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.

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
Bullish
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Gold Price Forecast: Dovish FOMC Could Underpin Bullion Ahead of NFP - https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/11/27/Gold-Price-Forecast-Dovish-FOMC-Could-Underpin-Bullion-Ahead-of-NFP.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr #Gold #XAUUSD $GOLD $GLD https://t.co/N9ChZOqSdy
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.42% 🇦🇺AUD: 0.35% 🇳🇿NZD: 0.30% 🇨🇦CAD: 0.20% 🇯🇵JPY: 0.16% 🇬🇧GBP: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/4uyJxc09OH
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.48% Gold: -1.28% Silver: -2.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/pbfmvnsvuu
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.65%, while traders in France 40 are at opposite extremes with 78.02%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/NL3bVphnYH
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.64% Germany 30: 0.04% US 500: 0.00% Wall Street: 0.00% France 40: -0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/uZ1HjcIJ4q
  • GBP/USD continues to fail around the 1.3400 level and is unlikely to make a confirmed break higher ahead of any trade talk confirmation. Get your $GBPUSD technical analysis from @nickcawley1 here:https://t.co/EWLFXK1q3q https://t.co/4XSSNxobMo
  • The Gold price sell-off has broken below key technical barriers and leaves the outlook for XAU/USD weighted to the downside heading into the close of the month. Get your $XAUUSD technical analysis from @MBForex here:https://t.co/3YLcAFlr5f https://t.co/1uFb9UkDvV
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.48% Gold: -1.28% Silver: -2.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/OvThGydQBs
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.65%, while traders in France 40 are at opposite extremes with 78.02%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Yq6wLxhblV
  • Vaccine Optimism Sparks 28% Increase in Oil Prices. Get your #crudeoil market update from @JMcQueenFX here:https://t.co/F3AlSkniXk https://t.co/qevY4Gh6o9
USD/JPY Bear-Flag Formation Unfolds as BoJ Alters Policy Outlook

USD/JPY Bear-Flag Formation Unfolds as BoJ Alters Policy Outlook

2018-03-02 16:00:00
David Song, Strategist
Share:

FX Talking Points:

- USD/JPY Bear-Flag Formation Unfolds as Bank of Japan (BoJ) Governor Haruhiko Kuroda Sees 2019 Deadline for QQE Program with Yield-Curve Control. RSI Approaches Oversold Territory Ahead of Fed Rhetoric, NFP Report.

- Canadian Dollar Holds Losses Following Lackluster Gross Domestic Product (GDP) Report. USD/CAD Eyes December-High (1.2920), RSI Flirts with Overbought Territory.

DailyFX TableUSD/JPY Table

USD/JPY is back under pressure as Bank of Japan (BoJ) Governor Haruhiko Kuroda unexpectedly alters the outlook for monetary policy, with the pair at risk for further losses as a bear-flag formation unfolds.

During the confirmation in front of parliament, Governor Kuroda pointed out that the board will have to think about exiting the Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control in fiscal 2019 as the BoJ appears to be on track to achieve the 2% inflation-target over the policy horizon. The sudden change suggests the BoJ will deliver a less-dovish statement at the next interest rate decision on March 9, and the broader shift in USD/JPY behavior may continue to take shape over the coming months Governor Kuroda and Co. approach the end of their easing-cycle.

Nevertheless, the key event risks lined up for the first full-week of March may shake up the near-term outlook for USD/JPY as Fed Governor Randal Quarles, New York Fed President William Dudley, Fed Governor Lael Brainard and Atlanta Fed President Raphael Bostic, all 2018-voting members on the Federal Open Market Committee (FOMC), are scheduled to speak ahead of the U.S. Non-Farm Payrolls (NFP) report, and a slew of hawkish rhetoric may help to limit the recent decline in the dollar-yen exchange rate as it boosts bets for four Fed rate-hikes in 2018.

USD/JPY Daily Chart

USD/JPY Daily Chart

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.

  • Recent price action keeps the downside targets on the radar as USD/JPY takes out the February-low (105.55), while the Relative Strength Index (RSI) appears to be on the cusp of pushing into oversold territory.
  • May see USD/JPY continue to carve a series of lower highs & lows as the bearish momentum appears to be gathering pace, but still need a close below 105.40 (50% retracement) to open up the next downside hurdle around 104.10 (78.6% retracement) to 104.20 (61.8% retracement).
USD/CAD Table

USD/CAD eyes the December-high (1.2920) following the lackluster updates to Canada’s Gross Domestic Product (GDP) report, and the pair may continue to gain ground ahead the Bank of Canada’s (BoC) March 7 meeting as the bullish momentum appears to be gathering pace.

The BoC is likely to reiterate the ‘outlook is expected to warrant higher interest rates over time’ as the economy approaches full-capacity, but Governor Stephen Poloz and Co. may continue to tame expectations for an imminent rate-hike as ‘some continued monetary policy accommodation will likely be needed to keep the economy operating close to potential and inflation on target.’ In turn, more of the same from the BoC may fuel the near-term recovery in USD/CAD as the central bank appears to be in no rush to further normalize monetary policy.

Recent price action suggests the advance from the 2018-low (1.2247) will continue to evolve as the pair extends the lower-highs from earlier this week, and the pair looks poised to test the topside hurdles as Relative Strength Index (RSI) flirts with overbought territory.

USD/CAD Daily Chart

USD/CAD Daily Chart

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

  • Topside targets remain on the radar for USD/CAD following the advance from 1.2620 (50% retracement), with a break of the December-high (1.2920) raising the risk for a more meaningful run at the 1.2980 (61.8% retracement) to 1.3030 (50% expansion) hurdle.
  • Need to keep a close eye on the RSI should it fail to push above 70, with USD/CAD at risk of facing a pullback in the oscillator turns around ahead of overbought territory.
  • Overbought RSI reading may fuel the near-term advance in the exchange rate, with the next topside region of interest coming in around 1.3130 (61.8% retracement).
DailyFX Calendar

Interested in having a broader discussion on current market themes? Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

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

DISCLOSURES