USDJPY: fall in the pair will continue
On the eve USD/JPY reached its minimum since August, testing support at 137.50. Investors are moving into safe-haven assets, avoiding buying the dollar as they wait for a slowdown in the pace of monetary tightening from the Fed.
The dollar index has renewed its multi-month lows again, reflecting the release of the minutes of the latest FOMC meeting, which suggested a more modest rate hike than previously planned. After that, the probability of a 50 basis point monetary policy tightening in December has risen to 80%.
Yen buyers are also supported by the deteriorating covid situation in China and the related mass protests of the population dissatisfied with the zero-tolerance COVID policy.
Moreover, today it became known that according to Reuters poll 24 of 26 economists expect the Bank of Japan to switch to a tighter monetary policy. If this scenario comes true, the divergence between the rates of the two regulators will decrease, which will be a negative factor for the dollar.
Based on the fundamental news, indicator readings and chart patterns we believe that the downward movement in USD/JPY will continue and we recommend placing a sell order.
Sell-limit 138.70 take-profit 136.00 stop-loss 139.70
Read more: USD/JPY: chart, forecast for today, currency pair overview
NZDUSD: The pair is approaching the upper boundary of the descending channel
NZDUSD is developing an uptrend and is trading near the level of 0.6200.
The New Zealand dollar was supported by the Statistical Office of New Zealand employment report, although it did not show a strong improvement in the labor market. Construction permits data will be released tomorrow. The figure rose 3.8% last month.
The DXY U.S. Dollar Index is trading just above support at 106,000. Yesterday traders reacted to statements made by some FOMC members who noted the need for further Fed rate hikes until 2024. On these comments the NZD/USD locally decreased.
The Alligator moving average fan is correctly open upwards, the awesome oscillator is in a positive range, but it is building bearish bars.
After the price fixes above 0.6265, we open a long position with Take Profit at 0.6467. Stop-loss is recommended to be set at 0.6200.
If the price fixes below support level 0.6100, this may be a signal to buy. The nearest target for the "bears" is 0.5878. Placement of a stop-loss at 0.6200.