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
  • The $GBP may be on the cusp resuming a 12-year downtrend against the US Dollar as signs of topping emerge at pivotal chart resistance. Get oyur market update from @IlyaSpivak here:https://t.co/9rM3OjWmBA https://t.co/sUWcSFruHw
  • The $NZD may be on average at risk to further losses against its major counterparts such as the US Dollar and Japanese Yen. Where to for NZD/USD and NZD/JPY from here? Find out from @ddubrovskyFX here:https://t.co/OFjePKYdCb https://t.co/eo1c6QAVd8
  • $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…
Speculation for Above-Neutral Fed Rate to Curb USD/JPY Weakness

Speculation for Above-Neutral Fed Rate to Curb USD/JPY Weakness

2018-10-12 20:38:00
David Song, Currency Strategist
Share:
Speculation for Above-Neutral Fed Rate to Curb USD/JPY Weakness

Fundamental Forecast for Japanese Yen: Neutral

Japanese Yen Talking Points

Fresh data prints coming out of the U.S. economy may curb the recent selloff in USD/JPY as the Retail Sales report is anticipated to show a 0.6% rise in household spending, and the Federal Open Market Committee (FOMC) Minutes due out on October 17 may ultimately boost the appeal of the dollar as the central bank appears to be on track to deliver another rate-hike in 2018.

A marked pickup in private-sector consumption may encourage the Federal Reserve to adopt a more hawkish tone at the next meeting in November as it remains one of the biggest drivers of growth and inflation, and Chairman Jerome Powell & Co. may prepare U.S. households and businesses for an imminent rate-hike as the central bank largely fulfills its dual mandate for full-employment and price stability.

Speculation for Above-Neutral Fed Rate to Curb USD/JPY Weakness

Keep in mind, recent remarks from Chicago Fed President Charles Evans, who joins the FOMC in 2019, suggest the central bank could be forced to extend the hiking-cycle ‘maybe 50 basis points above neutral in response to the ‘very strong economy,’ and a growing number of central bank officials may adopt a similar tone as the GDPNow model continues to improve, with the 3Q 2018 estimate for real GDP growth (seasonally adjusted annual rate) now standing at 4.2%.

In turn, market participants may pay increased attention to the fresh batch of central bank rhetoric on tap for the week ahead as Governor Lael Brainard, St. Louis Fed President James Bullard, Governor Randal Quarles, Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan are slated to speak, and a batch of hawkish comments may curb the recent weakness in USD/JPY especially as the Bank of Japan (BoJ) shows little to no interest in moving away from its Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

USD/JPY Daily Chart

Speculation for Above-Neutral Fed Rate to Curb USD/JPY Weakness

With that said, USD/JPY may continue to cling to the upward trend from earlier this year following the failed attempts to break/close below the 111.10 (61.8% expansion) to 111.80 (23.6% expansion) area, and recent developments in the Relative Strength Index (RSI) also present a constructive outlook for dollar-yen as the oscillator appears to be reversing course ahead of oversold territory.

Nevertheless, would need a move back above the 112.40 (61.8% retracement) to 113.00 (38.2% expansion) region to bring the topside targets back on the radar, with the first area of interest coming in around 113.80 (23.6% expansion) to 114.30 (23.6% retracement) followed by the 115.10 (61.8% expansion) hurdle.

For more in-depth analysis, check out the Q4 Forecast for Japanese Yen

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

Other Weekly Fundamental Forecast:

New Zealand Dollar Forecast - New Zealand Dollar May Look Past CPI, Focus on Stocks, USD & Fed

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

DISCLOSURES

News & Analysis at your fingertips.