The dollar fell, the yen rose after data on the US economy and the Bank of Japan decision

The dollar fell, the yen rose after data on the US economy and the Bank of Japan decision

The dollar fell on Friday after the release of US GDP, which growth is at a slower pace than expected in the second quarter, further weakened the expectations of the new US Federal Reserve raising rates in September.
At the same time, the Japanese yen strengthened after the Bank of Japan expanded its stimulus measures by the end of the two-day meeting, but disappointed investors who expected a more ambitious action in support of growth and inflation.
The yen jumped by 3.08% to 102.03.
The Bank of Japan expanded its stimulus measures on Friday, doubling the volume of purchases of securities exchange-traded funds (ETF) because of pressure from the government and financial markets, but disappointed investors who were waiting for more decisive action.
However, the central bank said that will conduct a thorough assessment of the impact of negative interest rates and large-scale program of buying assets that can point to a large-scale revision of the incentive measures.

Pound does not register significant changes

The pound against the dollar slightly weaken, trading range of the pair in the past few days has not changed and has remained in the range 1,310-1,330. In July, the price index for housing in the UK, continued growth of in annual basis, decreasing by 5.2%, on monthly basis - by 0.5%. Indicators exceeded expectations, but the pound ignores the statistics. By the end of the week is unlikely to see bigger dynamics of the pair GBP/USD.

All eyes are on the yen

Today will be the meeting of the Bank of Japan, which will take place against the background of fierce speculation not only about what the regulator will announce, but also about whether it will have at least some value.
Uncertainty increases, because it is not clear what will include incentives program announced by Prime Minister Shinzo Abe, and how much is really new costs it implies.
We do not know what will do the Bank of Japan, it may be best to refrain from adjusting existing QQE program and instead to declare change of approach, coupled with fiscal stimulus, and leave the details for later.
This will keep the yen's rise, at least until the next meeting, and the ball will go to Abe's field. Conspiracy theorists are likely to believe that the Bank of Japan and Abe had already agreed on everything, but they want to make it appear as if each acts on his own.

The USD/JPY is likely waiting for sharp moves in either direction before the meeting. Bulls should pay attention to the Ichimoku cloud, which sends a bullish signal, and if the Bank of Japan will take the test for "pigeon" attitude, I am waiting for strong growth over the next sessions of the outside of the cloud.
Even if the pair rushes down, the recent growth has weakened clearly the downward trend, and on the way to 100.00 support is still a lot of levels, starting with 103.50 and then - 102.50/00.

Fed broke the peace of the euro/dollar

The euro/dollar finally revived after the US Federal Reserve meeting. Thursday trade is in the range of 1,105-1,111. Dollar weakens.
Fed after the meeting left interest rates unchanged. With regard to future plans and actions of the system controller's rhetoric was very blurred and streamlined. Federal Open Market Committee members did not say, that they are attended to ease monetary policy in the future, but did not told that the rate will be raised this year. As always, the Fed referred to the achievements of the labor market and inflation. These indicators are main and will influence the Fed's decision in the future.

Free webinar: "ActivTrades Tools - SmartLines & SmartOrder"

On July 28 there will be a very useful free webinar "ActivTrades Tools - SmartLines & SmartOrder".

The professional private trader Paul Wallace will present the tools SmartLines and SmartOrder, developed by ActivTrades.

Time: 7pm-8pm Cost: Free Place: Online

Don't the other interesting and useful webinars, which will be held in August:

August 4: "Transitioning from Demo to Live Trading";

August 11: "Webinar Special: Brazil What's happening?"

For more information and registration, visit here.

The markets took a break in the growth of expectations on stimulus

The recovery rally after Brexit was based on the belief that central banks around the world once again will print out incentives to restore the normal functioning of financial markets. Paradoxically, without the market turmoil, central banks prefer to wait for economic data to weigh the need for incentives.
Slightly discouraged, that central banks are in no hurry to soften even more the policy, but not giving up, the markets have stalled in recent days near the local maximums. The second false start of the markets (the first was before the referendum on Brexit) is broke into the reality: relying solely on past experience, the markets can be wrong.

The pound strengthened on labor market data

In the beginning of the European trade, the euro/dollar sank for one hour by 38 pips to 1.0981. At this time, the pound strengthened against the dollar and the euro on the labor market data in the United Kingdom, which exceeded forecasts.
UK unemployment rate fell from 5.0% to 4.9% in June. The number of applications for unemployment benefits fell from 12.2 thousand to 0.4 thousand. The average wage, including bonusses, increased from 2.0% to 2.3% in May.
Pound/dollar recovered with one figure (100 points), to 1.3197. As soon as pressure on the euro weakened by euro/pound, euro/dollar has won back all the daily losses.