US GDP rate in focus

The USD remained relatively inactive against its counterparts yesterday yet got a push higher during today’s Asian and especially during today’s early European session. On a monetary level, Fed Board Governor Waller, highlighted the strong US employment market and the slow progress in easing inflationary pressures in the US economy, suggesting a delay or even a reduction of rate cuts in the coming year. The comments leaned on the hawkish side and tended to highlight the worries expressed among Fed policymakers for cutting rates too soon, thus we see the greenback being supported on a monetary level. As for financial releases we highlight the release of the final US GDP rate for Q4 later in the early American session and a possible acceleration if compared to the preliminary release may provide some support for the USD. We also note that the release of the weekly initial jobless claims figure could also be a market mover for the USD.

Across the pond during today’s early European session, we got the UK’s GDP rates for Q423, and the rate remained in the negatives on a quarter-on-quarter level, if compared to the preliminary release. The growth data suggest that the UK economy is in a shallow recession and tends to darken the UK’s economic outlook and could weigh on the pound.

Cable seems to maintain its sideways motion just above the 1.2600 (S1) support line. We tend to maintain our bias for the sideways motion yet GBP/USD’s price action is constantly testing the S1 and the RSI indicator remains below the reading of 50, which tends to imply that despite a relative easing there seems to be still a bearish predisposition of the market. Yet for a bearish outlook, we would require the pair to break the 1.2600 (S1) support line and start actively aiming for the 1.2480 (S2) support line. For a bullish outlook, the bar is high as we would require the pair to break the 1.2760 (R1) resistance level, thus paving the way for the 1.2890 (R2) resistance level.

In the land of the rising sun, the release of BoJ’s summary of opinions for the March meeting tended to verify comments expressed by BoJ policymakers for a slow and long rate toward monetary policy normalization. The release had little effect on the JPY and on a fundamental basis the warning issued by Japan’s finance minister Suzuki, as mentioned in yesterday’s report, seems to keep the JPY in check, preventing it from further devaluation, at least against the USD. We note the release of Tokyo’s CPI rates for March tomorrow as important on a macroeconomic level, which may allow us to see the tendency of inflationary pressures in Japan, given the metropolis population density.

On a technical level USD/JPY maintained its tight rangebound movement yesterday between the 151.90 (R1) resistance line and the 150.85 (S1) support level. The price action verified the stabilisation of the pair’s movement as it broke the upward trendline guiding the pair as the pair hit a ceiling at the 151.90 (R1) resistance line. Furthermore the RSI indicator continues to run along the reading of 50 implying a rather indecisive market and the Bollinger bands narrowed implying less volatility, with both indicators suggesting that the sideways motion may be allowed to continue. For a bullish outlook, we would require USD/JPY to break the 34-year high level at the 151.90 (R1) resistance line, with the next possible target being possibly the 153.80 (R2) resistance level. Should the bears take over, we may see the pair breaking the 150.85 (S1) support line and aim for the 149.00 (S2) support base.

その他の注目材料

Today in the European session, we note from Switzerland, March’s KOF indicator and from the Czech Republic the revised GDP rate for Q4. In the American session, we get from Canada the business barometer for March and January’s GDP rate, while from the US the final UoM consumer sentiment for March.