SUMMARY

  • The German consumer price index met market expectations at 2.4% year-on-year. The German 10-year bond auction yielded 2.60%.
  • The possibility of further intervention by the Bank of Japan in the FX market sent the USDJPY down -1.07% from 157.37 to 155.72.
  • US CPI fell only 1 basis point and the Federal Reserve decided to hold interest rates steady. The Nasdaq 100 closed up 0.69% yesterday.

 

Main events:

  • Spanish CPI
  • Industrial production in the euro zone
  • New jobless claims in the US
  • Bank of Japan interest rate decision

EURUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$539
  • Example: 100 pips change in EURUSD price = USD1,000 potential PL.
  • Support 1: 1.0805
  • Support 2: 1.0803
  • Resistance 1: 1.0809
  • Resistance 2: 1.0811

Fundamental Analysis

  • The German consumer price index met market expectations at 2.4% year-on-year. The German 10-year bond auction yielded 2.60%. In the United States, inflation declined by 1 basis point to 3.3% yoy. The Fed finally decided to keep interest rates at 5.50%. The EURUSD rose +0.68% yesterday. It is currently holding above the 1.0806 level.
  • Spanish CPI is expected to increase by 3.6% y/y. Eurozone industrial production is expected to increase by 0.1% m-o-m.
  • In the US, 225,000 new jobless claims are expected.
  • According to Fed statements, a possible interest rate cut is only expected in 2024. This is because inflation is not falling at the expected pace.
  • The currency made an interesting rebound to the 1.0860 area. The price is above its 200-day moving average. The RSI is at 56.47, a neutral zone.

USDJPY

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$499
  • Example: 100 pips change in USDJPY price = USD1,000 potential PL.
  • Support 1: 156.96
  • Support 2: 156.92
  • Resistance 1: 157.05
  • Resistance 2: 157.10

Fundamental Analysis

  • The possibility of further intervention by the Bank of Japan in the currency market sent the USDJPY down -1.07% from 157.37 to 155.72. However, long positions continued, which brought the currency back to the 157.01 level.
  • The BSI business confidence index for the Japanese manufacturing sector came in at -1, indicating a slight improvement in the outlook and business performance of the sector.
  • The Bank of Japan’s interest rate decision is expected today, which should remain stable at 0.10% y/y.
  • Japanese industrial production is expected to fall -0.1% month-on-month.
  • USDJPY, recovered several positions after the significant correction. The price has managed to stay above its 200-day moving average. The price is entering a resistance zone again. The RSI is at 57.55, in neutral territory, so the recovery could continue. The moving averages indicate buying.

NASDAQ 100

Specifications

  • Leverage: 200
  • Units: 1
  • Margin requirement: USD$93
  • Example: movement of 100 points= $1,000 potential PL.
  • Support 1: 19612.41
  • Support 2: 19605.83
  • Resistance 1: 19624.16
  • Resistance 2: 19629.33

Fundamental Analysis

  • The US CPI declined by only 1 basis point and the Federal Reserve decided to hold interest rates steady. The Nasdaq 100 closed yesterday up 0.69%. Currently, the index is up 0.72% and stands at 19,635 points, setting new all-time highs.
  • According to the Fed statement, the bank expects to cut rates in 2024, which goes against market expectations.
  • Elon Musk is still trying to convince Tesla’s majority shareholders of the entrepreneur’s proposed $56 billion compensation package. Most of the opposition is coming from pension funds.
  • The Trade Desk +5.72%, Autodesk +5.45% and Intuit +4.50% were the day’s top bulls. The top decliners were Exelon -4.03%, Illumina -3.62% and Warner Bros -2.86%.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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