Tools for Traders Top Movers | Heat Map | Pivot Point | Pivot Meters | Action Bias | Volatility Charts Action Insight Mid-Day Report: Yen Steals the Show on Trade War Worries, Sterling Reversed after Brief BoE Spike Sterling attempts to rally after BoE rate decisions but failed to sustain gain. On the other hand, Yen is quietly stealing the show on risk aversion. Investors are worried that the world is finally entering into the phase of trade war with US President Donald Trump's scheduled announce of tariffs against China. Australian Dollar remains the weakest one, for its tie with China, and as weighed down by weaker than expected job data. Euro follows as the second after a string of soft confidence indicators suggested that it's recent growth momentum has already peaked. BOE Voted 7-2 to Leave Bank Rate Unchanged at 0.75% BOE voted 7-2 to leave the Bank rate at 0.75%. The members voted unanimously to leave to asset purchase program unchanged at 435B pound. The members were generally positive over the economic outlook, noting that "recent data releases are broadly consistent with the MPC's view of the medium-term outlook as set out in the February Inflation Report". Wage growth has been in line with BOE's expectations. This has raised the confidence that "growth in wages and unit labour costs would pick up to target-consistent rates". Sterling jumped initially after the announcement with GBPUSD rising to a 7-week high of 1.4216. Gains were pared shortly. The market has priced in over 60% chance of a +25 bps rate hike in May. FOMC Projects Two More Rate Hikes This Year, Followed By Three In 2019 FOMC's rate hike of +25 bps is not news. What caught market attention the most was the median dot plot (which continued to project 3 rate hikes in 2018) and the upgrades in the economic projections. US dollar plunged from almost a three-week highe after the announcement. The message delivered in the accompanying statement and by Fed Chair Powell at the press conference was not as hawkish as some had expected. Powell indicated he was not concerned about an overheating economy despite higher fiscal spending. Rather, he added that trade policies have become a rising concerns among policymakers. Technical Outlook GBP/JPY Mid-Day Outlook Daily Pivots: (S1) 148.53; (P) 149.15; (R1) 149.75; More.... GBP/JPY drops sharply after hitting 150.29 but it's holding above 147.03 minor support so far. Intraday bias is neutral first. While another rise cannot be ruled out, we maintain the view that rebound from 144.97 is a corrective move. Therefore, strong resistance is expected from 150.92 (50% retracement of 156.59 to 144.97 at 150.78) to bring fall resumption. On the downside, below 147.03 will bring retest of 144.97 low first. Break will extend the decline from 156.59 to 143.51 medium term fibonacci level next. However, sustained break of 150.92 will pave the way back to retest 156.69 high. Suggested Readings Dollar Holds Weak Ahead Of Trump's Chinese Tariffs, BoE Decides On Interest Rates USD Takes A Hit Amid Cautious Fed NZDUSD Advances Following The Rebound On 0.7152, Bullish Correction On The Way Dollar Extends Declines As FOMC Sticks To 3 Hikes, BoE And US Tariffs Decision In Focus USDJPY Stands Around 2-Week Low, Bearish In Short- And Medium-Term Currencies: Fed Not Hawkish Enough To Trigger Further USD Gains Economic Data
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