The Japanese yen (JPY) witnessed a downtrend against other Asia-Pacific currencies in the early hours of the Asian session today, following a global boost in manufacturing data. The yen, often sought after as a safe-haven currency in turbulent times, lost its luster as positive global economic metrics pointed to increased investor confidence.
In detail, the USD/JPY edged higher by 0.2%, registering at 106.16, while the AUD/JPY and NZD/JPY both saw increments of 0.1%, pegging them at 75.58 and 70.15 respectively. Conversely, the EUR/USD trailed by 0.1% to settle at 1.1757. Market analysts from CMC Markets noted a pivot in market sentiment as traders transitioned from long euro positions, bolstering the U.S. dollar in the process.
Aussie Dollar Stands Tall; Eyes on RBA Statement
The AUD/USD maintained its momentum, floating near an impressive 18-month peak of 0.7200. Insight from the Commonwealth Bank of Australia (CBA) suggests that this could be attributed to the continued frailty of the U.S. dollar. The trading community has its sights set on today’s policy statement from the Reserve Bank of Australia (RBA) at 2.30 pm local time. Nevertheless, CBA remains skeptical about any substantial shifts in the Australian dollar’s position post-statement, even though market consensus predicts the RBA to retain its key interest rate at a constant 0.25%.
Dollar’s Fortitude; Precious Metals and Oil on the Radar
A 0.2% ascension was observed in the WSJ Dollar Index, following an upbeat ISM manufacturing report. Despite the overall positive sentiment, Cambridge Global Payments voiced concerns over the employment subsection, which hinted at a continued loss in manufacturing jobs. The ICE U.S. Dollar Index echoed similar sentiments, pushing slightly north to 93.51.
On the commodities front, spot gold witnessed a marginal addition, up by $2.00, clocking in at $1,976 an ounce. In contrast, spot silver displayed a minor dip to settle at $24.32 an ounce. Meanwhile, U.S. WTI crude oil futures for September surged by 1.8%, marking a price of $41.01 per barrel.
Reserve Bank of New Zealand’s Monetary Twist
Market pundits are gearing up for the Reserve Bank of New Zealand’s upcoming policy statement on August 12. ANZ Bank anticipates an amplification in the bank’s government-bond purchases, projecting a leap from NZ$60 billion to NZ$90 billion. This anticipated move also carries with it an expectation of an extended timeframe for these purchases, potentially stretching to 18 months from the earlier 12.
Remote Work Revolution: Productivity or Pitfall?
The COVID-19 pandemic, with its global footprint, has dramatically altered the traditional workspace. Recent studies by researchers from the esteemed Harvard Business School and New York University have shed light on this transformation. Preliminary data indicates that remote employees, on average, have extended their workdays by 49 minutes, marking an 8.2% augmentation. This has been attributed, in part, to the uptick in after-hours email correspondence. Based on exhaustive analysis from 16 metropolitan behemoths spanning the U.S. and Europe, the data paints a vivid picture of the contemporary remote work landscape. As firms acclimatize to this pandemic-induced paradigm, pivotal questions surrounding productivity, innovation, and corporate stratagems take center stage. A notable trend during these times has been the shift to virtual meetings. Despite an increase in frequency and attendance, these sessions have, paradoxically, seen a reduction in duration.
The evolving narrative around remote work, juxtaposed with dynamic financial markets, outlines a globe grappling with change, uncertainty, and adaptation.
Here are the High Impact Economic events expected today:
As we have observed earlier in the Currency Monitoring Chart, we discovered that NZD/JPY lines are separated with the farthest distance.
The following is NZD/JPY looking at the Daily chart:
INTRADAY MARKET INSIGHTS
USD/JPY Intraday:
Bullish bias above 105.75. The pair has entered a consolidation phase since marking a high of 106.47 yesterday. Currently it has returned to levels above both 20-period and 50-period moving average. The intraday bias remains bullish, and the pair should revisit 106.20 and 106.45 on the upside. Key support is located at 105.75.
EUR/USD Intraday:
Bias remains bullish. The pair remains on the upside after rebounding from a low of 1.1694 yesterday. The 20-period moving average has just crossed above the 50-period one, keeping the intraday bias as bullish. Unless the key support at 1.1735 is breached, the pair should return to 1.1780 and 1.1805 on the upside.
AUD/USD Intraday:
Caution. The pair is challenging the key support at 0.7100 (around the lower Bollinger band) and therefore caution is advised. Unless this key support is breached, the pair should target 0.7130 on the upside (around the upper Bollinger band). Alternatively, a break below 0.7100 would open a path toward 0.7075 on the downside.
NZD/USD intraday:
Rebound expected. The pair posted a rebound and crossed above the 20-period moving average. The relative strength index is around its neutrality level at 50, suggesting the lack of downward momentum for the prices. Hence, as long as 0.6587 is not broken, expect a bounce to 0.6647 and even to 0.6662 in extension. Alternatively, a break below 0.6587 would bring a drop to 0.6561 as a target.
GBP/USD Intraday:
Bullish above 1.3040. The pair stays on the upside after rebounding from a low of 1.3003 yesterday. It has returned to levels above the 20-period moving average, which has just crossed above the 50-period one. A further rebound should bring the pair toward 1.3105 and 1.3140 on the upside. Alternatively, a break below key support at 1.3040 would trigger a further decline toward 1.3005 on the downside.
USD/CHF Intraday:
Under pressure. The pair retreated from 0.9240 and struck to the lower Bollinger band. Besides, the 20-period moving average is turning downward. Hence, unless the resistance level at 0.9200 is violated, the pair should reach 0.9160 and 0.9140 on the downside. On the other hand, crossing above 0.9200 would trigger a technical rebound to 0.9220 as a target.
USD/CAD Intraday:
Downside prevails. The pair retreated from 1.3450 and returned the level below both 20-period and 50-period moving averages. In addition, the bearish cross between 20-period and 50-period moving averages has been identified. Therefore, as long as the resistance level at 1.3420 holds on the upside, intraday negative bias remains with down targets at 1.3370 and 1.3350 in extension. On the other hand, a break above 1.3420 would call for a re-visit of 1.3450.
EUR/JPY Intraday:
Bullish bias remains. The pair is trading above the key support level at 124.24, helping to maintain the bullish bias. The relative strength index stays around its neutrality level at 50, suggesting the lack of downward momentum for the prices. To sum up, as long as the support level at 124.24 is not broken, expect a rebound to 125.13 before targeting to 125.34 in extension. In an alternative scenario, a break below 124.24 would open a path to 123.88 on the downside.
EUR/GBP Intraday:
Key resistance level at 0.9023. The pair is holding on the downside and is under pressure below the key resistance level at 0.9023, which should limit the upside potential. Even though a continuation of technical rebound cannot be ruled out, its extent should be limited. Hence, below 0.9023, expect a drop to 0.8959 and even to 0.8944 in extension. Alternatively, a break above 0.9023 would trigger a rebound with 0.9049 as a target.
