Dollar higher, sterling and NZD firm ahead of Central Bank Meetings
Dollar followed US stocks and yields higher overnight but it's losing momentum in Asian session. Euro has a big loss yesterday and reach 1.0863 even Gbp has been affected and reach 1.2902 as a low , Dollar index staged a solid rebound and is back above 99, comparing to last week's low at 98.54. But it will take a break of 99.46 resistance in the Dollar index to confirm near term reversal. In other markets, Gold dipped to as low as 1214 yesterday and is staying soft at around 1223. WTI crude oil's rebound from 43.76 lost steam after failing to take out 47.01 near term resistance.
USD/JPY Daily Outlook
USD/JPY's rally accelerates to as high as 114.32 so far yesterday. The development is in line with our view that correction from 118.65 has completed with three waves down to 108.12. Intraday bias remains on the upside for 115.49 resistance next. Firm break there will now resume larger rally from 98.97 to 125.85 high. On the downside, below 113.04 minor support will turn bias neutral and bring consolidations before staging another rally.
In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. It's uncertain whether it's completed yet. But in case of another fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77 to bring rebound. Meanwhile, break of 115.49 resistance will extend the rise from 98.97 to retest 125.85. Overall, rise from 75.56 is still expected to resume later after the correction from 125.85 completes.
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