Daily Forex Market Preview, 23/01/2018
The Bank of Japan’s monetary policy meeting held earlier today saw the central bank leaving interest rates and its QQE purchases unchanged. The Japanese yen was seen strengthening on the back of the BoJ’s meeting. Governor Kuroda is expected to hold a press conference in a few hours.
The U.S. dollar was seen giving up its gains despite the Congress approving measures to fund the government for a period of three weeks. This comes after a brief three-day shut down. The economic calendar was sparse yesterday leaving most of the trading to the broader political developments from Washington.
Looking ahead, the UK’s public sector net borrowing data is expected to be released today followed by the ZEW economic sentiments from Germany and the Eurozone. Later in the day, the Richmond manufacturing index data will be released.
USDJPY intra-day analysis
USDJPY (110.80): The USDJPY continues to consolidate near the 110.70 level of support marking a seventh day of prices trading flat near this level. The BoJ’s meeting did not offer much for the markets which is expected to keep the currency pair subdued. Currently, we expect that the resistance level near 111.00 – 110.88 will hold any gains in the short term. This exposes USDJPY to downside risks. Price action could be seen falling to the previous lows near 110.40 region with further declines likely on a downside break out below this level.