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
EUR/USD
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
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
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
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
  • The US Dollar may rise against ASEAN currencies like the Singapore Dollar if local retail sales and sentiment data disappoints. USD/IDR may fall on the Bank of Indonesia. Get your market update from @ddubrovskyFX here:https://t.co/HpH8pXFdLl https://t.co/ZuHLVL8ItN
  • The US Dollar may rise against the Singapore Dollar and Philippine Peso. USD/MYR’s downtrend holds, but a bullish pattern brews. USD/IDR seems stuck between key technical levels.Get youe #ASEAN currencies market update from @ddubrovskyFX here:https://t.co/TF6DRVp6kX https://t.co/MYbR79MTux
  • US Supreme Court says Justice Ruth Ginsburg has passed away -BBG
  • 3 consecutive down weeks for the #SP500 as of today, the first actually in almost one year How's the #Fed balance sheet dong? Up 0.76% this week, most in a month. Though all things considered, materially unchanged since June/July Markets may be growing increasingly impatient... https://t.co/wD6wga9vsu
  • The New Zealand Dollar appears poised to extend its climb against its haven-associated counterparts as long-term trend break hints at cyclical upturn. Get your $NZDUSD market update from @DanielGMoss here: https://t.co/CPxP1Q8B6d https://t.co/NBJ9qkaNei
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.17% 🇳🇿NZD: 0.07% 🇪🇺EUR: -0.06% 🇨🇦CAD: -0.30% 🇨🇭CHF: -0.33% 🇬🇧GBP: -0.43% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/lYbgFKQKmu
  • USD/MXN is in danger of picking up more momentum as the recent decline takes out support levels and gains ‘negative curvature’ to its path. Get your $USDMXN technical analysis from @PaulRobinsonFX here: https://t.co/eQzD6JyA5c https://t.co/km6neTN3M6
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Gold: 0.33% Oil - US Crude: -0.55% Silver: -0.64% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/0yp0FnGl8y
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.22%, while traders in NZD/USD are at opposite extremes with 71.43%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/fu1Xj6AuYv
  • US Equity Update (Friday Close): $DJI -0.88% $SPX -1.12% $NDX -1.30% $RUT -0.38% $VIX -2.00%
USD/JPY Rate Outlook Mired by Lower Highs, Lackluster U.S. CPI

USD/JPY Rate Outlook Mired by Lower Highs, Lackluster U.S. CPI

2018-10-11 15:30:00
David Song, Strategist
Share:

Japanese Yen Talking Points

USD/JPY slips to a fresh monthly-low (111.97) amid the recent rout in risk appetite, and the exchange rate may stage a larger correction over the remainder of the week as it extends the series of lower highs carried over from the previous week.

Image of daily change for major currencies

USD/JPY Rate Outlook Mired by Lower Highs, Lackluster U.S. CPI

Image of daily change for usdjpy rate

The fresh updates to the U.S. Consumer Price Index (CPI) have done little to prop up USD/JPY as the headline reading narrows more-than-expected in September, with the figure slipping to 2.3% from 2.7% per annum the month prior.

A deeper look at the report showed the core rate of inflation also falling short of market expectations as the gauge held steady at 2.2% for the second consecutive month, and signs of easing price pressures may start to sway the outlook for monetary policy as the development highlights a limited threat for above-target inflation.

The recent batch of lackluster data prints may force the Federal Open Market Committee (FOMC) to soften its hawkish tone especially as President Donald Trump warns that the ‘Fed is making a mistake,’ but it seems as though Chairman Jerome Powell & Co. have little to no interest in deviating from the hiking-cycle as the central bank largely achieves its dual mandate for full-employment and price stability.

Image of fed fund futures

With that said, Fed Fund Futures may continue to reflect expectations for another 25bp rate-hike at the next quarterly meeting in December, and the material shift in retail interest may continue to materialize over the near-term amid the pickup in market volatility.

Image of IG client sentiment for usdjpy

The IG Client Sentiment Report shows 38.8% of traders are net-long USD/JPY, with the ratio of traders short to long at 1.58 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 1.0% higher since then.The number of traders net-long is 12.4% lower than yesterday and 4.5% lower from last week, while the number of traders net-short is 15.7% lower than yesterday and 14.4% lower from last week.

The ongoing skew in retail position offers a contrarian view to crowd sentiment, but recent price action keeps the downside targets on the radar as the exchange rate extends the series of lower highs carried over from the previous week. 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
  • Keep in mind, the broader outlook for USD/JPY remains constructive as the exchange rate finally marks a closing price action the 113.80 (23.6% expansion) to 114.30 (23.6% retracement) region, with the exchange rate still tracking the upward trending channel from earlier this year.
  • However, USD/JPY may stage a larger correction following the failed run at the November 2017-high (114.74), with the 111.10 (61.8% expansion) to 111.80 (23.6% expansion) region now on the radar as the exchange rate approaches channel support.
  • A break/close below the stated region may warn of a broader shift in USD/JPY, with the next downside region of interest coming in around 109.40 (50% retracement) to 110.00 (78.6% expansion).

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.

DISCLOSURES