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Usd-jpy

Will the BoJ continue to Diverge?YES! The BoJ is expected to release its monetary policy report today, and all signs point to the BoJ maintaining its current stance. Keeping with the negative rates of -0.1%. The BoJ is the last major central bank yet to jump onto the interest rate hike path, diverging from the rest of the world. Releasing an unchanged monetary policy report at the last BoJ meeting in September saw the USDJPY fluctuate by almost 190 pips at the 144.50 price level before climbing higher by 135 pips to reach 145.90. If we see a similar price action this time around, the USDJPY could fluctuate significantly along the 146.50 price level before climbing higher beyond 147 to test as high as the 148.50 (50% Fibonacci retracement level). However, the threat of further intervention from the BoJ still looms. As the USDJPY climbs higher, look for possible action from the BoJ, to take the USDJPY back toward the 145 price level, and beyond that, the 140.70 key support level. The safest sell-stop order would be below 145, SL: 50pips TP: 350pips (Risk to Reward of 1:6.9). A slightly more adventurous sell-limit order would be below 147 SL: 40pips TP: 170 pips (Risk to Reward of 1:4)
Short
by JinDao_Tai
Did you hear what happened to the YEN?On Friday 21st October, the USDJPY had been climbing steadily, almost reaching the round number of 152.00. Then it reversed and spiked lower, from 151.50 reaching a low of 146.20. This move was very similar to what happened on the 22nd of September, when the USDJPY climbed above 145 and almost reached 146 before crashing down to 140.35. However, when the USDJPY came down in September, the BOJ did say that they had taken action to intervene and even announced that they had spent 2.84 trillion yen to prop up the yen. This time, in October, authorities from the Ministry of Finance have remained silent on whether they made any further attempts to support the currency including on Friday With the BOJ policy decision on Friday (the intervention on 22 September was after the release of the BOJ policy decision). Look for further downside on the USDJPY, especially if the price breaks below the 147 support level, with 145 as the next key support level. *Remember to check out my previous analysis on the Yen and the BOJ Intervention
Short
by JinDao_Tai
USDJPY 4hour Analysis October 23rd, 2022USDJPY Bullish Idea Weekly Trend: Bullish Daily Trend: Bullish 4hour Trend: Bullish Trade scenario 1: Last week we saw a huge drop on UJ but it is still bullish, that’s how bullish overall we have been on higher timeframes. Ideally, we would love to see some consolidation to get a clearer look at price action but all we have is volume so scenarios are scarce. The most likely scenario is price action surging back to 150.000 with consolidation following. Trade scenario 2: If we are to consider another scenario we would look for price action to fall lower with consolidation closer to our 145.000 support level.
Long
by ForexLeague
1
USDJPY: Japan intervention is not enough to change major trend.Hey traders, as the monetary policy in the US remains aggressive we still see a possibility of continuation to the upsides on USDJPY unless fed becomes Dovish but it's still not going to happen as inflation in the US is still an issue and the main focus for the US is to control inflation, so what we can expect? more rate hikes, more USD bulls and potentially a continuation of USDJPY uptrend. hence in the coming week we will be monitoring USDJPY for a long term buying opportunity around 146 zone, remember to avoid using tight Stop losses in this type of environments since USDJPY movements will be more volatile and violent and respecting a proper risk management is always recommended so you avoid blowing your accounts, sticking to 1% risk with proper reward ratio will not allow allow the market to you knock you off. if you have any question don't hesitate to ask in the comment section.
Long
by JoeChampion
40
The If, When, How of the BoJ interventionAs the Yen continues to weaken, the market consensus is that the BoJ is most likely to intervene when the price hits the round number level of 150. Understanding the previous time the BoJ intervened (non stealth) on 22nd September 2022, there are a few learning points to note: - The market consensus price level then was 145. However, the BoJ intervened only when the USDJPY climbed to reach 145.90. ( Noteworthy : A hard and fast number probably isn't what the BoJ is paying attention to, OR market consensus is generally wrong) - The BoJ is deemed to have intervened (stealth) twice more since the 22nd September 2022 (13th & 18th October). But these saw lesser price volatility and were quickly and easily reversed. ( Noteworthy : Stealth intervention doesn't seem to work well) - The BoJ intervention on 22nd September was after the BoJ policy report and the actions were announced by the BoJ. ( Noteworthy : The next BoJ policy report is soon! On the 28th October) How to prepare and take advantage of a BoJ intervention? - Utilise a sell stop pending order. - Judging from the previous intervention which had more than 500pip move and almost no whipsaw; you could apply the pending order below the round number level (in this case, below 149) - And if the price continues to climb, just shift the order up accordingly. - However, always ensure that you have a StopLoss: approximately 45 pips and a TakeProfit: of at least 200 pips which would allow you to have a very good R:R.
by JinDao_Tai
5
USDJPY Up 18%The USDJPY is now up 18% since breaking out from the major resistance at 125.85 from the June 2015 high. In the recent post for the USDJPY, price was up 11%, so it has seen good growth since then. The move is no surprise as price broke out from long-term consolidation, lasting almost 7 years. Following this strong current move, we can expect another period of long-term consolidation. This is why we want to catch the big moves as they happen. Price is now approaching the 150 round number which is a psychological level of resistance. We may see price hesitate around this level. Whether price will break beyond 150 or reverse will be down to who comes out on top, the buyers or the sellers. We have multiple positions in this forex pair. We are now managing our positions and will compound if and when the time is right. If you like enjoyed this post, make sure to like, and follow for more quality content! If you have any questions or comments, comment below. We reply to every comment! See below for more information on our trading techniques. As always, keep it simple, keep it Sublime.
