3 min to read
Both the dollar-yen and cross-yen pairs are encountering resistance at elevated levels
leading to a lack of clear market direction and volatile fluctuations in the dollar exchange rate.
“Both the dollar-yen and cross-yen pairs are encountering resistance at elevated levels, leading to a lack of clear market direction and volatile fluctuations in the dollar exchange rate.”
The London market is currently undergoing a moderate adjustment in its trajectory, indicating a cautious sentiment among traders. Both the dollar-yen and cross-yen pairs are encountering resistance at elevated levels, leading to a lack of clear market direction and volatile fluctuations in the dollar exchange rate. Nevertheless, the recent consensus reached between the US government and the Republican Party on the debt ceiling issue during their weekend discussions has somewhat assuaged market apprehensions. However, the imminent release of highly anticipated US employment statistics on Friday has created an air of uncertainty, leaving traders without concrete clues to guide their strategies. Additionally, subdued trading activity can be attributed to the Spring Bank Holiday in the UK and Memorial Day in the US, resulting in limited market participation.
Within this context, the dollar-yen pair has remained constrained, failing to surpass the previous high of approximately 140.92 set during the early Tokyo session. As a consequence, it experienced a downward push, reaching around 140.20 during the London morning session. Similarly, the cross-yen pairs, including the euro-yen, have displayed weakness, with the euro-yen pair retracing from its earlier peak near 151.07 to approximately 130.24. The euro-dollar pair has reversed its previous gains from the Tokyo session and is now fluctuating around the 1.07 level. Furthermore, the euro is encountering resistance against the pound and other currencies. Notably, the ruling party in Spain faced a significant defeat in the recent regional elections, leading Prime Minister Sanchez to announce a general election on July 23rd. The absence of substantial economic data has contributed to selling pressure on the euro. In Turkey, following President Erdogan’s re-election, the lira has weakened while stocks have experienced an upward trajectory.
At present, the dollar-yen pair is trading within the mid-140 yen range. It initially extended its gains to approximately 140.92 during the early Tokyo session, following the upward momentum of the dollar observed at the end of the previous week. Noteworthy is the positive market response to the consensus reached on the US debt ceiling issue over the weekend. However, the pair retreated below the 140.50 level in the Tokyo market and encountered difficulties in advancing during the London session, briefly softening to around 140.20. European stocks, including those in Germany and France, initially witnessed buying activity but later reversed course and trended lower.
Regarding the euro-dollar pair, it is currently trading within the upper 1.07 range. After commencing around the 1.0710 level in the Tokyo morning session, it briefly climbed to approximately 1.0744 during the final trading hours. However, as the London session unfolded, the momentum reversed, pushing the pair back to the 1.0710 level. Similarly, the euro-yen pair reached its peak near 151.07 during the Tokyo morning session but subsequently faced selling pressure, leading to a decline to around 150.24 in the London session. Despite the scarcity of explicit market indications, the euro is exhibiting some weakness against the pound. It is important to highlight that the announcement of a general election by the Spanish Prime Minister has contributed to heightened caution among market participants.
As for the pound-dollar pair, it is currently trading within the lower 1.23 range. While it briefly reached a high of approximately 1.2372 in the early London session, it retraced to around 1.2335, displaying a fluctuating pattern. The pound-yen pair encountered resistance at higher levels, with the peak around 173.98 observed during the Tokyo morning session, followed by a decline to around 173.02 in the London session. The euro-pound pair experienced a decline from its previous high near 0.8696 to around 0.8677.
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