News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Mixed
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
GBP/USD
Mixed
USD/JPY
Mixed
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
More View more
Real Time News
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/J0EPMD2Cfi https://t.co/gNiVpWrd1p
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/4zEwS7mFJE
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/nB2f5m56nq
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/Q0yRRpMpPX
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/pSeSiNnmHe
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/iVOEuK40rn
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/ltEO5dpKux
  • WTI crude oil is currently trading up against major resistance via the 2019 and 2020 highs within the confines of a channel; something has to give. Get your market update from @PaulRobinsonFX here: https://t.co/MO9foRjm2y https://t.co/YhBFdvZDEb
  • The Dow Jones and S&P 500 outlook appears bleak in the near term as retail traders increase their upside exposure. At the same time, these indices confirmed bearish technical warning signs. Get your market update from @ddubrovskyFX here:https://t.co/fKCHELbOxo https://t.co/eVDwmFTaIg
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/8B8hqHahm1
Narrowing Fed Interest Rate Forecast to Curb Bullish USD/JPY Outlook

Narrowing Fed Interest Rate Forecast to Curb Bullish USD/JPY Outlook

David Song, Strategist
Narrowing Fed Interest Rate Forecast to Curb Bullish USD/JPY Outlook

Fundamental Forecast for the Japanese Yen: Neutral

USD/JPY stands at risk of facing increased volatility over the coming week as the Federal Open Market Committee (FOMC) is widely expected to deliver a March rate-hike, while the Bank of Japan (BoJ) continues to pursue its Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control.

Narrowing Fed Interest Rate Forecast to Curb Bullish USD/JPY Outlook

Source: CME Group

Even though the U.S. dollar failed to benefit from the 235K expansion in U.S. Non-Farm Payrolls (NFP), Fed Fund Futures are still pricing a greater than 90% probability for a 25bp rate-hike. Indeed, an adjustment in the benchmark interest rate may spark a near-term advance in the greenback as the central bank pledges to implement higher borrowing-costs throughout 2017, but the U.S. dollar may face a knee-jerk reaction as market participants gauge the future pace of the normalization cycle.

With Fed officials scheduled to release their update projections, more of the same may prop up the dollar as the central bank remains confident in achieving the 2% inflation-target over the policy horizon. Nevertheless, the most bearish scenario for the greenback would be a further reduction in the longer-run interest rate forecasts as it undermines the recent uptick in U.S. yields. The central bank may tame expectations for a series of rate-hikes and outline a more shallow path for the fed funds rate as officials persistently warn ‘market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance.’ As a result, the central bank may try to buy time especially as Chair Janet Yellen argues ‘inflation moved up over the past year, mainly because of the diminishing effects of the earlier declines in energy prices and import prices.’

With that said, the BoJ interest rate decision may generate limited market interest as Governor Haruhiko Kuroda notes ‘there is not much likelihood that we will further lower the negative rate,’ and the central bank may continue to endorses a wait-and-see approach for monetary policy as officials monitor the impact of the non-standard measures on the real economy. However, Governor Kuroda and Co. may keep the door open to further embark on the easing-cycle as they struggle to achieve the 2% target for price growth, and the diverging paths may continue to foster a long-term bullish outlook for USD/JPY especially as the BoJ strives to keep the 10-year yield close to zero.

For More In-Depth Updates, Join DailyFX Currency Analyst David Song for Weekly LIVE Analysis & Overview!

Narrowing Fed Interest Rate Forecast to Curb Bullish USD/JPY Outlook

Nevertheless, USD/JPY stands at a similar juncture from earlier this year, with the series of failed attempts to close above 115.10 (50% retracement) raising the risk for a near-term pullback in the exchange rate. In turn, dollar-yen may continue to track the near-term range as the pair remains capped by the Fibonacci overlap around 116.00 (38.2% retracement) to 116.10 (78.6% expansion), with the first downside hurdle coming in around 114.00 (23.6% retracement) to 114.30 (23.6% retracement) followed by 113.10 (78.6% retracement).

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

DISCLOSURES