USD/JPY has broken above a descending trendline after consolidating near 149, signaling further upside toward 155.40–156.50, Société Générale’s FX analysts note. 🔗 Read Full Article 💡 DMK Insight USD/JPY’s breakout above the descending trendline is a game changer for traders looking for momentum. With the pair currently at 149, the potential upside toward 155.40–156.50 could attract both retail and institutional buyers. This breakout comes after a period of consolidation, which often sets the stage for significant price movements. Traders should keep an eye on the 150 level as a psychological barrier; a solid close above this could confirm the bullish sentiment. However, it’s worth noting that if the pair fails to maintain momentum, we could see a retracement back to the trendline, which would invalidate the bullish outlook. Monitoring the RSI and MACD indicators can provide additional insights into whether this move has legs. If you’re trading this pair, consider setting alerts around 150 and 155.40 to catch any shifts in momentum. 📮 Takeaway Watch for a close above 150 in USD/JPY to confirm bullish momentum toward 155.40–156.50; monitor RSI and MACD for confirmation.

Spot Gold comes under renewed pressure as China ends the VAT rebate for gold sales, raising costs for both investors and consumers, ING’s commodity experts Ewa Manthey and Warren Patterson note, ING’s commodity experts Ewa Manthey and Warren Patterson note. 🔗 Read Full Article 💡 DMK Insight Gold’s facing fresh headwinds as China pulls the VAT rebate on gold sales, and here’s why that matters right now: This move raises costs for both investors and consumers, potentially dampening demand in one of the world’s largest gold markets. Traders should keep an eye on how this impacts gold prices in the short term, especially if we see a significant drop below key support levels. Historically, changes in China’s gold policy have led to volatility, so expect some price swings. If gold breaks below recent lows, it could trigger further selling pressure, affecting correlated assets like gold miners and ETFs. On the flip side, if demand holds up despite the higher costs, it could indicate underlying strength in the market. Watch for gold prices around critical levels—if it dips below a certain threshold, it might signal a bearish trend. Also, keep an eye on consumer sentiment in China, as that could provide clues on how this policy change is being absorbed by the market. 📮 Takeaway Monitor gold prices closely; a drop below recent support levels could signal increased selling pressure amid rising costs from China’s VAT changes.

Move higher in USD/JPY was a reflection of hawkish Fed cut and disappointment over dovish BOJ hold. USD/JPY last seen at 154.16 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note. 🔗 Read Full Article

Financial markets are getting excited about a Bank of England rate cut potentially as early as this Thursday, ING’s FX analyst Chris Turner notes. 🔗 Read Full Article 💡 DMK Insight A potential Bank of England rate cut could shake up forex markets this week. Traders are buzzing about the possibility of a rate cut as early as Thursday, which could lead to significant volatility in GBP pairs. If the BoE does cut rates, expect a bearish reaction in GBP/USD, especially if it falls below key support levels. This could also impact related assets like UK government bonds, as lower rates typically drive bond prices up. Keep an eye on the market’s reaction to any forward guidance from the BoE, as that could set the tone for GBP trading in the short term. However, there’s a flip side: if the BoE holds rates steady, we might see a sharp rebound in GBP strength, especially if the market has priced in a cut. Traders should monitor the 1.25 level in GBP/USD closely; a break below could trigger further selling pressure. With the market’s focus on this event, volatility is likely to spike, so be prepared for rapid price movements. 📮 Takeaway Watch for the BoE’s decision on Thursday; a rate cut could push GBP/USD below 1.25, while holding rates might trigger a rebound.

Further Euro (EUR) weakness is not ruled out; any decline is unlikely to threaten the major support at 1.1490 today. In the longer run, the next level to watch is at 1.1490, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note. 🔗 Read Full Article 💡 DMK Insight EUR’s potential weakness could be a tactical opportunity for traders, especially with 1.1490 as a key support level. If the Euro dips further, it might test this support, which has held firm recently. A breach could trigger a wave of selling, leading to a more significant downtrend. Traders should keep an eye on broader economic indicators, like Eurozone inflation rates and ECB policy shifts, as these could influence the Euro’s trajectory. Additionally, if the Euro weakens, it might boost related assets like the USD, making it essential to monitor the EUR/USD pair closely. Watch for any significant news or data releases that could impact market sentiment, particularly around the 1.1490 level, as it could dictate short-term trading strategies. Remember, the market’s reaction to these levels often reveals the underlying sentiment, so be prepared for volatility around this support zone. 📮 Takeaway Keep a close watch on the 1.1490 support level for EUR; a breach could signal a significant downtrend and impact related assets like USD.

Risk currencies are not seeing the typical boost one would have expected after the US and China agreed on a one-year trade truce last week. We think there are two factors currently at play keeping the dollar the dominant story, ING’s FX analyst Chris Turner notes. 🔗 Read Full Article 💡 DMK Insight The lack of a risk currency rally post-trade truce signals deeper market concerns. Typically, agreements like the US-China trade truce would lead to a surge in risk assets, but the dollar remains strong, hinting at underlying fears. Traders should consider that the dollar’s dominance is being fueled by factors like persistent inflation and potential Fed rate hikes, which overshadow any optimism from trade agreements. This could lead to a stronger dollar in the short term, affecting pairs like EUR/USD and AUD/USD. Watch for key resistance levels around 1.10 for EUR/USD and 0.65 for AUD/USD; a failure to break these could indicate continued dollar strength. On the flip side, if risk currencies don’t respond positively soon, it might suggest a broader risk-off sentiment among investors. Keep an eye on economic indicators from both the US and China in the coming weeks, as they could shift the narrative significantly. The real story is whether the dollar can maintain its strength against a backdrop of global economic uncertainty. 📮 Takeaway Watch for EUR/USD at 1.10 and AUD/USD at 0.65; failure to break these levels could signal ongoing dollar strength amid risk-off sentiment.

