Market Sector Scanner: Key Points to Watch: Fed and BOJ Meetings in Focus This Week

Markets ended the week in a stronger mood, with U.S. and Japanese equities closing higher after the SpaceX IPO started trading on Friday and finished 19% above its opening price. USD/JPY also continued to rise as strong U.S. inflation data supported the dollar, with CPI up 4.2% year over year and PPI up 6.5%. Gold touched yearly lows under pressure from the stronger dollar, while WTI crude fell as hopes grew for a possible Iran-U.S. agreement.

Scan for opportunities on:

• Forex market (major currency pairs)
• Equities
• Commodities (gold)

Forex Market

USD/JPY

Last Week Recap
Continued worries about U.S. inflation, stronger U.S. data, and the possibility of higher U.S. interest rates helped USD/JPY rise last week. The pair tested the highs seen before April’s intervention. Expectations that the Bank of Japan could raise rates at this week’s meeting had little impact on the market.

Technical Picture
USD/JPY closed back above the 10-day moving average, confirming that the uptrend remains in place. The upper Bollinger Band is currently acting as the next area of resistance.

Outlook This Week
With both the Japanese and U.S. central bank meetings scheduled this week, traders should expect high volatility. The downside risk remains important, especially at these elevated levels, but the uptrend should still be respected as long as USD/JPY stays above the 10-day moving average.

GBP/JPY

Last Week Recap
GBP/JPY spent most of last week recovering from the losses that followed the previous week’s strong U.S. employment data. The market also began preparing for this week’s key central bank meetings in the U.S. and the U.K.

Technical Picture
Prices recovered back toward the 10-day moving average, which is now moving sideways. At the same time, the Bollinger Bands are narrowing, suggesting that momentum has weakened and the market is waiting for a new direction.

Outlook This Week
A potentially volatile week lies ahead, with both the Federal Reserve and the Bank of England in focus. However, with no clear trend currently in place, traders may prefer to range trade GBP/JPY until a stronger directional signal appears.

EUR/USD

Last Week Recap
EUR/USD started the week in oversold territory. Despite stronger-than-expected U.S. inflation data, the pair recovered and ended the week slightly higher, supported by the ECB’s decision to raise official interest rates.

Technical Picture
The lower Bollinger Band was tested several times late last week, showing that downside pressure remained. However, the downward-pointing 10-day moving average acted as resistance and limited the rebound.

Outlook This Week
A return toward the 10-day moving average could see EUR/USD trade sideways ahead of the Federal Reserve meeting. The Fed’s decision and guidance may determine the next major move for the pair.

Equities

U.S. Stock Market

Last Week Recap
The Nasdaq spent much of last week waiting for the SpaceX IPO, while the market tested lower levels following higher-than-expected U.S. PPI inflation data. The successful SpaceX IPO helped restore some confidence, allowing the index to move higher toward the end of the week.

Technical Picture
The market touched the lower Bollinger Band several times last week as it traded sideways. By the end of the week, the Nasdaq recovered and moved back toward the 10-day moving average.

Outlook This Week
Technical indicators are still pointing lower, and SpaceX-related trading may remain volatile. Selling pressure could return ahead of the important Federal Reserve meeting, especially as markets continue to price in the possibility of higher U.S. interest rates.

Commodities

Gold

Last Week Recap
Gold tested the $4,000 level at the start of last week, as expectations of higher U.S. interest rates continued to weigh on prices. Buyers finally returned toward the end of the week, helped by lower crude oil prices and some short-term bargain hunting.

Technical Picture
Gold was heavily oversold for most of the week, trading below the lower Bollinger Band. The recovery at the end of the week triggered a Bollinger Band buy signal, but the broader downtrend remains strong, with the 10-day moving average still pointing lower.

Outlook This Week
The downtrend remains in place, so lower prices still appear more likely. However, the Federal Reserve meeting could trigger a large move, especially as traders focus on the monetary policy statement and comments from the new Federal Reserve governor.

Markets could stay active this week as traders prepare for several major central bank decisions. The Fed, RBA, and BOE are likely to leave rates unchanged, while the BOJ is expected to hike. This keeps USD/JPY in focus, especially with the pair still near levels where Japan may become more cautious. SpaceX trading could also drive swings in risk appetite.