has officially started the cycle of rate hikes with 25 basis points.
VELOCITY:BRENT
by ugurtash
Canadian dollar shrugs as Can. CPI drops to 3-year lowThe Canadian dollar is almost unchanged on Tuesday after posting gains over the past two days. In the North American session, USD/CAD is trading at 1.3636 at the time of writing. Canada’s headline CPI rose to 2.5% year-on-year in July, down from 2.7% in June and matching the market estimate. This marked the lowest annual inflation level since March 2021. Monthly, inflation rose to 0.4% in July following a decline in June of -0.1% and in line with the market estimate. The jump in the monthly report was driven by higher gasoline prices. Core CPI, which is more closely monitored by the Bank of Canada, also eased. The average of two of the Bank of Canada’s (BOC) core measures of inflation eased slightly to 2.55% year-on-year in July, compared to 2.7% in June. The decline in inflation is an encouraging sign for the BoC, which would like to continue trimming interest rates as the economy cools and also provide relief to homeowners who are struggling with high rates. The Bank of Canada meets on September 4 and is mindful that the Federal Reserve is almost certain to lower rates, perhaps by a half-point. This means that BoC policy makers don’t have to worry that another rate cut would hurt the Canadian dollar if the Fed follows suit with its own rate cut. The Federal Reserve will almost certainly lower rates at the September meeting, with uncertainty as to the size of the expected reduction. The probability of a 25-basis point cut stands at 75% and a 50 bps cut at 25%, according to the CME’s FedWatch. On Friday, Jerome Powell will address the Jackson Hole Symposium and could signal what the Fed has in store for next month’s meeting. USD/CAD tested support at 1.3614 earlier. Below, there is support at 1.3594 There is resistance at 1.3650 and 1.3670
by OANDA
Additional rebound in US30 remains possible US30 is showing a continuous uptrend as expectations for the US economy arise, along with the anticipation that Chairman Powell may provide clues about rate cuts at the Jackson Hole meeting. Goldman Sachs lowered its 12-month recession probability for the US economy from 25% to 20% following the release of July retail sales and jobless claims data. The current market consensus is that the August employment report will determine future US30 price movements. Morgan Stanley stressed that the report's outcome will be the real test for the market, warning that a report showing weak employment would reignite growth concerns. US30 quickly breached EMAs and continued its uptrend, rising above the trendline. The index needs an additional price trigger to retest its highs, but the current positive trend is expected to continue for the time being. If US30 sustains support above the trendline, the index may gain upward momentum toward the 41500 high. Conversely, if US30 is pushed below the trendline and fails to hold above EMAs, the price may break the 39300 support and fall further to the 38000 level.
DJ:DJI
by inkicho_exness
Fed’s Powell to Address Rate Cuts at Jackson Hole: What to KnowThe annual Jackson Hole Monetary Policy Symposium takes place this week. Jay Powell, head of the Federal Reserve, will step up to the podium on August 23 and shed light into the central bank’s interest rate-cut timeline. His words will echo around global markets and either propel stocks higher on rate-cut optimism or knock them down if the outlook turns gloomy in the lead-up to the Fed's rate-setting meeting on September 18. No in-between. The most exclusive retreat in central banking — the Jackson Hole Monetary Policy Symposium — is gathering top bankers, economists, financiers and other financial heavyweights for three days of idea swapping, hint dropping and market popping (hopefully.) What’s Jackson Hole? Every August, the top dogs in global finance trade their suits for some Wyoming flannel and gather at Jackson Hole. Hosted by the Kansas City Fed since 1978, this is the forum to brainstorm the future of monetary policy and send it out to traders ready to absorb every word. It’s like summer camp for the financial elite, except the campfire stories can crash markets or send them soaring. When the Fed Chair speaks here, the world listens. Major policy shifts have been telegraphed at Jackson Hole, from hints of rate hikes to the next round of quantitative easing. If you’re trading, you can’t afford to ignore what’s said — or not said — in these mountain-side discussions. Highlights from Past Forums 2010: Ben Bernanke, then Fed Chair, hinted at QE2, a measure to spur growth and keep prices steady through bond purchases, and the markets took off like a rocket. Were you long? Because it was a good time to be long. 2020: Jerome Powell unveiled a major shift in Fed policy towards average inflation targeting. The central bank was more inclined to tolerate inflation above the ideal 2% target before it started pumping interest rates. Expectations for This Week’s Gathering This week’s Fed event will be especially meaningful and consequential. The Fed boss is slated to present his keynote address on August 23. Jay Powell, the man who moves markets with a simple “Good afternoon,” has a lot to break down. Inflation has been going down recently. The latest figures show the consumer price index for July slipped under the 3% mark for the first time since 2021. Consumer spending remains resilient. The retail sales report, again for July, showed that the mighty American shopper upped spending by 1% , topping