Major currencies weaken against the greenback; GBP / USD, broken cable 1.13000

Key points of the article:

  • The yen hit a 2002 low, the euro at 5 weeks, the kiwi down after RBNZ
  • The cable breaks the psychological bar at 1.3000

Prejudice

Resistence

Support

Note

AUD / JPY

bullish

94.3

84.54

AUD / USD

Neutral

0.766

0.7374

EUR / AUD

bearish

1.4945

1.4318

EUR / CHF

bearish

1.0402

0.978

EUR / GBP

Neutral

0.854

0.8296

Bearish slant in resistance

EUR / JPY

bullish

137.5

133.2

EUR / USD

bearish

1.1186

1.076

GBP / JPY

bullish

164.6

158.22

GBP / USD

bearish

1.33

1.2845

Minor support 1.3000

NZD / USD

bearish

0.7219

0.6729

USD / CHF

Neutral

0.946

0.915

Intermediate resistance 0.9375

USD / CAD

Neutral

1.2957

1.245

BOC meeting

USD / JPY

bullish

130

116.36

Crossing resistance 125.85

The yen hit a 2002 low, the euro at 5 weeks, the kiwi down after RBNZ

The euro fell to a five-week low this morning as peace prospects in Ukraine appeared to be worsening, while the kiwi was shaken after New Zealand’s central bank reported its strongest rate hike in twenty years for curb inflation.

While the Reserve Bank of New Zealand’s 50bp hike was greater than many economists expected, it remained within traders’ expectations and politicians tempered the move by not hitting the expected rate spike.The New Zealand currency moved away from resistance around its 200-day moving average as the central bank presented its shares as an extension of the bulls without changing its outlook.The market was predicting a much higher peak rate than the central bank

The Bank of Canada will meet later on Wednesday and is also expected to make its biggest hike since 2000 as monetary policymakers around the world begin stepping up their efforts to contain mounting price pressures.

Traders overlooked a slight tightening of language by Japanese officials regarding the rapid weakening of the yen which came under considerable pressure which eventually broke a major resistance level at 125.86. Finance Minister Shunichi Suzuki said the government is monitoring currency movements with a sense of urgency.

The yen enjoyed a moment of lull yesterday as slightly weaker-than-expected US inflation data gave bonds a boost and investors were hoping that price pressures had perhaps peaked.

A second consecutive monthly drop in used car prices helped the main CPI rise 0.3% in March, when it was expected to rise by 0.5%. But given that annual headline inflation still stood at 8.5% and rapid rate hikes are still on the cards, that wasn’t enough to sidetrack investors from long dollar positions.

On Tuesday, Russian President Vladimir Putin described the peace talks as “a win-win situation”, which also weighed on the euro and the pound, which were vulnerable to concerns over the economic fallout of the war.

The Australian dollar and Chinese yuan also weakened slightly after a surprise drop in Chinese imports heightened investor concerns about weakening demand. New restrictions in several Chinese cities to fight Covid also worry investors.

UK, The annual inflation rateL it fell from 6.2% in February to 7% in March 2022, the highest rate since March 1992. The figures are higher than expected at 6.7%.

Inflation in Great Britain:

Forex morning meeting: the major currencies weaker against the greenback;  GBP / USD, broken cable 1.13000

The cable breaks the psychological bar at 1.3000

The Cable is going through a period of weakness, resuming its medium-term bearish trend by breaking its psychological support at 1.3000. The short-term moving averages are declining. Prices may then weaken towards the October 2020 weekly support at 1.2846.

A close above 1.3000 would mitigate this negative reading which would be neutralized if Cable manages to break through the 34 period moving average. Resistance is at 1.3300.

Evolution of the pound against the dollar in the daily data:

Forex morning meeting: the major currencies weaker against the greenback;  GBP / USD, broken cable 1.13000

Twitter @CDamestoy

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