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
Bearish
Oil - US Crude
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
Wall Street
Mixed
Gold
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
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • US Equities Update (Friday Close): $DJI +1.34% $SPX +1.60% $NDX +2.34% $RUT +1.59% $VIX -7.93%
  • Another turbulent week for the Pound with the currency falling 1.6% against the greenback. Get your $GBPUSD market update from @JMcQueenFX here:https://t.co/WjU4oYpmf7 https://t.co/hkow2om7I6
  • Heads Up:🇺🇸 Fed Williams Speech due at 19:10 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-25
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.07% Gold: -0.16% Silver: -0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/hbSoMksZVd
  • With South Africa recently easing restrictions in an effort to reopen the economy, investors are still wary about the future of the emerging market. Get your $USDZAR market update from @Tams707 here:https://t.co/f5Jmukipg0 https://t.co/o5Dyok2O99
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.38%, while traders in EUR/GBP are at opposite extremes with 65.19%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/eO8yAFDUvh
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: US 500: 1.06% Wall Street: 0.73% France 40: 0.65% Germany 30: 0.59% FTSE 100: 0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/UFnW7j9LC3
  • Update on #Cryptocurrencies #BITCOIN +0.29% #BITCOINCASH +0.02% #ETHEREUM +0.51% #RIPPLE +3.72% #LITECOIN +2.19%
  • It took some time for USD/MXN to respond to weakness in equity markets, but this week it came to life as U.S. weakness spread across global markets. Get your $USDMXN technical analysis from @PaulRobinsonFX here:https://t.co/G8b6w1wCzH https://t.co/zEtpARMkMg
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.38%, while traders in EUR/GBP are at opposite extremes with 65.20%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/WGk95Bnjx5
USD/JPY Bull Trend Snaps Even as BoJ Sticks to Dovish Forward-Guidance

USD/JPY Bull Trend Snaps Even as BoJ Sticks to Dovish Forward-Guidance

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

Japanese Yen Talking Points

USD/JPY slips to fresh monthly lows even as Bank of Japan (BoJ) Governor Haruhiko Kuroda strikes a dovish outlook for monetary policy, and recent price action raises the risk for a further decline in the exchange rate as dollar-yen finally snaps the upward trend from earlier this year.

Image of daily change for major currencies

USD/JPY Bull Trend Snaps Even as BoJ Sticks to Dovish Forward-Guidance

Image of daily change for usdjpy rate

Fresh comments from Governor Kuroda suggest the BoJ has no intentions of moving away from its Quantitative/Qualitative Easing (QE) Program with Yield-Curve Control as ‘inflation is only 1 percent,’ and the central bank may continue to strike a dovish forward-guidance at the next interest rate decision on October 31 as price growth runs below the 2% target.

In contrast, the Federal Reserve may prepare U.S. household and businesses for an imminent rate-hike as the U.S. economy is now expected to growth 4.2% per annum in the third-quarter of 2018, and the deviating paths for monetary policy instills a long-term bullish outlook for USD/JPY as Chairman Jerome Powell & Co. appear to be on track to carry its hiking-cycle into 2019.

Nevertheless, USD/JPY appears to be on track to test the September-low (110.38) even as the lackluster U.S. Retail Sales report does little to influence the exchange rate, with the updates showing a 0.1% rise in September versus projections for a 0.6% print, and the ongoing series of lower highs keeps the downside targets on the radar as the bearish momentum appears to be reasserting itself. In turn, the current environment may keep USD/JPY under pressure as traders remain risk adverse, and the exchange rate may stage a larger correction over the coming days as the pickup in market volatility spurs a shift in retail interest.

Image of IG client sentiment for usdjpy rate

The IG Client Sentiment Report shows 50.6% of traders are net-long USD/JPY, with the ratio of traders long to short at 1.02 to 1. The number of traders net-long is 7.9% higher than yesterday and 19.4% higher from last week, while the number of traders net-short is 15.1% lower than yesterday and 38.2% lower from last week.

If the recent change in retail interest persists alongside the depreciation in USD/JPY, the developments may offer a contrarian view to crowd sentiment especially as the exchange rate snaps the bullish trend from earlier this year. Will also be keeping a close eye on the Relative Strength Index (RSI) as it comes up against trendline support, with a move below 30 raising the risk for a further decline in dollar-yen as the bearish momentum gathers pace. 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
  • USD/JPY stands at risk for further losses as it finally snaps the upward trend from earlier this year, with a closing price below the 111.10 (61.8% expansion) to 111.80 (23.6% expansion) hurdle raising the risk for a move back towards 109.40 (50% retracement) to 110.00 (78.6% expansion).
  • However, a series of failed attempts to break/close below the stated region may generate range-bound conditions, with the near-term outlook capped by the Fibonacci overlap around 112.40 (61.8% retracement) to 113.00 (38.2% 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