25.07.2023: Commodity currencies advance amid news from China. USDX, USD/JPY, AUD/USD, NZD/USD

Описание: After the massive cash injection by Chinese banks, the greenback declined slightly. On early Tuesday, it was trading near 101.2. However, it snapped its 5-day winning streak not only because of China’s banks’ actions.

A fall in the US dollar could have also occurred because of profit-taking. Yet, its downward movement is likely to remain limited. Moreover, investors are cautious now in anticipation of the rate decisions by the Fed, ECB, and BoJ. Yesterday, the US unveiled fresh reports which turned out to be rather mixed.

The Services PMI Index contracted, while the Manufacturing PMI Index rose. Moreover, its increase to 49% exceeded the previous figure as well as the forecast reading of 46.4%. However, the private sector growth slowed to a 5-month low in July amid weakening services activity.

This led to new speculations about the Fed’s rate decision, which was negative for the US dollar. As a result, it dipped across the board. At the end of the Asian session, the greenback was moving in a bearish channel of 101.1–101.4.

As many expect the Bank of Japan to maintain its ultra-loose monetary policy this week, the rate gap with other regulators could widen. It will inevitably lead to the depreciation of the yen again.
Against the backdrop of a weak dollar, the Japanese currency was moving in the price corridor of 141.2– 141.6. In Asian trade, the greenback faced strong bearish pressure due to increased risk appetite. Therefore, the pair continued to retreat from its 2-week high to 141.3.
Nevertheless, a further decline is limited by the 2-month horizontal support level of 141.0. A high of 141.9 and a technical line near 142.05 may challenge the recovery of the dollar/yen pair.
A moderate decline in the US dollar, China's commitment to supporting its weakening economy, as well as a jump in oil prices helped commodity currencies grow. The Australian dollar climbed to 0.6775. On early Tuesday, it continued to maintain a strong bullish bias, moving in the range of 0.6725–0.6781.

While traders are unwilling to open new positions, the Aussie will remain in demand. However, its trajectory will mainly depend on the US dollar’s trajectory after the Fed’s rate decision.

Apart from that, investors are also looking forward to Jerome Powell’s speech. These factors will definitely impact the short-term dynamics of the AUD/USD pair.

The New Zealand dollar has been trading in the green zone for the second session in a row. Today, it is likely to grow in the range of 0.6190–0.6223. However, recession risks in the country may limit its upside potential.

In addition, investors are awaiting the Fed’s decision. Therefore, the kiwi/dollar pair traded rather volatile near 0.6200 because of the US dollar’s weakness.


00:00 Intro
00:24 China
01:27 USDX
02:52 USD/JPY
03:54 AUD/USD
04:45 NZD/USD

https://www.instaforex.com

FX Analytics - https://www.instaforex.com/forex_anal...
Forex Calendar - https://www.instaforex.com/forex_cale...
Forex TV from InstaForex - https://www.instaforex.com/instaforex_tv

Forex charts - https://www.instaforex.com/charts
Instant account opening - https://www.instaforex.com/fast_open_...
Forex Trading Contests - https://www.instaforex.com/forex_cont...

List of official InstaForex blogs:
  / instaforex  
  / instaforex  
  / instaforex  

#forex_news # asian_session #instaforex_tv