The USD/JPY focusing on today’s US CPI’s in a lose-lose-spot
Today, our focus will be on the USD/JPY and the US inflation rate. Last month, the US annual inflation rate came in at 2% for April 2019, 10 basis points higher from 1.9% the previous month, just below forecasts of 2.1 percent.
The question today is whether the rebound in energy prices can be seen today too, allowing prices to stabilise at 2% - the highest rate since last November.
If so, it surely wouldn't take very long to hear chatter among market participants that the Fed now faces a problem. The reason: after Fed chairman Powell opened the door for a potential rate cut on Tuesday, and the Fed Watch Tool currently shows markets expecting the Fed to cut rates at least once by December, with a probability of over 95%. In addition to that, last Friday saw a weak NFP print with only 75,000 adding further fuel to rate cut speculations.
All in all, we consider the USD/JPY in a potential lose-lose-situation, and that it's only a question of time until the USD/JPY continues with its bearish performance after the break below the crucial support region around 108.70, following the biggest five-day drop in 2-year Treasury yields since 2008.
Technically, a drop lower stays an option as long as we trade below 110.70 on a daily time-frame, with a stint as low as 105.00, the region around the January Flash Crash lows, being a serious option for the weeks to come.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The question today is whether the rebound in energy prices can be seen today too, allowing prices to stabilise at 2% - the highest rate since last November.
If so, it surely wouldn't take very long to hear chatter among market participants that the Fed now faces a problem. The reason: after Fed chairman Powell opened the door for a potential rate cut on Tuesday, and the Fed Watch Tool currently shows markets expecting the Fed to cut rates at least once by December, with a probability of over 95%. In addition to that, last Friday saw a weak NFP print with only 75,000 adding further fuel to rate cut speculations.
All in all, we consider the USD/JPY in a potential lose-lose-situation, and that it's only a question of time until the USD/JPY continues with its bearish performance after the break below the crucial support region around 108.70, following the biggest five-day drop in 2-year Treasury yields since 2008.
Technically, a drop lower stays an option as long as we trade below 110.70 on a daily time-frame, with a stint as low as 105.00, the region around the January Flash Crash lows, being a serious option for the weeks to come.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.