USDJPY pares biggest weekly gains in nine months as markets brace for FOMC, BoJ play

Markets prepare for top-tier central bank events and data early Monday as traders consolidate the previous weekly gains of the US Dollar amid a sluggish start to the key week. That said, the NZDUSD ignores mixed NZ trade data to cheer the greenback’s weakness while the USDJPY also prints the first daily loss, so far, in five days.

Not only the US Dollar but the Treasury bond yields also retreat after an upbeat week whereas stocks in the Asia-Pacific zone grind higher even as China fails to cheer stimulus news. Even so, EURUSD, USDCHF and AUDUSD remain mostly indecisive amid the market’s cautious mood whereas the prices of crude oil retreat from a one-week high. That said, Gold cheers the downbeat US Dollar and the cautious mood to print the first daily gains in four whereas the USDCAD bulls also retreat.

Elsewhere, BTCUSD and ETHUSD fail to benefit from the US Dollar weakness as whales cash out ahead of the key week.

Following are the latest moves of the key assets:

• Brent oil stays defensive near $80.50 after two-day uptrend.
• Gold price prints the first daily gains in four around $1,965 by the press time.
• USD Index struggles to defend four-day uptrend above 101.00 at the latest.
• Wall Street benchmarks closed mixed, mostly down, but stocks in the Asia-Pacific zone edged higher. That said, equities in Europe and UK trade mixed of late.
• BTCUSD and ETHUSD print minor losses around $29,800 and $1,880 as we write.

Sluggish start to the key week

Traders repeat the typical pre-event anxiety on early Monday as policymakers from the Fed, ECB and BoJ flex their muscles. Adding strength to the market’s inaction, as well as the consolidation, could be the mixed PMIs from Australia and Japan, as well as the CFTC data suggesting a record short position of the US Dollar.

It’s worth noting, however, that the last week’s US Dollar rebound also appears elusive as most data, except the interior details of US Retail Sales, came out downbeat. Furthermore, talks that the US central bank has limited scope to stay hawkish for long also challenge the US Dollar bulls.

Elsewhere, crude oil struggles amid doubts about China’s economic transition whereas the Gold price cheers its traditional haven status.

That said, BTCUSD drops amid a sudden short in a multi-year-old inactive account whereas ETHUSD bears the burden of downbeat whale activity and on-chain data.

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

Eurozone, UK and US PMIs may offer intraday directions.

Moving on, the first reading of July PMIs from the EU, UK and US will direct intraday moves of the market. However, major attention will be given to the Fed announcements and the US Q2 GDP. Should the monetary policymakers defend hawkish bias, the US Dollar will extend the previous week’s rebound and weigh on the riskier assets like commodities and Antipodeans.

May the trading luck be with you!