Euro stumbles against a resurgent US Dollar and Japanese Yen

Jul 29, 2023

EURUSD : Data from retail traders shows that 54.61% of traders are net buyers with a buy-to-sell ratio of 1.20. The number of net buyers is 9.88% higher than yesterday and 51.84% higher than last week, while the number of net sellers is 22.36% lower than yesterday and 36.83% lower than last week.

We often have a contrarian view to market sentiment, and the data suggests that the EUR/USD price may continue to decline. Net buying activity has increased compared to yesterday and last week, indicating a stronger bearish trend in line with current sentiment and recent changes.

EURJPY : The Bank of Japan's meeting today saw no change in interest rates, but a shift in their Yield Curve Control (YCC) program. The BoJ stated that their ongoing policy is to keep 10-year JGB rates within a fixed range of -0.5% to +0.5%, which is now a 'reference' rather than a 'hard limit'. This has led to higher JGB yields and a stronger Japanese Yen. The combination of a weaker Euro and a stronger Yen has caused the EUR/JPY exchange rate to decrease. The currency pair has broken out of its short-term upward trend channel this week and has once again rejected the support level. It is currently trading at a low of 151.42, which is expected to be retested in the coming days.