- U.S. new home sales down from 519K to 511K vs. 521K forecast
- Pre-FOMC consolidation in play?
Forex price action in the New York trading session wasn’t as exciting as the latest Game of Thrones episode since dollar pairs seem to be waiting for any FOMC plot twists.
Central bank expectations – With three major central bank decisions scheduled for this week, it’s understandable why traders are hesitating to take large positions and would rather read about what analysts are expecting instead.
For economic guru Mohammed El-Erian, the Fed isn’t likely to increase interest rates this week but they might give market watchers hope for a June hike. He maintained that the FOMC is likely to hike at least once this year or possibly twice, given how Fed head Yellen recently acknowledged that the U.S. economy is making progress in reaching its inflation goals.
Meanwhile, traders pared their BOJ easing bets when Abenomics advisor Etsuro Honda admitted that the Japanese central bank needs to dole out more stimulus at some point but they may still sit on their hands this week. He predicted that Governor Kuroda might decide to wait until June while assessing the impact of their negative deposit rates for now.
Major Currency Movers:
JPY – The Japanese yen was on much better footing in the past few hours, with traders scaling back on their short positions.
USD/JPY is still testing support at the 110.00 major psychological mark, EUR/JPY is consolidating around 125.15, AUD/JPY retreated to a low of 85.73, and CAD/JPY is stuck between 87.50 to 87.75.
GBP – The pound continued to gain support from the growing anti-Brexit sentiment, as more U.K. officials agreed that it would be better to stay in the EU.
GBP/USD made more headway past the 1.4450 resistance to a high of 1.4519, GBP/JPY is holding steady around the 161.00 handle, EUR/GBP fell back to its week open price at .7756, and GBP/AUD reached new highs at 1.8798.
Watch Out For:
- Australian and New Zealand banks to reopen after Monday holiday
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!