Market Dynamics Are In Favour Of The EUR and JPYMar 7, 2024

It’s going to be an important day for the ECB, when they will announce their latest policy decision. Market and speculators know that ECB is somehow hawkish, so {{1|EURUSD}} has gained some moves ahead of the event, a trend that is also driven by Powell’s comments from yesterday, who said that incoming data will determine when they will start reduction rates. Important here is “will”, and “reducing”. There is not “hike” mentioned, so market is certain that FED will cut sometime this year, thus speculators already positioned themself for USD weakness as US yeilds turned down this week. Also, we have to add a drop of {{3|USDJPY}} to this story, as dollar is being sold and jpy bought on speculation that BoJ is preparing to change the rate policy.  Further weakness on DXY is expected as we are tracking impulse on 1h chart; similar is with USDJPY, but it may find some support 147.00/60 but most likely more weakness is coming after the next fourth wave rally.

dxy elliott wave chart
usdjpy vs us yields


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