A number of important economic data will be published this week, starting with tomorrow’s early morning (5:30 GMT+1) RBA (Australia) decision on interest rates. At the opening of the U.S. session, there will be more data – the ISM Manufacturing PMI in the U.S. and U.S. job vacancies.
On Wednesday, we will learn the latest ADP report from the US. On Thursday, the market will focus on BoEngland’s decision on interest rates and further monetary policy and 1.5 hours later on US unemployment claims and the US ISM Services PMI. Finally, on Friday we will learn the latest NFP report.
Given the Fed’s openness to further rate hikes, strong data should weigh on gold and conversely, in the event of data disappointment, gold could gain. The same will be true for major currencies such as the EUR and GBP.
What’s next for the JPY?
A separate topic is what may happen on the Japanese currency JPY. Here we can expect BoJ intervention at any time. The decision to raise the limit (YCC – yield curve controll) to 1% helped the yen only temporarily and it has already been losing to the USD again since Friday.
Looking at the chart of the USDJPY pair from the purely technical side – two bullish engulfing formations following one after the other usually signal a continuation of the uptrend. However, the increasing verbal interventions of BoJ and Japanese finance ministry officials may be a harbinger of forex intervention to strengthen the yen. In my opinion, the critical level at which a correction may occur is 144.10.
On the other hand, Japan’s ruling party, or more precisely the parliamentarian and member of Japan’s LDP speaking on its behalf, Hiroshige Seko says that the BOJ’s policy change could act as a bucket of cold water on the economy.
We can talk about this week’s events and their possible impact on the quotations of currencies and other financial instruments in live sessions:
LIVE EDUCATION SESSIONS
This WEEK (1-5 August 2023 ) I am pleased to invite you to several online sessions. Below is the schedule of meetings:
The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE . I will talk more about the PA+MACD strategy applied to these currency pairs during the live trading sessions which you can attend from Monday to Friday.
More current analysis on the group : Trade with Dargo