We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • $AUDJPY technical positioning hints prices may be on cusp of turning lower after a late-2019 bounce, recoupling with a dovish RBA policy outlook. Get your market update from @IlyaSpivak here: https://t.co/z84Y0V0ZtH https://t.co/wcIGO1emDw
  • The Japanese Yen has faded into 2020 as market risk appetite has held up and hit demand for haven assets. $USDJPY now challenges a key medium-term downtrend, but hasn’t topped it yet.Get your market update from @DavidCottleFX here:https://t.co/4X6vgCgkB7 https://t.co/FfCkGhtHsm
  • The $USD may fall against the Swedish Krona and Norwegian Krone if commentary from officials at the Davos forum uplift market mood and pressure haven-linked currencies. Get your market update from @ZabelinDimitri here:https://t.co/SZAG0yMu3d https://t.co/cBZj5tC0Ny
  • The $NZD is inching toward support guiding gains in the fourth quarter of 2019. A break may set the stage for long-term bearish trend resumption. Get your market update from @IlyaSpivak here:https://t.co/bnlx4RJ8oV https://t.co/d60YziMYnO
  • $Gld prices are poised to mark the highest weekly-close in nearly seven-years, but the bulls aren’t in the clear yet. Here are the XAU/USD levels that matter next week. Get your $XAUUSD technical analysis from @MBForex here: https://t.co/yeTH6HwncQ https://t.co/6sIpxTSNaX
  • Video https://t.co/PZeqhLumSR
  • The $USD rose as the Singapore Dollar, Malaysian Ringgit and Philippine Peso fell on coronavirus fears. What is the technical outlook for USD/IDR, USD/SGD, USD/MYR and USD/PHP? Find out from @ddubrovskyFX here: https://t.co/G3GmyOe4IT https://t.co/iq7ajeP6iv
  • RT @ddubrovskyFX: The Indian Rupee 2020 outlook is bearish as India faces stagflation risk amid rising onion and crude oil prices. USD/INR…
  • Bloomberg just reported that Australia confirmed its first #coronavirus case
  • Monday open volatility? https://t.co/0ElZtSfHsz
FX Week Ahead – Top 5 Events: July Fed Meeting & USD/JPY Rate Forecast

FX Week Ahead – Top 5 Events: July Fed Meeting & USD/JPY Rate Forecast

Share:

US DOLLAR HIGHLIGHTED BY JULY FED MEETING

  • The July Fed Meeting is anticipated to reveal the central bank’s first interest rate cut since December 2008
  • The US Dollar will likely react sharply to the upcoming FOMC rate review judging by volatile rate cut bets
  • Spot USD/JPY could be set to carve a path higher if the Fed fails to capitulate to lofty rate cut bets or provides relatively hawkish guidance

Persistent uncertainty surrounding the US-China trade war, mixed US economic data and ambiguous Fed-speak have all provoked significant volatility in Fed rate cut bets and consequently the US Dollar. Forex traders could be provided clarity on Wednesday, however, with the Federal Reserve slated to publish its latest monetary policy statement at 18:00 GMT.

While rate traders have priced the probability of a rate cut as a near-certainty according to overnight swaps, speculation over the size of the anticipated rate cut will likely linger into the FOMC’s interest rate decision.

The sharp improvement in US economic data over recent weeks has seen little impact on lofty rate cutbets – driven largely by slowing global GDP growth and ongoing trade policy uncertainty – which could position the US Dollar for major upside if the Fed refuses to capitulate.

Pairs to Watch: DXY Index, EURUSD, USDJPY, Gold

SPOT USDJPY TECHNICAL ANALYSIS: DAILY PRICE CHART (JULY 2018 TO JULY 2019)

USDJPY Price Chart Technical Analysis

Spot USDJPY has proven resilient in recent days, carving a path higher through several key resistance levels while breaking the downtrend from the April high. Momentum indicators have started to turn the corner: daily MACD is pushing higher, on the verge of a move into bullish territory above the signal line; and Slow Stochastics have continued their gains towards overbought territory (often a sign of a strong market).

Yet, there is still work to be done before a true bottoming call can be made. The break of the downtrend from the April high is a good start; but clearing out the May swing low and July swing high area near 108.96/109.02 would be better. In doing so, USDJPY would have established a series of higher highs and lower lows in context of price action since the start of June.

Seeing as how Fed rate cut odds have been the driving factor behind moves in US Treasury yields – and according to the Bank of International Settlements (BIS), two-year yield differentials matter most to FX markets – we expect USDJPY price action around the Fed meeting on Wednesday to closely mirror that of the bond market.

IG CLIENT SENTIMENT INDEX: USDJPY DAILY PRICE CHART (JANUARY 28, 2019 TO JULY 26, 2019)

USDJPY Client Sentiment Chart

Spot USDJPY retail trader data shows 59.3% of traders are net-long with the ratio of traders long to short at 1.46 to 1. In fact, traders have remained net-long since May 03 when spot USDJPY traded near 111.913; price has moved 2.9% lower since then. The number of traders net-long is 5.0% lower than yesterday and 16.0% lower from last week, while the number of traders net-short is 5.8% higher than yesterday and 13.7% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDJPY prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current USDJPY price trend may soon reverse higher despite the fact traders remain net-long.

FOREX TRADING RESOURCES

  • Download the Q3 DailyFX Forecasts for comprehensive fundamental and technical analysis on major currencies like the US Dollar and Euro in addition to equities, gold and oil
  • Sign up for Live Webinar Coverage of the financial markets hosted by DailyFX analysts where you can have all your trading questions answered in real time
  • Find out how IG Client Sentiment data can be used to identify potential forex trading opportunities

-- Written by Christopher Vecchio, CFA, Senior Currency Strategist & Rich Dvorak, Junior Analyst

Connect with @CVecchioFX and @RichDvorakFX on Twitter for real-time market insight

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.