10 Sep, 2023
5 minutes
EURUSD USDJPY Market Insight
EUR/USD
The EUR/USD will be poised to extend its current slide according to institution analysis, since the markets incorrectly predict the possibility of another interest rate increase from the European Central Bank. The ECB will hold interest rate decision on September 14. In view of rising inflation, the market expects that the possibility of a further increase in interest rates by 25 pips is close to 50%.
We can see EUR/USD has formed bottom divergence and then rebounded on H4 chart. But the slowdown in euro zone economy will be enough to prompt the ECB to abandon raising interest rates, that could lead to further weakness in the euro dollar. The possible strategy for EUD/USD is to set sell limit around 48 hours moving average, stop loss must be compulsory.
USD/JPY
USD/JPY opened down 90 points on Mondy after the Bank of Japan governor said in an interview on Saturday that ending negative interest rates is one of the feasible options if prices and wages will continue to rise. Japanese stocks and JGBs are likely to react negatively, while Asian currencies should get a boost if the dollar weakens. It is possible that the BOJ will have enough information and data before the end of the year to judge whether wages will continue to rise, which is a condition for adjusting its easing policy. We can see USD/JPY tumbled after Japanese official said the possibility of finishing easing policy.
The price has formed double top on H4 chart and moving average system was broken. MACD also constitutes top divergence which means potential reversal would be happened. However, owing to strong US dollar and unclear easing policy decision, the buy limit can be set between 144.60 to 145.40.