The dollar exceeds 100 before inflation; The dollar yen reaches a high of the last 7 years

Key points of the article:

  • Bullish pressure on the dollar before inflation
  • USD / JPY: The dollar yen reaches its highest level of 2015

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

Intermediate resistance 1.0200

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

Neutral

0.7219

0.6729

RBNZ meeting tomorrow

USD / CHF

Neutral

0.9472

0.915

Intermediate resistance 0.9375

USD / CAD

Neutral

1.2957

1.245

USD / JPY

bullish

125.85

116.36

Test plus skin 2015

Bullish pressure on the dollar before inflation

The dollar index rose above 100, supported by strong US yields ahead of inflation data which should show US prices rising more in more than 16 years, reinforcing expectations of an aggressive tightening policy of the Fed.

The dollar’s recent gains against the yen (JPY) have been the most surprising. Japan’s Finance Minister Shunichi Suzuki declined to comment on specific prices in the currency markets on Tuesday, but said the government is closely monitoring the yen and that excessive volatility and disorderly movements could have a negative effect on the economy and financial stability.

The dollar also steadily gained ground overnight against the offshore Chinese yuan (CNH), reaching a two-week high of 6,390 at the start of the trade, before falling back.

The strength of the dollar was more evident against the yen and the CNH, currencies of economies with accommodating central banks

The Bank of Japan has intervened several times to keep benchmark bond yields around zero.

US consumer prices in March likely rose the most in 16 and a half years, according to a Reuters poll of economists, as the war in Ukraine pushed the cost of gasoline to low levels. The data will be published at 2.30pm.

The yield on the benchmark 10-year bond rose to 2.836%, its highest since December 2018, before stabilizing. If the progression of this first session is maintained, it will be the eighth consecutive earnings session for the returns of this expiry.

Elsewhere, the euro was unable to maintain gains from its small relief rally Monday after French leader Emmanuel Macron beat far-right opponent Marine Le Pen in the first round of presidential voting. Investors will remain vigilant, however, as the far-right candidate’s program is considered very anti-business.

Macron appears poised to return to power after the April 24 vote, but the magnitude of his victory will likely be much less than when it was seen as a surprise five years ago, and likely subtle enough that the political earthquake that would have been a victory for Le Pen cannot be entirely ruled out.

The Australian dollar stabilized this morning after four consecutive losing sessions as lower oil prices weighed on the commodity-linked currency.

The New Zealand dollar has remained stable, ahead of a much-attended meeting of the Reserve Bank of New Zealand, during which a rate hike of 50 basis points is considered.

USD / JPY: The dollar yen reaches its highest level of 2015

The US currency was trading around 125.50 yen near its June 2015 high of 125.85. Exceeding this level would take the dollar to its highest level against the yen since 2002.

The trend therefore remains bullish above the 13- and 34-period ascending moving averages. Breaking the 2015 high would unlock significant upside potential towards the 2002 high of 135.00 yen.

However, as the RSI is in a large overbought zone and as long as it is not exceeded 125.85, there is a risk of correction. In this case, the support is on the 38.2% Fibonacci retracement level, which also corresponds to the last market trough at 121.10.

Evolution of the dollar yen in the daily data:

Forex morning meeting: dollar breaks 100 before inflation;  The dollar yen reaches a high of the last 7 years

Twitter @CDamestoy

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