- USD weakens widely on Monday but strengthens against the JPY
- BOE could increase interest rates this week
- Fed not expected to announce rate increase
A brief look at the major currency pairs in the forex market shows that the best performer was the CHF, while the JPY ended at its weakest.
In the New York session, the USD traded lower right from the start. This was counterbalanced by the fact that nearly all of the other major currencies were also weak yesterday. The only currency that actually weakened against the USD was the JPY.
The Bank of Japan (BOJ) will end its two-day meeting, with some reports saying it might consider slowing down some of the measures it took to stimulate the economy. The USD/JPY traded in a narrow 28-pip range yesterday, possibly waiting for guidance from the Bank of Japan.
In the Eurozone, the USD/CHF had a bad day, dropping below the 0.9901 trend line. The next downward target is 0.9857, which should act as a resistance level.
The EUR/USD broke through the 100 and 200 moving averages at 1.16796 and 1.16766 respectively during the morning session in London. In the New York session, the rate remained above those levels, however, moving higher. For now, the buyers are still running the show.
On Thursday, the Bank of England (BOE) is expected to increase rates. The American Fed is not expected to follow its example just yet, with experts believing a raise is more likely in September. The GBP/USD moved higher yesterday, breaking through the 200-hour moving average at 1.31076 but failing to reach the 100-hour moving average at 1.31377.
Important events this week include the end of the BOJ meeting today, the Fed meeting tomorrow, and news from the Bank of England on Thursday. The week will end with US employment data on Friday.
Apple’s earnings report should also help to bring some direction to the market.
