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
Mixed
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
Bullish
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.61% 🇬🇧GBP: 0.43% 🇳🇿NZD: 0.37% 🇯🇵JPY: 0.18% 🇨🇭CHF: -0.06% 🇨🇦CAD: -0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/qChN4x7BRN
  • 🇷🇺 Inflation Rate YoY (JUL) Actual: 3.4% Expected: 3.4% Previous: 3.2% https://www.dailyfx.com/economic-calendar#2020-08-06
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.04% France 40: -0.02% Germany 30: -0.07% FTSE 100: -0.09% US 500: -0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/1YBsxDGpxy
  • RT @realDonaldTrump: Upon departing the Oval Office for Ohio, I’ve notified my staff to continue working on an Executive Order with respect…
  • Heads Up:🇷🇺 Inflation Rate YoY (JUL) due at 16:00 GMT (15min) Expected: 3.4% Previous: 3.2% https://www.dailyfx.com/economic-calendar#2020-08-06
  • Japanese #Yen Outlook: $USDJPY Rebounds Off Support- Recovery Levels - https://t.co/3Q9KuieaSE https://t.co/iMyJx8fBwL
  • House Speaker Pelosi says "we have to think big" regarding stimulus $DXY $SPX
  • Hey traders! Get your Thursday market highlighs from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/com5RRIcDN
  • The @bankofengland left all policy measures unchanged today, in line with market expectations, and warned that Q2 GDP is likely to be over 20% lower than Q4 2019. Get your $GBPUSD market update from @nickcawley1 here:https://t.co/2VW5eo6n4e https://t.co/b5JDaKwSy9
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.17% 🇦🇺AUD: 0.05% 🇯🇵JPY: 0.01% 🇪🇺EUR: -0.32% 🇨🇦CAD: -0.38% 🇨🇭CHF: -0.43% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/REQGchSDuu
Bullish USD/JPY Sequence at Risk Amid Failure to Test Monthly-High

Bullish USD/JPY Sequence at Risk Amid Failure to Test Monthly-High

2019-03-15 16:00:00
David Song, Strategist
Share:

Japanese Yen Talking Points

USD/JPY manages to carves a series of higher highs & lows ahead of the Federal Open Market Committee (FOMC) meeting, with the recent rebound boosting retail interest, but the lack of momentum to test the monthly-high (112.14) may lead to range-bound conditions as the Relative Strength Index (RSI) continues to threaten the bullish formation from earlier this year.

Image of daily change for major currencies

Bullish USD/JPY Sequence at Risk Amid Failure to Test Monthly-High

Image of daily change for usdjpy rate

The U. of Michigan Confidence survey has done little to alter the near-term outlook for USD/JPY even though the index climbs to 97.8 from 93.8 in February as attention turns to the Federal Reserve interest rate decision, with the central bank slated to update the Summary of Economic Projections (SEP).

Even though the FOMC is widely expected to keep the benchmark interest rate in its current threshold of 2.25% to 2.50%, the central bank may continue to alter the forward-guidance for monetary policy ‘in light of global economic and financial developments and muted inflation pressures.’

Image of fed balance sheet

Recent comments from Fed officials suggest the central bank is on track to abandon the hiking-cycle as officials warn ‘that some risks to the downside had increased, including the possibilities of a sharper-than-expected slowdown in global economic growth, particularly in China and Europe,’ and it remains to be seen if Chairman Jerome Powell & Co. will adjust the longer-run interest rate forecast amid budding fears of a policy error.

With that said, the FOMC may also reveal plans to wind down the $50/month in quantitative tightening (QT) as mixed data prints coming out of the U.S. economy stoke fears of a looming recession, and the Fed rate decision may shake up the recent shift in market participation as retail sentiment recovers from an extreme reading.

Image of IG client sentiment for usdjpy rate

The IG Client Sentiment Report shows 47.4% of traders are net-long USD/JPY, with the ratio of traders short to long at 1.11 to 1. In fact, traders have remained net-short since February 27 when USD/JPY traded near 110.60, with the ratio slipping to an extreme reading earlier this month. The IG Client Sentiment index has recovered ahead of the FOMC meeting, with the number of traders net-long 1.7% lower than yesterday and 10.0% higher from last week, while the number of traders net-short is 3.3% lower than yesterday and 7.4% higher from last week.

A flip in the IG Client Sentiment index driven by a further pickup in net-long interest may warn of a broader shift in USD/JPY behavior, with the exchange rate at risk of threatening upward trending channel from earlier this year especially as the Relative Strength Index (RSI) highlights a similar dynamic. 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 near-term outlook for USD/JPY remains constructive as both price and the RSI continue to track the upward trends from earlier this year, but the correction following the currency market flash-crash appears to be sputtering amid the lack of momentum to test the Fibonacci overlap around 112.40 (61.8% retracement) to 113.00 (38.2% expansion).
  • In turn, failure to hold above the 111.10 (61.8% expansion) to 111.80 (23.6% expansion) region raises the risk for a move back towards 109.40 (50% retracement) to 110.00 (78.6% expansion), which largely lines up with the 50-Day SMA (110.15).
  • Next downside region of interest comes in around 108.30 (61.8% retracement) to 108.40 (100% expansion), but failure to extend the series of lower highs & lows from the previous week may generate range-bound conditions over the coming days.

For more in-depth analysis, check out the Q1 2019 Forecast for the Japanese Yen

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 2019.

--- 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

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.