Bank of Japan’s data release on JPY was disappointing and JPY is trading a bit stronger against all currencies. You may now focus on U.S GDP data release today.

To prepare for the today’s market, read the full market analysis here. 

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The Bank of Japan is in focus this morning as the Japanese central bank was the second bank after the Federal Reserve to release its monetary statement this week. The BOJ disappointed investors, as Mr. Kuroda failed to introduce new easing measures yet again, despite the slew of negative data and the rampant speculation in the past two weeks. The Yen is trading sharply higher today against all of its peers following the hawkish release.

Oil continued lower for another day, and the crucial commodity is now back with the 200-day MA for the first time since April after an 8-day losing streak. Commodity currencies are surprisingly strong this morning as despite the slight dip in WTI Crude today, as precious metals are unchanged following the BOJ-statement. The Aussie is the strongest risk-on currency for now, as the USD is sliding lower compared to most of its peers.

USD/CAD (current price: 1.3150)

The Canadian Dollar is still stuck below the 1.32 resistance before today’s key GDP data. The decline of oil pushed the pair close to the long-standing resistance line, but the favorable global sentiment environment protected the Loonie from a break-out until now. The pair might continue higher next week, especially if the strong rally in global stocks comes to an end following the BOJ announcement, and today’s crucial releases.

Our assessment: USD/CAD is still trading in a broad neutral range, but the 200-day MA just above the current rate at 1.3325. The pair exited a triangle consolidation last week but the 1.32 resistance is still intact.

USD/JPY (current price: 103.50)

The pair is down by 400 pips from its highs from last week already as the Bank of Japan delivered nothing new this morning. USD/JPY is still trading in the declining long-term trend that defined the Yen’s market in the last more than half a year. The cross is trading near the prior swing low of 103.50 today in early trading after bouncing lower off the other crucial support/resistance level at 105.50. Further support is found at 101 currently, with overhead resistance looming near 107.50 as well.

Our assessment: USD/JPY is still in a declining long-term downtrend, and the momentum indicators are back to neutral following the strong two-week rally in late July, which might lead to another down-swing in the coming weeks.

NZD/USD (current price: 0.7215)

The New Zealand Dollar has been relatively strong in recent days after dipping below the crucial 0.70 level last week. The Kiwi bounced off multiple times from the 0.7125 resistance this week, and it has lost ground today in early trading following the Yen’s jump.  The ANZ New Zealand Business Confidence Index also dropped to 16 from the previous reading of 20.2 and that also pushed the risk-on currency lower. The zone around 0.70 might remain in focus in the coming sessions, especially if the BOJ disappointment leads to a correction in global stock markets.

Our assessment: The pair is still looking slightly bullish on as the 0.6960 line continues to hold, but prior high near 0.7325 seems distant despite the risk-rally of the past few weeks.

Gold (current price: $1342.00) and Silver (current price: $20.27)

Precious metals had two bullish sessions in a row, although the BOJ announcement today hurt the value of the safe haven assets, as monetary tightening is considered a negative both for gold and silver. Gold rebounded off the $1350 level this morning following the hawkish statement. The long-term trend remains bullish for the metals, as they are both trading near their recent highs, with gold being only around 2% off the $1375 zone.

Our assessment: Gold stayed well above the key 1300 level during the recent correction and that might lead to a renewed advance, especially if the metal manages to break out above the Brexit-highs in the coming days.

Economic Releases

Financial markets will end the week with a very busy schedule regarding economic releases before the end of July. German Retail Sales will come out early on this morning together with the Spanish and theEurozone GDP prints, and the Eurozone Core CPI. The afternoon session will be highlighted by the U.S. GDP growth data, but the Canadian GDP will also be released today in late trading. Investors will likely focus on the results of the European Banking Stress Test which will be published sometime this evening.