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
Mixed
Oil - US Crude
Bearish
Wall Street
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
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.89%, while traders in US 500 are at opposite extremes with 75.00%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/jJf4VBBPOr
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 2.72% Gold: -0.03% Silver: -0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/HD3d67xvtz
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.93% 🇬🇧GBP: 0.57% 🇨🇦CAD: 0.45% 🇪🇺EUR: 0.34% 🇨🇭CHF: -0.10% 🇯🇵JPY: -0.17% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/1d82miYwh3
  • Coming up at half past the hour: my weekly webinar on market #sentiment. Please join me if you can. You can sign up here: https://www.dailyfx.com/webinars/181540619?ref-author=essex&CHID=9&QPID=917711
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: France 40: 1.74% Germany 30: 1.12% FTSE 100: 0.88% Wall Street: 0.77% US 500: 0.69% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/1IbO8jbvOv
  • Russia and other nations are said to prefer a 1-month OPEC+ production cut extension #OOTT
  • Canadian Dollar: USD/CAD Price -Accelerated Bearish Momentum More details in the link: https://www.dailyfx.com/forex/technical/home/analysis/usd-cad/2020/06/02/Canadian-Dollar-USDCAD-Price-Accelerated-Bearish-Momentum-MK.html?CHID=9&QPID=917714 https://t.co/seBugrGVVC
  • RT @Monte_IG: EUR/USD has already breached today's key pivot point, more gains would aid conformist buy breakout strategies in line with it…
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/ACw6v5RYKn
  • 🇬🇧 Mortgage Lending Actual: £0.3B Expected: £1.149B Previous: £4.80B https://www.dailyfx.com/economic-calendar#2020-06-02
USDOLLAR Index Supported, but USD/JPY Diverges after False Breakout

USDOLLAR Index Supported, but USD/JPY Diverges after False Breakout

2015-09-28 11:13:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- EURUSD should be swayed by US and EZ inflation data this week.

- USDJPY triangle false break higher is a warning sign for risk.

- See the September forex seasonality report.

The end of Q3'15 and the beginning of Q4'15 this week will usher in a great deal more event risk as well. Whereas there were only two "high" rated events on the DailyFX economic calendar last week, there are at least seven unique "high" events this week (13 altogether) that are primed to bring volatility to FX markets.

While the Federal Reserve is keeping its ZIRP policy in place, many feel that the labor half of its monetary policy mandate has been met; achieving its inflation target has thus far failed. Similarly, the European Central Bank ackowledged that its policies aren't boosting inflation in the manner they hoped, with the Governing Council revising the central bank's growth and inflation forecasts lower back in early-September.

These overarching themes puts focus on data in the first half of this week. The Fed's preferred gauge of inflation, the PCE Core, will be released today at 12:30 GMT. The German CPI will be released tomorrow, and Euro-Zone CPI figures will be released on Wednesday. These reports are important in context, of course: both the Euro and the US Dollar have strengthened in recent months against their major counterparts (particularly higher yielding or commodity bloc currencies), which are inherently deflationary pressures. Likewise, energy prices have resumed their decline (although we're approaching last year's Q4 slide, which means base effects will wear off).

Even if some or all of the data over the coming days prove to be insufficient as catalysts to nudge either the Fed or the ECB into a more definitive policy stance, they will at least help clarify what is an opaque picture (to wit: as the Fed has stressed transparency, its explanations about policy have become longer and more convoluted).

To this end, we'll be looking for the big tell among FX pairs to come from USDJPY this week. On September 25, USDJPY made an attempt to breakout higher from its triangular consolidation that's formed the past month, but as of this morning, had failed in its attempt and was trading squarely in the middle of the triangle around ¥120.00. Typically, a breakout that fails (one that leaves the consolidation only to return quickly) often sees a reversal deeper within the consolidation, returning to the prior extreme. If this is the case for USDJPY, support near ¥119.30/40 would come into focus immediately before the triangle base at ¥118.20/25. If this happens, equity markets could lose ground rather quickly.

See the above video for technical considerations in EURUSD, USDCAD, AUDUSD, AUDNZD, GBPNZD, and the USDOLLAR Index.

Read more: Major Euro Influences to Come from Within, Less Likely from Abroad

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

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

DISCLOSURES

News & Analysis at your fingertips.