expectations. The labor market, however, got way off the beaten path. Just 114,000 new jobs were created in July. This is also what caused the global market shake-up that sent ripples through every asset class — from stocks to crypto and beyond. Against this economic backdrop, Jay Powell will be moving markets and making headlines as he delivers his remarks. Front and center is some sort of further confirmation of an expected interest rate cut — already communicated and most likely already priced in. The question now is not if, but by how much interest rates are getting trimmed. Analysts expect borrowing costs to go down either by 25 basis points or a bigger, juicier 50-basis-point cut. And here’s what each one of these means and what’s at stake. If the Fed chooses to cut rates down by 25bps, it risks not doing enough to prevent the economy from tipping into a recession. Higher rates for longer make it more difficult for businesses to borrow and drive growth. But if the Fed chooses to cut rates by too much — a jumbo 50bps cut — it runs the risk of reigniting inflation and, what’s even more, fueling another speculative bull run in the markets. Low rates make money less expensive as loans cost less. The expansive monetary policy measure of cutting interest rates aims to boost economic growth both on the business level and the consumer level. Companies take out loans to expand their operations, build new stuff and hire more workers. And the average consumer finds it easier to get a mortgage or buy a new car (or some Bitcoin ?). Overall, more money is spinning around, creating opportunity and offering liquidity for deals across markets. Brace yourselves as Jay Powell gets ready to drop some hints and prepare the audience for the Fed’s next meeting coming September 17-18. The markets may very well be heading into a rollercoaster few weeks as they try to predict the scale of interest rate cuts. Are you getting ready to pop a trade open this week? Share your thoughts and expectations below!
SP:SPX
by TradingView
8
British pound calm ahead of UK jobs reportThe British pound is drifting on Monday. GBP/USD is trading at 1.2768 early in the North American session, up 0.08% on the day. The UK releases the employment report for the three months to June and we could see signs of a cooling labour market. Annualized average earnings including bonuses, which has hovered between 5.5%-6% all year, is expected to fall sharply to 4.6%. The previous reading came in at 5.7%, the lowest since September 2022. The unemployment rate has remained unchanged at 4.4% for the past two readings, the highest since September 2021. Unemployment is expected to nudge up to 4.5% in the three months to June. This would signal that the labor market is weakening and would make If wage growth declines and the unemployment rate rises in tomorrow’s report, it would support the case for the Bank of England delivering another rate cut, perhaps as soon as next month. The BoE meets on September 19, just one day after the Federal Reserve is widely expected to cut rates by at least a quarter-point. The BoE joined the central bank trend of cutting rates earlier this month when it lowered rates by a quarter-point to 5%. We have entered a new phase of the central bank cycle, with most of the major central banks having already lowered rates. The Federal Reserve will almost certainly lower rates at the September meeting, but by how much? Just one month ago, the markets had priced in a quarter-point cut at 90%, according to the CME’s FedWatch, but then the US posted some weak numbers and the financial markets sank. This has boosted the likelihood of a half-point cut, which on Friday was around a 50/50 split with a quarter-point cut. Still, not everybody who has a say is urging a rate cut. Fed Governor Michelle Bowman, a voting member on the FOMC, said on Friday that she is hesitant about cutting rates, since inflation is “uncomfortably above” the 2% target and the labor market remains strong. GBP/USD is testing resistance at 1.2779. Above, there is resistance at 1.2801 1.2753 was tested in support earlier. The next support level is 1.2731
by OANDA
Canadian dollar rallies, jobs report loomsThe Canadian dollar has shined this week, posting gains over the past four days and rising 1%. Will the impressive rally continue? In the North American session, USD/CAD is trading at 1.3732, unchanged on the day. Canada wraps up the week with the July employment report. The June report was soft, with job growth coming in at -1.4 thousand, a rare decline. The markets are expecting strong turnaround today, with an estimate of 26.9 thousand. The flip side is that the unemployment rate is expected to nudge up to 6.5%, compared to 6.4% in June. If the employment report is a mix as expected, it will be interesting to see how investors respond. The Bank of Canada will be watching closely as it looks to the next meeting on September 4. The BoC has led the recent global trend of lowering rates, having trimmed rates by a quarter-point at each of the past two meetings. If the labour market shows further signs of cooling, it will support the case to lower rates again, perhaps as early as September. The Federal Reserve is virtually guaranteed to cut rates when its meets on September 18 and this will make it easier for the BoC to cut without putting downward pressure on the Canadian dollar. In the US, weaker economic data and the meltdown in the global stock markets has raised expectations of a half-point cut from the Fed in September. The probability of that scenario, only 3% a month ago, has soared to 54.5%, according to the CME’s FedWatch. The market slide led to calls for an emergency rate cut, but the US stock market has rebounded this week. Still, there is an uneasy calm as fears persist that the US economy is showing signs of deteriorating quickly and the sell-off could reignite if the US posts weak data. 1.3746 is a weak resistance line, followed by 1.3809. There is support at 1.3704 and 1.3679
