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Sources say the meeting between U.S. Vice President Vance and the Qatari Prime Minister will cover U.S.-Qatar relations and the situation in Iran, with a focus on the liquefied natural gas market and regional stability.The Canadian government announced it will undertake major reforms to its regulatory system.On May 8th, JPMorgan analysts stated that U.S. gasoline prices "could very well" rise to $5 per gallon as refineries prioritize jet fuel production over other petroleum products. In a report released Friday, the analyst team noted that in Asia, currently the region hardest hit by the energy crisis, the price shock triggered by the Iran war is spreading significantly faster in the refined product markets, such as jet fuel and diesel, than in the crude oil market. If refinery operations continue to be constrained by limited crude oil supply, fuel prices could become "the primary channel for demand destruction." "In this scenario, even with a significant widening of refined product crack spreads, crude oil prices could still stabilize around $100 per barrel. At that point, the next phase of the shock will no longer resemble a traditional crude oil price surge, but rather a refining and end-fuel supply crisis." Currently, jet fuel is the most significantly affected product, prompting refineries to maximize jet fuel production, which typically means reduced diesel production. The ripple effect is also spreading to gasoline production. Analysts say, "This may explain why U.S. gasoline prices have risen to $4.55 per gallon, and why the risk of gasoline prices rising to $5 can no longer be ignored."Irans Tasnim News Agency: Iran will respond if the US attempts to interfere with Iranian vessels.The Islamic Republic of Iran Broadcasting (IRIB) reported that the foreign ministers of Iran and Turkey spoke by phone. Iranian Foreign Minister Araqchi briefed his Turkish counterpart on recent regional developments, particularly the repeated violations of the April 8 ceasefire agreement by the United States. He stated that the insecurity in the Persian Gulf and the region stems from US actions.

The USD/JPY Currency Pair Swings in a 60-Pip Range as Bulls Reclaim 124.00 on a Positive Note

Drake Hampton

Apr 08, 2022 10:07

Tips

  • The USD/JPY is up 1.26 percent this week.

  • The greenback strengthens as investors shrug off geopolitical concerns.

  • Forecast for the USD/JPY Exchange Rate: As bulls, we are leaning upward and are aiming for the YTD high of 125.10.

 

As the Asian Pacific session opens, USD/JPY pair extends its weekly gains on broad US dollar strength. The USD/JPY remains strong at 124.15, after trading in a tight 55-pip range over the last three days as the Eastern Europe conflict between Russia and Ukraine enters its sixth day.

 

Asian market futures continue to trade higher, despite the ongoing Russia-Ukraine confrontation. Contrary to the positive tone of Asian market futures, which point to a stronger open, US equities concluded the afternoon in a divided mood. Investors shrugged aside Russia-Ukraine tensions on Thursday, despite Russian Foreign Minister Sergei Lavrov's complaint that Ukraine's new draft accord submitted to Russia does not meet Russia's demands on Crimea and Donbas. Meanwhile, recent reports indicate that Russia is regrouping soldiers in preparation for another offensive aimed at reclaiming Ukraine's eastern territories, Donetsk and Luhansk.

 

The North American session on Thursday featured Fed speakers, lead by St. Louis Fed President James Bullard, who stated that the Fed is still behind the curve in its efforts to contain inflation. Bullard said that by the second half of the year, he would like to see the Federal Funds Rate (FFR) at 3.5 percent.

 

Later that day, Chicago Fed President Charles Evans indicated that "we (the Fed) will reach neutral by the end of this year or early next."

 

On the Japanese docket, the Current Account for February and Consumer Confidence for March would be the headline economic data releases. On the US front, Wholesale Inventories for February will be released on a monthly basis. 

USD/JPY Forecast: Technical Analysis

The USD/JPY continues bullish, but the average daily range (ADR) has been 55 pips during the last three days. Daily moving averages (DMAs) below the spot price further reinforce the uptrend, and it's worth noting that the 100-DMA at 109.48 is on the verge of crossing over the 200-DMA at 109.60.

 

With that considered, the first resistance level for the USD/JPY would be 124.00. If the latter is breached, the March 29 daily high of 124.30 will be revealed, followed by the year-to-date high of 125.10.


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