- Oct 3, 2021
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June-21, 2022, daily currency pairs analysis and forex market forecast, by forex forum.
US Dollar Index Price Analysis: Next on the downside comes 103.41
DXY adds to the negative start of the week and briefly visits the area below the 104.00 support on Tuesday.
Considering the ongoing price action, further correction should not be ruled out in the short-term time frame. That said, another visit to the post-FOMC low at 103.41 (June 16) is expected to remain on the cards in the near term ahead of the interim 55-day SMA at 102.53.
As long as the 4-month line around 101.85 holds the downside, the near-term outlook for the index should remain constructive.
Looking at the longer run, the outlook for the dollar is seen bullish while above the 200-day SMA at 97.67.
EUR/USD extends the buying bias for the second session in a row and climbs to the 1.0580/85 band on Tuesday.
If bulls push harder, then the pair could attempt a move to the minor hurdle at the June 16 high at 1.0601. Beyond this level comes the 55-day SMA at 1.0642 prior to the 4-month line around 1.0700. Spot needs to clear the latter to mitigate the selling pressure and allow for the continuation of the recovery in the short-term horizon.
In the longer run, the pair’s bearish view is expected to prevail as long as it trades below the 200-day SMA at 1.1155.
The Japanese yen plunged on Tuesday to the lowest levels versus the U.S. dollar since October 1998, as the Bank of Japan's ultra-loose monetary policy stance continued to weigh.
The yen dropped 0.9% to a new 24-year low of 136.330 per dollar, extending losses which have already seen it shed more than 18% of its value versus the greenback this year.
The yen's decline was also accelerated by some stop losses broken around the 135.60 levels, according to analysts, who noted New York traders had been absent on Monday, a U.S. public holiday.
USD/JPY clawed back some losses at the end of last week – a week which saw a surprise 50 bps hike from the Swiss National Bank (SNB), an aggressive 75 bps hike from the fed with more to come depending on data, and confusion out of the ECB regarding its anti-fragmentation tool for the bond market.
However, a solid rejection ahead of the 131.35 level set the scene for another advance in USD/JPY, rising above prior levels with ease. Today, the pair has traded above last week’s high of 135.60, fast approaching 136 flat. Nearest resistance now lies at the October 1998 level of 136.89 followed by 139.26 (May 1998). Support appears at 135 flat, 133.20 and 131.35.
The USDCAD is modestly lower today after peaking near the May 2022 high on Friday (highest level since November 2020). The price action today has seen a continuation of the move lower. The pair has moved below the swing high from last Wednesday and the down to a swing area between 1.29700 and 1.29798. Below that sits, the rising 100 hour MA at 1.29606.
The low today has reached 1.2978. The current price is at 1.2990.
The Australian dollar (AUD/USD) gained ground as well, up by 0.2%, boosted by Reserve Bank of Australia Governor Philip Lowe's remarks that additional tightening is needed because rates are still low and inflation is expected to reach 7% by year's end. The New Zealand dollar (NZD/USD) mirrored the Aussie's performance (+0.2% today).
The AUD/USD daily chart formed a double bottom around 0.685 last week, a level reached by the pair in mid-May before rebounding to 0.727.
AUD/USD is now trading at 0.699, up by 1.3% over the past week.
On the other hand, The British Pound is moving gently higher in early trade despite a raft of negatives hanging over GBP. Wednesday’s inflation release is expected to show headline inflation y/y (May) touch 9.1%, a fresh four-decade high, with some market commentators seeing an even higher print.