by OANDA
Red Monday: Emergency rate cut needed? US equities just experienced their worst day since 2022, with the S&P 500 dropping 3.0%, the Nasdaq falling 3.4%, and the Dow Jones Industrial Average plummeting by 1033 points. All sectors in the US saw declines, with mega-cap tech stocks performing particularly poorly. Notably, NVIDIA saw a sharp fall of 15% during the trading day, though it managed to “recover”, ending down 6.4%. Some have called for an emergency rate cut from the Fed, but this is unlikely as this event, as it stands, is not an existential threat to the markets. It's just a large sell off. Did US stocks get off lightly? Ahead of the US trading session, Japan's stock market experienced its steepest decline since Wall Street's Black Monday in 1987, fueling fears of widespread market instability. Despite the severe sell-off, some relief came from the ISM Services PMI, which indicated a stronger rebound in the services sector, helping to alleviate investor concerns to some extent. Riskier assets, such as Bitcoin, were not spared, plunging from nearly $62,000 on Friday to around $54,000 by Monday. Contributing factors to the market turmoil include fears that the Federal Reserve is lagging in cutting interest rates, potential unwinding of the Yen carry trade, and the Sahm rule signaling the onset of a recession. This rule signals the onset of a recession when the three-month average unemployment rate rises by 0.5 percentage points or more above its lowest point in the past year. The threshold was surpassed recently when the unemployment rate climbed to 4.3%.
BLACKBULL:NAS100
by BlackBull_Markets
EURUSD Simple Trade Plans; Pre/Post ECB News (new uptrend).ECB deposit rate facility news comes out soon, as well as speech from the ECB in general terms relating to monetary policy. Anything that confirms a quicker easing cycle will likely feed into a downside drip for the EURO. This comes as a near term uptrend forms on a second high. Upside moves will rely on anything that will delay a cut (unlikely). The FED has made its position clear lately leading to real weakness around the USD.
by WillSebastian
10
USDJPY to Nearly 4-Month Lows on Shifting Policy DynamicsThe Bank of Japan followed a cautious and slow path away from the ultra-loose monetary setting after abandoning the negative rates regime and the yields curve control, in the historic decision of March. But price pressures persisted, wages increased substantially after the spring negotiation and the Yen was further devalued, forcing officials to step up their tightening efforts. They hiked rates for the second time in this cycle, to around 0.25%, while pointing to more moves ahead if the economy evolves as anticipated. Furthermore, they announced a plan to slash their bond purchases, so that they will halve by Q1 2026. After hitting 38-year highs at the start of the month, USD/JPY reversed course due to Japan’s FX interventions rising expectations for BoJ hikes and increased optimism around Fed cuts. The forceful action by the Bank of Japan along with the Fed opening the door to a September pivot this week, exacerbated the decline to the lowest levels since mid-March. The pair is now exposed to 146.47 and the shift in monetary policy dynamics can fuel further weakness. On the other hand, BoJ warned it could increase bond purchases again if needed, while market pricing for three cuts by the Fed may be stretched. Furthermore, the rate differential remains wide and the favorable carry trade could persist. The Relative Strength Index is oversold and this can drive a rebound above the 200Days EMA (blue line), but 200H4 EMA (black line) looks much harder. Focus now shifts to Friday’s US NFPs which are becoming increasing important for the policy path, as disinflation is back on track. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 59% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
by FXCM
USD/JPY – Yen goes on a tear after BoJ rate hikeThe Japanese yen continues to sparkle. USD/JPY is trading at 150.27 in the European session, down 1.62% on the day at the time of writing. Earlier, the yen strengthened to 150.04, its highest level against the dollar since March 19. The Bank of Japan showed an aggressive side rarely seen at today’s meeting. The BoJ raised the benchmark rate to around 0.25%, up from the previous range of between 0% and 0.25%, its highest level since 2008. The move was considered aggressive, as the markets were uncertain whether the central bank would raise rates or continue to hold. The BoJ tempered the hike by noting in the rate statement that it expects real interest rates to remain “significantly negative” and that it will continue an accommodative policy to boost the economy. Still, this marks the second rate hike since March and demonstrates that the BoJ is serious about tightening policy and keeping inflation in check. Overshadowed by the dramatic rate hike, the BoJ announced it will taper its Japanese government bond purchases in half by the first quarter of 2026. The move will barely make a dent in the Bank’s bond holdings, but nonetheless indicates a shift in policy and the intent to unwind its massive monetary stimulus. The Federal Reserve will hold its policy meeting later today. It’s virtually certain that the Fed will maintain rates for a seventh straight time but that doesn’t mean today’s meeting will be a sleeper. Investors will be carefully following the rate statement and Jerome Powell’s follow-up press conference. Today’s meeting is a good opportunity for the Fed to set up a September rate cut, which the markets have fully priced in. USD/JPY has pushed below support at 152.70 and 151.38. Below, there is support at 149.59 154.49 and 1.5581 are the next resistance lines
