Bank of Japan's hawkish turn boosts yen, U.S. dollar index technology rebounds

Early Friday, the market gained a positive lead from Wall Street, driven by news that Nvidia will invest $5 billion in Intel to jointly develop AI infrastructure and PC chips.

In addition, Thursday's optimistic U.S. data eased concerns about the economic outlook and increased market risk appetite.

Thursday data showed that the number of initial unemployment claims fell by 33,000 in the week ending September 13 to 231,000, partially reversing the previous week's surge to its highest level since October 2021.

The Philadelphia Fed Manufacturing Index soared to 23.2 in September, a sharp jump from the expected rebound of 2.3.

Traders also cheered for the resurgence of Sino-US trade optimism after U.S. President Donald Trump pointed out on a call on Friday that he could extend a trade truce with Chinese President Xi Jinping.

Basic Forex Market Market:

These fundamental drivers helped the US dollar (USD) maintain recovery, driven by the Fed's cautious interest rate cut on Wednesday. As of this writing, the U.S. dollar index rose slightly, trading around 97.50.

However, by far, the best performance of the G10 currencies is still the Japanese yen (JPY), thanks to the hawkish interest rate of the Bank of Japan (BoJ). Bank of Japan board members stabilized the policy rate at 0.5% with a 7-2 vote and announced the sale of exchange-traded funds (ETFs).

Two hawkish objections boosted the yen (JPY), weighing the US dollar/JPY pair, which is currently trading at 14Around 7.50, waiting for the press conference of Bank of Japan Governor Kazuo Ueda.

GBP/USD fell to 1.3500, continuing the correction of the two-month high of 1.3726 that hit earlier this week. The UK's August Retal sales figures, which were higher than expected, failed to incentivize pound buyers.

As the dollar is generally stronger, the euro/dollar will fall below 1.1800 and pay attention to the speeches of many European Central Bank (ECB) policy makers.

The US dollar/Canadian dollar will maintain the range at around 1.3800, hovering between the strengthening of the US dollar and the decline in oil prices.

Bulle market fundamentals:

Gold is trying to rebound from a three-day low to test the quote above $3,650.

Analysis of major currency trends:

Euro: The intraday deviation of the euro/dollar is currently neutral. As long as the 1.1741 resistance level turns to support, further rise will still be favorable. Above 1.1917, it will resume a larger upward trend to the 1.2 psychological level. However, a firm breakthrough of 1.1741 should confirm a short-term peak and turn the bias back downward to reach the 1.1573 support level.

GBP: GBP/USD accelerated its decline from 1.3725 today, and its focus is on the 55-day moving average (currently 1.3488). Continuous breakthroughs will indicate that the rebound from 1.3140 has been ehadb.cnpleted as the second paragraph of the correction pattern from the 1.3787 high. The third round has begun. Then you should first see a deeper decline, reaching the 1.3332 support level. The next breakthrough target is 1.3140. On the upside, breaking through 1.3725 will retest the 1.3787 high.

Yen: The intraday bias of the US dollar/yen is currently neutral. On the plus side, breaking through the 149.12 resistance level will indicate that the pullback from 150.90 has been ehadb.cnpleted and the rise from 139.87 is still in progress. There should be a further upward trend and then retest 150.90. On the downside, falling below 145.47 will resume falling to 142.66 support.

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