Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
EURGBP rose on dovish BoE
Information is not investment advice
Ichimoku Kinko Hyo
CHF/JPY: The CHF/JPY pair is now testing the upper level of the cloud. A successful attempt to exit the Kumo will fuel the pair towards the previous top. On the other hand, a plunge of the currency pair will push the market to test the lower level of the cloud.
After a rally in equities on Wednesday, markets plunged yesterday by between 4% and 5%. Equities came under a lot of pressure just at the opening bell, reversing the post-FOMC rally. All sectors were notably lower, but growth names were the standouts with tech, cars and semiconductors slaughtered. Cyclicals underperformed defensive stocks in a massive scale, as energy, consumer staples and utilities held up very well. Dow Jones closed lower -3.1%, S&P500 -3.6% and NASDAQ -5.0%. US futures are flat this morning.
As equities sold off broadly, yields rose and EURUSD fell back near 1.05. EURGBP rose on dovish BoE.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?