USD/JPY Weakness Pre-FOMC Foreboding for USD-pairs
- USD/JPY technical weakness continues to develop.
- GBP/JPY faces trendline dating back to October 2013.
- Read why a Fed rate hike this week is unlikely to help the US Dollar and see how it fits with the December seasonality forecasts.
The Federal Reserve is set to meet on Wednesday and raise rates for the first time since June 2006. But with the decision already priced into the US Dollar, traders have already started to look through to 2016 for what the Fed will do next. Ahead of the meeting, there have been some alarming technical developments in USD/JPY, which recently reentered its range from late-Q2/early-Q3 as its daily momentum profile (via Slow Stochastics and MACD) has become full-fledged bearish.With several other JPY-crosses sitting on the precipice, traders should be alarmed by potentially both US Dollar and US equity market weakness in tandem.
Lastly, as we approach the holidays and thus less liquid markets through the end of the year, it's worth reviewing principles that help protect your capital. We call these principles the "Traits of Successful Traders."
--- Written by Christopher Vecchio, Currency Strategist
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