The FOMC meeting minutes for its April 30 policy meeting revealed that the bank is not concerned with inflation risk while it tries to stimulate employment. This seems dovish, and the markets are reacting accordingly.
The USD/JPY fell during the Asian session after the BoJ meeting minutes revealed that the bank thinks it does not need to add any more stimulus measures, apparently having brought inflation and growth back to target.
During the US session, ahead of the FOMC meeting minutes that was due at 2:00PM ET, traders bought the USD/JPY back to overnight highs.
The market seems to have found resistance after the FOMC minutes, but it is still unclear. From a fundamental perspective, the news from both sides “should” pressure the USD/JPY. But with the 2014-low just below, at 100.75, will traders be able to push through this support area?
On the other hand, if traders push USD/JPY above 101.75, the 1H chart will no longer look bearish. Being able to create bullish signals after a bearish fundamental day, USD/JPY wil look bullish at least in the short-term. 103 will be a key level to break a consolidation mode in the higher time-frame (4H, daily)
Gold has been trading in a triangle. Traders were fading xau/usd ahead of the FOMC meeting minutes, but gold found support after the release.
In the short-term it remains directionless, oscillating 1300. When volatility picks up and price breaks out of the triangle, let’s see if it will stay north or south of 1300 to signal direction in the short-term.
Aside from USD-weakness, the FOMC was received well by the S&P500 index. Following the FOMC meeting minutes, the market pushed the index to a new high on the week. The 4H chart shows that the index is still around some common highs, but don’t be surprised if the market retests the 2014 and all-time high just above 1900.
If the index fails to reach 1900, and falls below 1860, we might be stuck in a period of consolidation. However, the bearish outlook should be shelved until a retreat below 1800.
Earlier Today: GBP/USD Signals Bullish Continuation After Positive UK Data
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