Live REACTION to the BOC news and Surprise HIKE!🚨

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EURJPY long signal this morning! Nice pop so far. 🏆

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CADJPY is now at a buy rating on the EdgeFinder at +4. This is a mild bullish signal as we near the end of the week. This score will likely change starting next week however, as the BOC remains more hawkish than the yen's BOJ. The uptick in CAD inflation caused some concerns in the overall currency strength, so the central bank acted accordingly.

The two countries have similar GDP growth, but it's also important to look at monetary policy. Canada has been stringent against the concerningly high inflation levels. As a result, those levels are falling, unlike in Japan. Japan's GDP is on the rise due to ultra-low interest rates, but so is their CPI. On the other hand, CAD is seeing an overall decline in CPI while experiencing economic expansion.

Despite EF readings, this pair is hovering on a strong support level on the 1D timeframe. EURAUD is hovering at a mild sell rating at -4, however, we might see a shift in sentiment. Weighing down the score is trend readings and 10-year average seasonality. A bounce from this trend line would indicate a possible uptrend in the works and could shift the score back to a neutral rating.

However, a break below this trend line would suggest a stronger downtrend in the works. Yesterday's candle closed with buying pressure as the market wasn't quite ready to dump this pair. What investors might be looking at now is monetary sentiment from AUD and EUR. AUD just had their rate hiked by 25 bp and stated that another hike is very possible somewhere down the road.

We can keep this in mind for the remainder of this month and July as analysts are looking to see a pause. Now we have news on the ECB coming out next week in which could result in another rate hike. If their bank decides to hike, we could be looking at hard upside. If they decide to pause, this pair will probably move to lower levels.

If we put AUD and CAD against each other, the EdgeFinder will prefer the CAD. Although both currencies saw a surprise rate hike, CAD looks to be in a better economic condition overall. This is due to the fact that GDP is rising at a quicker rate as well as experiencing much lower inflation than its Australian counterpart.

Retail is pretty much mixed as well as COT. According to short term interest rate forecasts, CAD is likely to stay at higher rates for longer, thus making it the more hawkish of the two. We also saw an increase in the number of long contracts for the Canadian dollar whereas the Aussie reported more mixed numbers from both bulls and bears.

Holding tight to EURJPY 🫡
- Nick

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Institutional sentiment is less mixed as they could be showing a shift. EUR became less bullish, AUD saw a slight increase in net longs, CAD saw a major increase in bullish favor, and gold looks increasingly bullish. A large increase for the Canadian dollar should be considered into the AUDCAD analysis as well. CAD looks favored overall by smart money.

LONG S&P500 💥

ANALYSIS:
- S&P officially in a bull market, possible fed pivot
- Cooling inflation numbers
- Solid technical break out, now retesting support

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This week will be very divisive for the future of USD, JPY, EUR. The central banks pertaining to these currencies are going to shape the path going forward. One thing is for sure, the markets will be volatile, and there are a handful of factors to consider as we start this week off.

This pair has been up among the top buys on the EdgeFinder for months now. The trend clearly reflects that, and retail is poised to attempt a downside play that has simply not come yet. The crowd is now over 80% while COT tells a different story. The yen saw another decline in the number of long positions going into this week.

This Thursday, the BOJ will announce a pivotal decision regarding the strength of the yen. Forecasts say the bank will keep rates unchanged at below 0%. Because of their history of keeping an ultra dovish policy, that might continue regardless of the rising inflation in Japan.

S&P500 Trade is rocketing 🚀

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