Japanese yen slipped as the BoJ cut inflation forecasts. Meanwhile, the euro plunged versus all majors ahead of the ECB policy meeting while AUD/USD topped at 0.7988, a two-year high before the strong sell-off followed. Trump is trying to find a new healthcare plan and steps forward for tax reform.
Japanese Yen Slipped as BoJ Cut Inflation Outlook; No Tapering Hints
The Japanese yen slipped against most of the majors during the Asian session as the Bank of Japan cut inflation forecasts. The central bank kept the monetary policy unchanged but cut its inflation forecasts for fiscal years 2017/2018 and 2018/2019, disappointing the yen. They didn’t mention anything for tapering but they stated that "Risks to the economy and price outlook are skewed to the downside". The speech of Bank of Japan Haruhiko Kuroda very early in the morning may reveal more details for bank’s plans for the massive stimulus, which they will probably keep far longer than other major banks.
Euro Plunged Ahead of ECB Meeting
The euro dived against all the G10 currencies on Wednesday and early Thursday, ahead of the European Central Bank policy meeting. The market expects the central bank to keep the main rates on hold at 0% and -0.4% respectively. However, traders will pay attention to the ECB policy statement and press conference from ECB President Mario Draghi. During the last month’s policy meeting, Draghi had a hawkish tone during his press conference and his comments sent the EUR/USD at a seven-month high. Since then, the pair benefited from the soft dollar and soared to new record highs.
Trump Called for Late-Night Meeting to Agree on Health Plan But Failed
The U.S. dollar has been traded mixed against the majors while all investors are keeping an eye on the U.S. President Trump’s administration. After the defeat of his health care plan, he called a meeting with Republicans, late in the night yesterday, to agree on a new health plan that will repeal Obamacare, though they didn’t manage to reach a deal. A new report showed that if they repeal Obamacare without a replacement law, 32 million Americans would lose their health insurance. Moreover, U.S. House of Representatives which is led by Republican party made the first move towards tax reform legislation, by approving a fiscal 2018 budget.
EUR/USD – Technical Outlook
During yesterday’s trading period, the EUR/USD pair traded slightly lower from the 14-month high at 1.1580 and failed to surpass it. The day ended in red and if there is a further bearish movement will create a negative week. The pair is ready to hit the next immediate support barrier at 1.1490 while if the price slips below it will meet the 50-SMA on the 4-hour chart, near 1.1460. On the other side, there is a case to rebound on 1.1490 and continues rising.
On the daily and 4-hour timeframes, the indicators are signalling...
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