Forex Daily Recap – Strong 108.73 Resistance Rejected Ninja’s UpsideDuring the day, US President Donald Trump came up with another set of tweets, criticizing the Fed. Cable slowed down as Alan Duncan, Junior Foreign Office Minister, resigned today, over Hard Brexit concerns.
The Ninja was forming a symmetrical triangle as an intermediate halt for downtrend continuation. After marking the daily opening near 107.93 level, the boundaries of the symmetrical triangle confined the upside. As a result, the USD/JPY pair touched the daily high on Monday near 108.06 level. Since the start of June, the pair had hardly crossed above the sturdy 108.73 resistance mark. Such a range-bound approach continued to sustain in the pair’s movements even today. The RSI was pointing towards 50 level, indicating neutral buyer interest. Later the day, Bank of Japan (BoJ) Governor Haruhiko Kuroda mentioned about the heightening impact of the global trade chaos on the Japanese economy.
“We will carefully examine various risk factors, in addition to developments in economic activity and prices as well as financial conditions, and weigh the benefits and costs of the policy effects. In this way, the Bank will continue to conduct its policy in an appropriate manner,” Kuroda said in a speech at a seminar hosted by the International Monetary Fund in Washington
The US Dollar Index was entirely silent on Monday’s trading session amid lack of significant USD-specific events. The Greenback hardly moved from its opening mark near 97.26 level. Anyhow, the USD Index managed to maintain the volatility within the 1-month old symmetrical triangle. Meantime, the Greenback seemed to ignore the disappointing June Chicago Fed National Activity Index. Notably, the Index had reported -0.02 points over 0.10 points forecasts.
During the day, US President Donald Trump came up with another set of tweets, criticizing the Fed.
With almost no inflation, our Country is needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve. In addition, Quantitative Tightening is continuing, making it harder for our Country to compete. As good…..
— Donald J. Trump (@realDonaldTrump) July 22, 2019
Trump added that if the Fed cuts the interest rates, then that would improve the US GDP and thereby the country’s wealth accumulation.
After hitting the strong 1.1284 resistance, the Fiber had rebounded, moving to the south on July 18. The slump in the EUR/USD pair appeared to pause since last day’s North American session. Today, the pair continued to maintain consolidation between 1.1207/1.2242 range level. However, any movement on the upside would have activated the overhead significant SMA conflux. Also, the robust 1.1201 support level acted as a firm cushion, preventing downside price actions.
The Cable started trading near 1.2514 level and kept heading to the south throughout the day. The bearish sentiment in the GBP/USD pair developed amid rising concerns over a Hard Brexit. Chances of Boris Johnson winning over opponent Jeremy Hunt remains higher. As a result, the Britishers fear of a Hard Brexit in the near-term if Boris steps in as the new UK PM on July 24. Many UK ministers have either already taken resignation or planning to do so, showing strong disapproval to a Hard Brexit stance. Alan Duncan, Junior Foreign Office Minister, resigned today following Margot James who stepped down last week as the Cultural Minister.
However, the GBP/USD had earlier showcased a Golden Cross as the short-term 50-day SMA crossed and moved above the significant 200-day SMA. Quite notably, the pair’s daily movements appeared to remain sandwiched between 200-day and 100-day SMA. Anyhow, the Relative Strength Index (RSI) was indicating 46 level, showing a lack of interest among the Cable traders.