Connect with us

Hi, what are you looking for?

Oracle of  Omaha SaysOracle of  Omaha Says

Economy

Forex Chart Patterns: Dollar Strengthens Ahead of PCE Data

Forex Chart Patterns: Dollar Strengthens Ahead of PCE Data

On Friday, the yen experienced a brief decline below the closely monitored level of 145 per dollar, although it was held back by traders’ apprehensions regarding potential intervention by Japanese authorities. Meanwhile, the dollar displayed strength across the board as investors awaited U.S. inflation data, analyzing forex chart patterns for potential trading opportunities.

The main focus for FX markets is the release of the U.S. personal consumption expenditure price index, scheduled for 0830 EDT (1230 GMT). This highly anticipated indicator will provide insights into the pace of price slowdown in the world’s largest economy.

Thursday’s data highlighting the resilience of the U.S. economy suggested that the Federal Reserve has room for further interest rate hikes if inflation data demands it. Consequently, U.S. benchmark 10-year yields recorded their largest increase since late March, rising by 14 basis points.

Positive U.S. Data Drives Dollar Index Growth

The dollar index climbed 0.35% on Thursday, making significant gains against the euro, which experienced a 0.45% decline.

On Friday, the euro remained relatively steady, down 0.15% at $1.0847, hovering near a two-week low. Meanwhile, the British pound advanced 0.3% to $1.2648, benefiting from a slight rise in British government bond yields. Both currencies were close to their respective two-week lows from the previous day.

The pound has been one of the top-performing developed market currencies in the second quarter, rising 2.5%. The dollar index, which tracks the performance of the dollar against six major peers, recorded a 0.8% increase for the quarter. This marks its first quarterly gain since Q3 2022.

Market Analysis and Expectations

Simon Harvey, Head of FX Analysis at Monex Europe, emphasized the positive surprises in U.S. data. Coupled with underwhelming global data, it came as a prominent theme in recent weeks. These factors may align with the Federal Reserve’s messaging of a potential second rate hike in Q4.

While market expectations have largely priced in a 25 basis point interest rate hike by the Fed in July, policymakers’ projections anticipate an additional rate hike before year-end.

Japanese Officials Cautious Amid Dollar’s Upsurge

The dollar briefly reached 145.07 yen in Friday’s Asian trade, marking its highest level in seven months. This level is significant as it was the point at which Japanese authorities intervened last autumn to support their currency.

However, the dollar failed to sustain those gains and ended the day flat at 144.88 yen. Japanese Finance Minister Shunichi Suzuki expressed concerns over the excessive yen weakening, though he stopped short of declaring any decisive measures.

Forex Line Trading: Inflation and Economic Data Influences

Forex chart data released on Friday indicated patterns that core inflation in Tokyo increased in June. It remained above the Bank of Japan’s 2% target for the 13th consecutive month.

Eurozone inflation data also garnered attention, revealing a further decline in headline inflation, albeit with the smallest drop in underlying price changes.

Furthermore, official surveys showcased China’s factory activity declining for the third consecutive month in June. The analysts observed weaknesses in other sectors as well. These developments initially caused the yuan to weaken, with the onshore currency trading at 7.2675 per dollar and the offshore currency at 7.2845 per dollar.

USD/JPY Outlook:

The USD/JPY pair completed a growth wave, reaching 145.03. However, a decline toward 143.93 could materialize, and if this level is breached, it may open the potential for a drop to 143.30. The pair showed as one of the less stable Forex trading examples this week.

The post Forex Chart Patterns: Dollar Strengthens Ahead of PCE Data appeared first on FinanceBrokerage.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.






    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.
    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    A former Republican legislative candidate who traveled to Washington for former President Donald Trump’s ‘Stop the Steal’ rally was arrested Friday and charged with...

    Latest News

    Abbe Lowell, Hunter Biden’s attorney, filed an ethics complaint Friday against Georgia Rep. Marjorie Taylor Green after she displayed censured nude photos of the president’s...

    Stock

    Even as U.S. inflation broadly cools, frozen vegetable prices are hot. The average shelf price for frozen veggies rose by 18% in the past year...

    Latest News

    President Biden has overruled the Pentagon and chosen Adm. Lisa Franchetti to lead the Navy, making her the first woman, if she’s confirmed, to...

    Disclaimer: Oracleofomahasays.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 Oracleofomahasays.com