The Reserve Bank of New Zealand uses dovish language about its future monetary policy, triggering some fresh selling in the Kiwi.
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The Reserve Bank of New Zealand hiked its Official Cash Rate by 0.25% to 2.50% but used language in its Statement that was seen as dovish ("policy will remain accommodative for some time before normalising"). This sent the New Zealand Dollar a bit lower.
Stock markets are mostly lower over the past day, mostly on fears about the sustainability of the recent extreme rally in AI chip stocks. Despite making a fresh record high earlier yesterday, Dow Jones Industrial Average is falling, while other US indices like the NASDAQ 100 or the S&P 500 are locked in consolidation patterns, with the NASDAQ 100 Index looking most prone to a sudden strong bearish breakdown after closing below its 50-day SMA for two consecutive days.
Crude Oil has risen firmly after the USA attacked Iran militarily last night in retaliation for Iran's breach of the MoU by attacking shipping in the Strait of Hormuz, with WTI trading above $72.50. It looks like a new support level has been established as a stairstep at the recent lows just below $67.50. A major bullish reversal is far from clear, but I am convinced that the US Administration, or at least parts of it, is wildly deluded that there is a chance to make a good deal with Iran which serves US interests. If you believe the Gulf will heat up again in the coming months, you have to believe the price of crude is going to go higher. This might be a good time for a speculative long, but of course soothing words from Trump and Iran could send the price lower again.
Precious metals such as Silver and Gold are firmly within long-term bearish trends, although they are gaining a little in short-term price action. Gold, notably, is still being held by a long-term descending trend line which currently sits at about $4,230. I do not short commodities, but if I did, I would be short of these two precious metals. Central banks are buying, notably in China, but higher yields are putting strong pressure on precious metals.
Bitcoin is falling more strongly and decisively today after making a potential bearish top chart pattern just below $65,000. There is a long-term bearish trend which is encouraging in line with the signal, and I think that now the reversal looks more established,= there is a better case for a speculative short trade from here. If instead the price pushes higher and gets established above $65,000, that would be a bullish sign.
The USD/JPY currency pair has continued to rise for another day to regain almost all the value lost immediately after the Japanese financial establishment intervened to try to prop up the Yen last week. The Japanese Financial establishment is trying to hold back a tide and that is a hard thing for any central bank to achieve. It is easy to weaken your currency but not so easy to strengthen it. One approach for traders might be to wait for intervention to drive the price substantially lower, and then to go long here when the price starts rising - this would have been very successful after the last intervention. Alternatively, trend traders can buy the breakouts and control their risk - it is unlikely that the Yen could rise by more than 3 long-term daily ATRs in a day, or at least, not by much, so don't be too intimidated by these threats if you are using a wide stop loss. I am already long here, like most trend traders.
In the Forex market since today's Tokyo open, the New Zealand Dollar is the weakest major currency after the RBNZ used more dovish language than expected in its Statement a few hours ago. The British Pound has been the strongest major currency, and that strength has been shown for a while.
There will be a release of the minutes of the most recent FOMC meeting, which will be keenly examined on the market for clues about sentiment over potential rate changes.