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
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
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
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
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • As #CrudeOil surges, the #WTI Jan 21/Jan22 spread is at its highest since the beginning of this year following the #OPEC 500k b/d ease agreement. That was less than originally planned = tighter supply combined with improving demand outlook amid a vaccine - https://t.co/yTRAELqr6i https://t.co/5h5ZJsO9h8
  • The British Pound is eyeing a push to fresh yearly highs against the US Dollar. However, various technical setups suggest GBP could lose ground to JPY, EUR and NZD in the near term. Get your $GBP market update from @DanielGMoss here:https://t.co/NSUnZnxAdi https://t.co/BN1OvaqOUA
  • #CrudeOil prices rallying over 1.5% during Friday APAC trade #Oil #WTI https://t.co/rXUqvWx2mu
  • Crude oil prices spiked up in the last 10 mins. The US Dollar was little changed. Big news coming in? https://t.co/7IRafLFVZA
  • RT @FxWestwater: Australian Dollar Outlook: $AUDUSD May Rise, Overbought Conditions Eyed Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/12/04/Australian-Dollar-Outlook-AUDUSD-May-Rise-Overbought-Conditions-Eyed.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/wxKBQo…
  • IGCS hints that gold prices may reverse higher as the S&P 500 aims for new highs. Things are looking a little bit more choppy for the growth-linked Australian Dollar. Get your $AUD market update from @ddubrovskyFX here:https://t.co/xiaQOr5D7D https://t.co/IcPbKZpcgp
  • Friday's nonfarm payroll report will be closely scrutinized by investors to assess the health of the US job market amid another viral wave. Economists foresee a 475k increase in nonfarm jobs in November, marking a fifth consecutive monthly slowdown in positions added. https://t.co/MzFlDhecEi
  • The US registered 199,988 new coronavirus cases on December 2nd. Total cases surpassed 14 million.
  • 🇵🇭 Inflation Rate YoY (NOV) Actual: 3.3% Expected: 2.6% Previous: 2.5% https://www.dailyfx.com/economic-calendar#2020-12-04
  • 🇵🇭 Inflation Rate YoY (NOV) Actual: 3.3 Expected: 2.6% Previous: 2.5% https://www.dailyfx.com/economic-calendar#2020-12-04
USD/JPY Forecast: RSI Flashes Sell Signal Ahead of FOMC Minutes

USD/JPY Forecast: RSI Flashes Sell Signal Ahead of FOMC Minutes

2018-05-23 14:34:00
David Song, Strategist
Share:

JAPANESE YEN TALKING POINTS

USD/JPY tumbles lower ahead of the Federal Open Market Committee Minutes to fill the gap from earlier this week, and the recent selloff may gather pace over the 24 hours of trade should the policy statement dampen bets for four rate-hikes in 2018. At the same time, recent price action raises the risk for a further decline in dollar-yen as the exchange rate snaps the series of higher highs & lows from the previous week, while the Relative Strength Index (RSI) flashes a textbook sell signal as the oscillator falls back from overbought territory.

Image of daily change for major currencies

DOLLAR-YEN FILLS GAP, RELATIVE STRENGTH INDEX (RSI) FLASHES SELL SIGNAL AHEAD OF FEDERAL OPEN MARKET COMMITTEE (FOMC) MINUTES

Image of daily change for USDJPY

USD/JPY remains under pressure as the update to the New Home Sales report does little to boost the outlook for U.S. economy, and the FOMC Minutes may fuel the recent decline in the dollar-yen exchange rate as ‘the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.’

Even though the FOMC appears to be on course to implement higher borrowing-costs over the coming months, more of the same from the central bank may produce headwinds for the dollar as Fed officials remain reluctant to adopt a more aggressive approach in normalizing monetary policy. The limited interest to extend the hiking-cycle suggests the FOMC will tolerate above-target price growth for the foreseeable future, and Chairman Jerome Powell and Co. may continue to project a neutral Fed Funds rate of 2.75% to 3.00% at the next quarterly meeting in June as ‘inflation on a 12-month basis is expected to run near the Committee's symmetric 2 percent objective over the medium term.’

With that said, USD/JPY may continue to carve a fresh string of lower highs & lows over the coming days, with the pair at risk for further losses especially as the RSI fails to retain the bullish formation carried over from the previous month.

USD/JPY DAILY CHART

Image of USDJPY daily chart
  • The near-term advance in USD/JPY may continue to unravel following the string of failed attempts to break/close above the 111.10 (61.8% expansion) to 111.60 (38.2% retracement) region, with the pair at risk for further losses as the RSI flashes a bearish trigger.
  • Break/close below the 109.40 (50% retracement) to 110.00 (78.6% expansion) region raises the risk for a move back towards 108.30 (61.8% retracement) to 108.40 (100% expansion), with the next area of interest coming in around 106.70 (38.2% retracement) to 107.20 (61.8% retracement).

For more in-depth analysis, check out theQ2 Forecast for the Japanese Yen

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!

Image of DailyFX economic calendar

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.

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

DISCLOSURES