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Forex: USD/JPY trading negatively at 97.24/26

FXstreet.com (Barcelona) - The USD/JPY has refused to break out of its consolidation Thursday, as the pair seems unable to break in either direction during the palpable buildup to the ECB rate decision later today. Following a grim intraweek run, the cross now trades negatively at 97.24/26, incurring a loss of -0.14% during European trading.

According to the ICN.com analyst team, “Trading below 97.35 keeps the possibility of the intraday downside move today, but breaching 97.35 might trigger a new ascending wave. Moreover, the stochastic and Linear Regression Indicators support extending the bearish move.”

Mataf.net analysts identify means of supportive correction at 96.96, then 96.67, and finally 96.31. On the ascension, a prolonged rise and paring of losses past the 97.62 mark will enable short-term resistances at 97.97, and eventually 98.27.

Forex Flash: ECB expected to cut rate by 25bp today and to suggest more in June – TD Securities

Market focus for today is the ECB interest rate decision, and while TD Securities analysts expect a 25bps refi rate cut, and this seems to have been well telegraphed by Draghi suggesting it was data dependent at last month’s press conference, it is still not a slam dunk decision: “We remain very uncomfortable, given when all is said and done, it will likely mean little for the economy so the ECB is actively looking for other options, which makes handicapping market reactions difficult”, wrote analyst Alvin Pontoh, adding that if the rate cut can improve sentiment, or via reduced LTRO funding costs create incentives to buy peripheral debt, “then we could see a peripheral rally, but core rates risk moving higher if there is no suggestion of a deposit rate cut or more action to come”.
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