The risk-friendly rallies were dented during the Asian session, as traders worried about Hong Kong’s bills and their impact on U.S.-China relations.
Check out the headlines that dominated today’s Asian trading!
Currency Snapshot
Fresh Market Headlines & Economic Data:
- Significant stimulus needed to rebuild economy, Poloz says
- Bank of Canada says it can deliver more monetary stimulus if needed
- U.S. weighs sanctions on Chinese officials, firms over Hong Kong
- RBNZ: financial system is in a “solid” position
- RBNZ warns banks’ ability to absorb shocks ‘is not unlimited’
- Australia’s construction fell again in March quarter
- China’s industrial firms’ profits fall in April but at slower pace
- Japan to boost this year’s bond issuance to nearly $2T
- Dollar gains, yuan slumps on rising Hong Kong tensions
Upcoming Potential Catalysts on the Economic Calendar:
- ECB President Christine Lagarde to give a speech at 7:30 am GMT
- Credit Suisse economic expectation at 8:00 am GMT
- U.S. Richmond manufacturing index at 2:00 pm GMT
What to Watch: GBP/JPY
London session is light on economic data today, but that doesn’t mean we won’t see significant price movements.
GBP/JPY, in particular, has fallen off its weekly highs and it looks ready for some retracement.The 132.50 handle is a level to watch as lines up with a 38.2% Fib retracement on the 1-hour chart.
If London session forex traders follow through with the risk aversion theme, or if they focus on the U.K.’s weak economic and post-Brexit prospects, then we could see GBP/JPY retest Fib retracement levels or even the broken channel resistance.
If pound bulls or yen bears switch back to risk-taking, however, then Guppy could retest its 133.00, 133.50, or 135.00 previous resistance areas.
Not sure where to place your orders or price targets? MarketMilk’s GBP/JPY volatility charts should sort you out!