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.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
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
Oil - US Crude
Wall Street
More View more
Real Time News
  • The US Dollar will be bracing for a cascade of political risks including the first presidential debate, ongoing stimulus talks, the Supreme Court vacancy against the backdrop of key employment data. Get your #currencies update from @ZabelinDimitri here:
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your $USDINR market update from @ddubrovskyFX here:
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out:
  • Weakness in equity markets continued last week as losses built and technical patterns hint further bearishness might be ahead. Get your #equities update from @PeterHanksFX here:
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here:
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here:
  • #Gold prices succumbed to selling pressure as the US Dollar soared this past week What is #XAUUSD facing these next few days and can these fundamental forces extend its selloff? Check out my outlook here -
  • 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:
  • 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:
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:
USD/JPY Rate Snaps Bullish Sequence, Short Interest Jumps

USD/JPY Rate Snaps Bullish Sequence, Short Interest Jumps

2018-10-02 15:30:00
David Song, Strategist

Japanese Yen Talking Points

The recent rally in USD/JPY appears to have stalled ahead of the November 2017-high (114.74) as the exchange rate snaps the recent series of higher highs & lows, but there appears to be a broader shift in market behavior amid a jump in retail short interest.

Image of daily change for major currencies

USD/JPY Rate Snaps Bullish Sequence, Short Interest Jumps

Image of daily change for usdjpy rate

USD/JPY pulls back from the 2018-high (114.06) as Fed officials strike a cautious tone, with Boston Fed President Eric Rosengren warning that the U.S. economy flashing ‘a bunch of yellow lights,’ and another batch of lackluster data prints may keep the dollar-yen exchange rate under pressure as the ISM Non-Manufacturing survey is anticipated to show the index narrowing to 58.0 from 58.5 in August.

Signs of waning business confidence may encourage the Federal Open Market Committee (FOMC) to keep the benchmark interest rate on hold at the next meeting in November as the trade war with China dampens the outlook for growth, but the data prints may do little to derail the central bank from its hiking-cycle as Chairman Jerome Powell & Co. reiterate that ‘the Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term.’

Image of fed fund futures

With that said, expectations for a less accommodative stance should keep USD/JPY bid as Fed Fund Futures continue to highlight bets for another 25bp rate-hike at the next quarterly meeting in December, and the exchange rate may exhibit a bullish behavior over the remainder of the year especially as the Bank of Japan (BoJ) remains in no rush to move away from its Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control.

Image of IG client sentiment for usdjpy

Nevertheless, the IG Client Sentiment Report now shows33.9% of traders are now net-long USD/JPY, with the ratio of traders short to long at 1.95 to 1. In fact, traders have remained net-short since September 13 when USD/JPY traded near the 111.20 region even though price has moved 2.3% higher since then. The number of traders net-long is 4.7% higher than yesterday and 9.8% lower from last week, while the number of traders net-short is 13.7% higher than yesterday and 37.5% higher from last week.

The material shift in retail interest provides a contrarian view to crowd sentiment, which looks poised to persist over the near-term, and the outlook for USD/JPY remains supportive ahead of the U.S. Non-Farm Payrolls (NFP) report as the Relative Strength Index (RSI) preserves the bullish formation carried over from the previous month. However, lack of momentum to hold above 70 may spur a near-term pullback in the dollar-yen exchange rate as the oscillator falls back from overbought territory. Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

USD/JPY Daily Chart

Image of usdjpy daily chart
  • The failed attempt to break/close above the 113.80 (23.6% expansion) to 114.30 (23.6% retracement) region may curbs the near-term outlook for USD/JPY, with the 112.40 (61.8% retracement) to 113.10 (38.2% expansion) on the radar as the exchange rate also snaps the bullish series from earlier this week.
  • Need a close above the Fibonacci overlap around 113.80 (23.6% expansion) to 114.30 (23.6% retracement) to open up the November 2017-high (114.74), with the next region of interest coming in around 115.10 (61.8% expansion) followed by the 116.00 (23.6% expansion) to 116.50 (78.6% expansion) area.

For more in-depth analysis, check out the Q4 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.