by OANDA
Pressure Builds Ahead of Major Central Bank Marathon It's a huge week for central banks with the Bank of Japan (BOJ), Federal Reserve (Fed), and Bank of England (BOE) set to deliver their decisions within a 32-hour window. Market activity remains largely subdued in anticipation. The BOJ’s decision is the most unpredictable. Current market sentiment suggests a ~60% likelihood of a 10-basis point hike and a ~40% chance of no change. A lack of action could undermine the yen's recent gains with a potential resistance at 155.30 (100 MA). The Fed's announcement is scheduled for Wednesday. Market expectations for a rate cut are just 5%. Investors are keenly awaiting any signals regarding a potential move in September. Finally, the Bank of England has the market guessing with an almost 50 –50 chance for a cut. GBP traders are also digesting a key speech from the new finance minister Rachel Reeves in which she unveiled plans for some spending cuts/ or tax increases to fill a £22bn spending shortfall that was 'covered up' by the Conservative government. Traders now also have 30th October to look forward to as the date of the autumn budget.
by BlackBull_Markets
USD/JPY looking for directionThe Japanese yen continues to show volatility but has closed right where it started over the past few sessions. USD/JPY is trading at 153.65 in the European session, up 0.04% on the day. The yen is coming off an excellent week, surging 2.3% against the US dollar. We’re unlikely to see much movement from the yen today, as there are no US releases on the calendar and only one minor release out of Japan. The Federal Reserve meets later this week but the buzz in the market is around the September meeting. The Fed will meet on Wednesday and there have been a few voices calling for a rate cut, but it’s a virtual certainty that the policy makers will maintain the benchmark of between 5.25% and 5.50%. The markets have priced in a rate hike in September for weeks but things have become interesting with the latest inflation release this past Friday. The PCE Price index ticked lower to 2.5% y/y in June, down from 2.6% in May and in line with expectations. Core PCE remained at 2.6%, just above the market estimate of 2.5%. Monthly, the news was very positive - the PCE Price index rose 0.1% and the core rate climbed 0.2%. As well, personal spending and income both eased in July. The data shows that inflation is on a downtrend and that the spike in the first quarter was an aberration. As well, consumer spending is slowing. The markets have responded by raising expectations for a 50-basis point cut in September to 11.9%, compared to 3.8% one week ago, according to the CME’S FedWatch. A quarter-point cut is very likely, with a probability of 87.7%. The Fed could use this week’s meeting to set the stage for a cut at the September meeting, which means the markets will be closely monitoring the rate statement and Jerome Powell’s rate conference. USD/JPY has pushed past resistance at 154.03 and put pressure 154.36 before retreating 153.58 and 153.25 are the next support levels
by OANDA
USDJPY Subdued at Key Tech as Fed & BoJ LoomThe pair comes from its longest losing streak of the year (four week), correcting from its 38-year peak at the beginning of the month. It tests crucial technical levels provided by the 200Days EMA (blue lines) and the 38.2% Fibonacci of the rally from the December 2023 low to the aforementioned high. This creates risk for deeper decline towards the 61.8% Fibo that would bring 146.47 in the spotlight. On the other hand, USD/JPY tries to defend this support cluster, above which it can push for EMA200 (black line). Retaking it would give bulls control and the opportunity to challenge 161.94, although the upside does not look particularly friendly. Other than intervention speculation, the USD/JPY slide is a result of the shift in the monetary policy dynamics and this week’s decisions by the Fed and the BoJ can determine the pair’s trajectory and spur volatility. The Bank of Japan has followed a slow and cautious path to normalization after the March exit form negative rates and there is mounting anticipation for bolder action this time around. Markets see policymakers announcing a reduction in bond purchases and there are also expectation for another hike, but the latter appears to be more contentious. Such action could help the Yen’s rebound, but BoJ has shown apprehension and has surprised markets before. The US Fed on the other hand appears to be coming closer to a rate cut following the resumption of disinflation and moderation in job gains. Markets are aggressively pricing three moves this year and expect policymakers to lay the ground for a Fed pivot at this week’s meeting. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 62% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”), previously FXCM EU Ltd (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 59% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
by FXCM