USD Weakens, JPY Wavers: A Look at Recent Market Shifts

By Tomasz Wisniewski|

Published: June 09 2023, 06:55 GMT+0

USD Weakens, JPY Wavers: A Look at Recent Market Shifts

The financial landscape on Thursday and Friday was marked by significant shifts, particularly in the USD, JPY, and indices.

Thursday was a day of relative calm, with Japan’s GDP growth of 0.7% standing out, surpassing the expectations of economists. The US also delivered a surprise with the Claims report, which came in at a higher-than-expected 261K.

In the realm of currencies, the USD found itself on shaky ground, with the EURUSD ascending to new weekly peaks. The USDCHF took a sharp dive below the flag’s lower line and the 0.907 support, effectively setting off a sell signal. The AUDUSD is on an upward trajectory, currently grappling with the long-term downtrend line. A breakout here could pave the way for a buying opportunity. The USDCAD is on a steep downward path and is currently probing the lower line of the symmetric triangle pattern. A downward breakout could be a potent sell signal.

The JPY is currently on a weakening trend, with the GBPJPY carving out new mid-term highs. The AUDJPY is also flexing its muscles, taking aim at the upper line of the channel up pattern.

Friday ushered in inflation data from China, with consumer inflation clocking in at 0.2% and producer inflation taking a significant plunge to -4.6%. We’re also on the lookout for job data from Canada, which could potentially catalyze a larger slide in the USDCAD.

On the indices front, the SP500 is coyly brushing against mid-term highs, while the Dow Jones has retreated below the upper line of the triangle formation. A breakout to the upside here could set off a significant, long-term buy signal. European indices are in a slightly less favorable position, but buyers still appear to hold the reins.