Weekly Technical Analysis – USDJPY, EURUSD, Dollar index
April 24, 2023 10:28 am
This week the focus of attention will be on the Bank of Japan interest rate decision and the Eurozone flash GDP data as well as on the US Core PCE index. So, the highlight will be how USDJPY, EURUSD and Dollar index may react.
BoJ decision → USDJPY
If Ueda maintains the status quo on all monetary policy measures during his first meeting on Friday, investors will be seeking for clues as to the timing of any potential change. If Ueda suggests a change later in the year, though, the yen could increase against its peers regardless of the numbers. USDJPY is still standing above the short-term simple moving averages (SMAs), enhancing the upside momentum.
Eurozone flash GDP → EURUSD
The economy of the Eurozone came to a standstill at the end of 2022, but it is anticipated that the first three months of 2023 will show some signs of improvement. It is anticipated that the preliminary GDP data that will be released on Friday will show a quarterly gain of 0.2%. EURUSD is showing some improvement surpassing the 1.1000 psychological mark.
US PCE inflation → Dollar index
Since 2022, when it reached a peak of 5.4%, the Fed’s preferred method for measuring prices has shown significant signs of deceleration. But the rate of deterioration has slowed considerably during the past few months. The core PCE price index is anticipated to have decreased somewhat in March to 4.5% y/y. Interest rates are expected to be increased by 25 bps on May 3 by the Federal Reserve, while a higher increase is highly unlikely at this time. Therefore, it may be difficult for the dollar to attract enough buying pressure to push it to the upside. The Dollar index is struggling to jump above the 20-day SMA in the short-term and is showing some negative momentum.
This week the focus of attention will be on the Bank of Japan interest rate decision and the Eurozone flash GDP data as well as on the US Core PCE index. So, the highlight will be how USDJPY, EURUSD and Dollar index may react.
BoJ decision → USDJPY
If Ueda maintains the status quo on all monetary policy measures during his first meeting on Friday, investors will be seeking for clues as to the timing of any potential change. If Ueda suggests a change later in the year, though, the yen could increase against its peers regardless of the numbers. USDJPY is still standing above the short-term simple moving averages (SMAs), enhancing the upside momentum.
Eurozone flash GDP → EURUSD
The economy of the Eurozone came to a standstill at the end of 2022, but it is anticipated that the first three months of 2023 will show some signs of improvement. It is anticipated that the preliminary GDP data that will be released on Friday will show a quarterly gain of 0.2%. EURUSD is showing some improvement surpassing the 1.1000 psychological mark.
US PCE inflation → Dollar index
Since 2022, when it reached a peak of 5.4%, the Fed’s preferred method for measuring prices has shown significant signs of deceleration. But the rate of deterioration has slowed considerably during the past few months. The core PCE price index is anticipated to have decreased somewhat in March to 4.5% y/y. Interest rates are expected to be increased by 25 bps on May 3 by the Federal Reserve, while a higher increase is highly unlikely at this time. Therefore, it may be difficult for the dollar to attract enough buying pressure to push it to the upside. The Dollar index is struggling to jump above the 20-day SMA in the short-term and is showing some negative momentum.
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