USDJPY looks set to refresh yearly top amid sluggish start to crucial week

Markets remain dicey on early Monday, after witnessing a volatile week that recalled the US Dollar bulls but also favored equities and yields. That said, the hopes of hawkish Fed performance in July gain acceptance and keep the USD on the front foot even as the last week’s downbeat performance of the US Core PCE Price Index, the Fed’s favorite inflation figure, joins easy spending to prod the Fed hawks.

Elsewhere, expectations that the US-China dialogue will be able to deliver sweet fruits joined the broadly firmer greenback and downbeat signals for the BoJ to propel the USDJPY pair. Further, EURUSD and GBPUSD fades the previous day’s corrective bounce whereas AUDUSD remains pressured but the NZDUSD bucks the trend amid upbeat New Zealand housing data.

Additionally, prices of Gold and Crude Oil remain mildly offered as traders await the key US PMIs and job numbers, not to forget the Fed minutes, while poking short-term key support.

On a different page, cryptocurrencies stick to minor gains as investors remain hopeful of more fund inflow while paying little heed to the looming regulatory fears.

Following are the latest moves of the key assets:

• Brent oil struggles to defend $75.00 after three-day uptrend.
• Gold price grinds lower but $1,900 is the key support to watch.
• USD Index reverses the previous day’s losses, up 0.30% intraday near 103.30 at the latest.
• Wall Street closed within positive territory so did Asia-Pacific shares while equities in Europe and UK are mildly bid of late.
• BTCUSD and ETHUSD print minor gains to around $30,700 and $1,970 by the press time.

Slow start to another important week

Having witnessed a volatile week comprising multiple central bankers’ speeches and top-tier US data, traders brace for another dossier of US statistics including the all-important Nonfarm Payrolls (NFP) and ISM PMIs, not to forget the Fed Minutes.

It’s worth noting, however, that the hopes of improving China-US ties joined hopers of more rate hikes from the Fed and upbeat yields to underpin the US Dollar despite mixed sentiment. The same weighed on prices of commodities and Antipodeans but NZDUSD bucks the trend while USDJPY braces for a fresh 2023 peak. That said, Japan's data underpin easing inflation woes and softer manufacturing, which in turn suggests the need for the BoJ”s easy monetary policy to run for a little longer.

On a different page, ETHUSD rises to a fresh high in three months whereas BTCUSD seesaws around a choppy range near yearly peak, with minor gains.

• Strong buy: USDCAD
• Strong sell: ETHUSD, GBPUSD, Gold
• Buy: USD Index, Nasdaq, USDJPY
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

US PMIs are the key

After witnessing a sluggish start to the day, US ISM Manufacturing PMI for June will be crucial to watch for clear intraday directions. Should the activity numbers arrive as upbeat, the hawkish Fed bets gain support, which in turn will join the mixed sentiment to bolster the US Dollar and weigh on the prices of other riskier assets.

May the trading luck be with you!