Dollar Surges on All Fronts; Traders Await Amazon Stock to Make a Comeback
USDJPY Falling Trend Line | Pullback to 117.50
USDJPY has been moving below a falling trend line connecting its recent highs since the start of the month. Price has recently made a strong move down to the 115.50 area and rebounded for a quick correction.
The Fibonacci retracement tool applied on the latest swing high and low indicates that the 61.8% level lines up with the falling trend line around the 117.50 minor psychological resistance. This is also close to the 100 simple moving average, which has acted as a dynamic inflection point in the past.
A higher pullback could last until the 200 simple moving average, which is around the area of interest at the 119.00 major psychological mark. For now, the shorter-term moving average is below the longer-term moving average, confirming the downtrend.
Much could hinge on the FOMC statement today though, as any hawkish remarks could drive the dollar higher against its forex counterparts. If Yellen decides to drop the “considerable time” wording in her statement, the dollar could be in for extended gains until early next year. On the other hand, dovish remarks could keep the dollar’s rallies subdued, especially if risk-taking picks up towards the end of the year.
GBPJPY Area of Interest | Support Near 38.2% Fibonacci Level
After its recent tumble, GBPJPY looks ready to resume its climb back to its previous highs. The pair found support around the 182.00 major psychological level and made a strong bounce in yesterday’s trading sessions.
Bear in mind though that inflation reports from the UK showed weaker than expected results, as the headline CPI fell from 1.3% to 1.0% while the core CPI dropped from 1.5% to 1.2%, confirming that the BOE can’t afford to hike interest rates just yet.
For today, the jobs report could provide volatility for this pair, as the economy is expected to have added 19.8K jobs during November. This should be enough to bring the jobless rate down from 6.0% to 5.9% for the month, although the focus might be on the average earnings figure. Strong wage growth could keep the pound supported, as this absorption of slack could lead to stronger inflationary pressures down the line
A deeper pullback could still be possible, which might take price down to the 180.00 major psychological support zone. A break below the lowest Fib at the 176.00 levels could mean a longer-term downtrend for this pair, as risk aversion takes hold of forex price action.
AMZN Stock Below $300/Share Level | Nearing Key Support Zone
Amazon stock has been in a continuous selloff these days, with price breaking below the $300/share psychological support level. This could be a sign that further losses are in the cards, as risk aversion has been weighing on US equities these days.
Part of the reason why higher-yielders are falling is the rise in geopolitical tension, spurred by the hostage-taking situation in Australia and the school tragedy in Pakistan. This has led to risk-off flows across financial markets, including US equities.
Amazon stock price action could also hinge on the FOMC statement today, as the Fed is expected to shift to a more hawkish stance. This could include hints of tightening early next year, which would mean more expensive business investment and tighter credit conditions. This could be received negatively by US equities, which might then spark deeper selloffs.
On the other hand, if the Fed sticks to its cautious bias, equities could stage a considerable recovery in expectation of a prolonged period of low interest rates. This would be beneficial for business expansion, as companies increase operations to meet the ongoing surge in demand.