Fundamentally, looking at global equities, data from the US, Fedspeak and Yellen's comments, USD should be trading much higher.
Why isn't it?
1) JPY-positive flows before the end of the Japanese fiscal year
2) 'Uncertainty' of the Trump administration
3) Profit taking at 115.00 - including option defending and strong sell interest
However, I view this as an excellent opportunity to get long USD against JPY and EUR - as yield differentials, dollar shortage and border-adjustment tax will likely resume the dollar uptrend.
Furthermore, Kuroda continues to welcome a lower yen. QQE with strong yield curve control continues in Japan.
Comment
Just had a look at yield differentials.
USDJPY is tracking the yield differential between USTs and JGBs (10Y) very closely:
I firmly believe that this yield differential will rise.
This will cause USDJPY to go up, as well as JPY weakness against other G10 currencies.
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