European Central Bank (ECB) Governing Council member and Governor of the National Bank of Slovakia (NBS), Peter Kazimir, said during the European trading session that there is no need to alter or adjust the monetary policy as risks to inflation and the economy remain broadly balanced. 🔗 Read Full Article 💡 DMK Insight Kazimir’s comments signal stability in ECB policy, but here’s why traders should stay alert: While he claims inflation risks are balanced, the market’s reaction could be more volatile than expected. Traders should consider that any unexpected shifts in economic indicators could prompt a sudden policy change. If inflation data or GDP figures deviate from expectations in the coming weeks, we might see a shift in sentiment that could impact the euro and related assets. For now, the euro’s stability hinges on these macroeconomic indicators, so keep an eye on the upcoming inflation reports. A break below key support levels could trigger selling pressure, while a strong inflation print could lead to a bullish euro. Look for the euro to test its recent highs or lows in the next few trading sessions. If it breaks above resistance, we could see a rally, but if it falters, the downside risks could materialize quickly. Watch for the ECB’s next meeting and any hints of future policy adjustments, as that could be a game changer for traders positioned in the forex market. 📮 Takeaway Monitor upcoming inflation reports closely; a deviation could trigger significant moves in the euro and related forex pairs.

EUR/JPY trades lower on Monday, stabilizing around 177.50 at the time of writing, down 0.10% for the day, as Japanese markets were closed on Monday for a national holiday. 🔗 Read Full Article 💡 DMK Insight EUR/JPY’s dip to 177.50 might seem minor, but here’s why it matters: With Japanese markets closed, the lack of trading volume could amplify volatility when they reopen. This pair is often sensitive to shifts in risk sentiment, especially with the ongoing discussions around interest rates in both the Eurozone and Japan. Traders should keep an eye on the broader economic indicators, like inflation data from the Eurozone, which could influence the ECB’s next moves. If the pair breaks below 177.30, it could signal further bearish momentum, while a rebound above 178.00 might attract buyers looking for a short-term rally. But don’t overlook the potential for a quick reversal; the market could react sharply once Japan resumes trading, especially if there are any unexpected economic announcements. Watch for any shifts in sentiment that could push the pair back towards its recent highs. Overall, the next few days could be pivotal for EUR/JPY as traders reassess their positions. 📮 Takeaway Monitor EUR/JPY closely; a break below 177.30 could trigger further selling, while a move above 178.00 may attract buyers.

The Indian Rupee (INR) strives to hold its immediate low around 89.00 against the US Dollar (USD) during afternoon trading hours in India on Monday.  The USD/INR pair struggles to extend its gains, even as the US Dollar Index (DXY) rallies further, suggesting some strength in the Indian currency. 🔗 Read Full Article 💡 DMK Insight The INR’s resilience around 89.00 against the USD is noteworthy, especially with the DXY rallying. This suggests that while the USD is gaining strength, the INR is holding its ground, which could indicate underlying demand or market sentiment favoring the rupee. Traders should consider this dynamic, as a sustained hold above 89.00 could lead to a short-term reversal or consolidation phase. If the INR breaks below this level, it might trigger further selling pressure, especially if the DXY continues its upward trajectory. Keep an eye on the correlation with emerging market currencies; a strong INR could signal a broader risk-on sentiment, impacting assets like Indian equities or commodities. Watch for any economic data releases that could influence this pair, particularly inflation or interest rate announcements from the Reserve Bank of India. 📮 Takeaway Monitor the USD/INR pair closely; a break below 89.00 could signal increased selling pressure, while a hold may indicate strength in the INR.

The US Dollar keeps trading within a narrow range, around 154.00, consolidating gains against a somewhat softer Japanese Yen. 🔗 Read Full Article 💡 DMK Insight The US Dollar’s tight range around 154.00 against the Yen signals a cautious market, and here’s why that matters: With the Dollar consolidating, traders should watch for potential breakouts or reversals. A sustained move above 155.00 could trigger bullish sentiment, while a drop below 153.50 might indicate a bearish shift. This range-bound behavior suggests that traders are waiting for key economic indicators or central bank signals before making significant moves. Additionally, the Yen’s weakness could impact correlated assets like commodities, particularly gold, which often reacts inversely to the Dollar’s strength. Keep an eye on upcoming economic data releases that could provide the catalyst for a breakout. But here’s the flip side: if the Dollar continues to consolidate without a clear direction, it could lead to increased volatility in other markets as traders adjust their positions. So, monitoring the Dollar-Yen pair closely is crucial for anticipating broader market movements. 📮 Takeaway Watch for a breakout above 155.00 or a drop below 153.50 in the Dollar-Yen pair to gauge market direction.