Long
by Sublime_Trading
4
USD JPY - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing another acceleration in the SEP CPI data, the Fed is under pressure to continue hiking rates and ramping up QT. Markets expect another 75bsp hike in NOV and currently prices the terminal rate at 4.8%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). Another choppy week for the USD finishing 0.5% stronger on the week but keeping a small range. With a quiet week ahead on the data side, the USD is most likely going to get most of it’s momentum from overall risk flows. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced for the Fed and USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a >5.0% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. The calendar is extremely light in the week ahead, which means overall risk sentiment could be the biggest source of momentum (which means keeping a close eye on further equity and bond market sell offs). Keep in mind earnings season gets a bit mor exciting this week and will be important to watch for risk. JPY FUNDAMENTAL OUTLOOK: BEARISH BASELINE In recent weeks, yield differentials of course have been the biggest driver for the JPY with the BoJ keeping 10-year JGB yields capped at 0.25% with yield curve control while other central banks are hiking rates aggressively. Thus, right now the JPY is pressured as yields have soared for the sky, but the threat and risk of further intervention could keep weakness limited. Japanese authorities intervened in the FX market in September by buying JPY and selling Dollars for the first time since 1998. The intervention saw some short-term downside of USDJPY , but as of Friday USDJPY almost reached 149 without any sign of further intervention action. The bias for USDJPY remains higher fundamentally speaking as yield differentials are still very wide, so unless authorities actively intervene the JPY can continue to weaken. The risk of buying is that we buy into interventions, which means risks are high. POSSIBLE BULLISH SURPRISES Catalysts that push US10Y lower (less hawkish Fed, lower UC CPI , lower growth) could trigger bullish reactions from the JPY. Any catalyst that triggers meaningful downside in key commodities like Oil (deteriorating demand outlook, ease in supply shortage) could trigger bullish JPY reactions. Any additional intervention from the BoJ or MoF. Watch Core CPI on Friday. Any print above 3.4% would be the highest inflation in 40 years and could spark speculation of less dovish policy action from the BoJ and should be JPY positive. POSSIBLE BEARISH SURPRISES Any catalysts that push US10Y higher (more aggressive Fed, higher US CPI , better growth) could pressure the JPY. Catalyst that triggers meaningful upside in Oil (deteriorating demand, increased supply) could trigger JPY downside. Reluctance from BoJ and MoF for intervening around the 145 level in USDJPY could spark speculative buying. Watch Core CPI on Friday. If Core CPI prints below 3.4% and BoJ officials talk down the rise as mostly transitory it could add further pressure on the JPY. BIGGER PICTURE The fundamental outlook remains bearish for the JPY due to yield differentials and the impact of a weaker JPY on the current account balance. As long as US10Y remain elevated and the BoJ stays stubbornly dovish and no currency intervention occurs, the bias remains lower. But take note of positioning which means we don’t want to chase the JPY lower, especially with the risk of further currency intervention should the JPY continue to weaken. The best opportunities for now remain short-term focused on further intervention or strong moves lower in US yields.
by thunderpips
7
USD JPY - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing another acceleration in the SEP CPI data, the Fed is under pressure to continue hiking rates and ramping up QT. Markets expect another 75bsp hike in NOV and currently prices the terminal rate at 4.8%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). Another choppy week for the USD finishing 0.5% stronger on the week but keeping a small range. With a quiet week ahead on the data side, the USD is most likely going to get most of it’s momentum from overall risk flows. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced for the Fed and USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a >5.0% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. The calendar is extremely light in the week ahead, which means overall risk sentiment could be the biggest source of momentum (which means keeping a close eye on further equity and bond market sell offs). Keep in mind earnings season gets a bit mor exciting this week and will be important to watch for risk. JPY FUNDAMENTAL OUTLOOK: BEARISH BASELINE In recent weeks, yield differentials of course have been the biggest driver for the JPY with the BoJ keeping 10-year JGB yields capped at 0.25% with yield curve control while other central banks are hiking rates aggressively. Thus, right now the JPY is pressured as yields have soared for the sky, but the threat and risk of further intervention could keep weakness limited. Japanese authorities intervened in the FX market in September by buying JPY and selling Dollars for the first time since 1998. The intervention saw some short-term downside of USDJPY, but as of Friday USDJPY almost reached 149 without any sign of further intervention action. The bias for USDJPY remains higher fundamentally speaking as yield differentials are still very wide, so unless authorities actively intervene the JPY can continue to weaken. The risk of buying is that we buy into interventions, which means risks are high. POSSIBLE BULLISH SURPRISES Catalysts that push US10Y lower (less hawkish Fed, lower UC CPI, lower growth) could trigger bullish reactions from the JPY. Any catalyst that triggers meaningful downside in key commodities like Oil (deteriorating demand outlook, ease in supply shortage) could trigger bullish JPY reactions. Any additional intervention from the BoJ or MoF. Watch Core CPI on Friday. Any print above 3.4% would be the highest inflation in 40 years and could spark speculation of less dovish policy action from the BoJ and should be JPY positive. POSSIBLE BEARISH SURPRISES Any catalysts that push US10Y higher (more aggressive Fed, higher US CPI, better growth) could pressure the JPY. Catalyst that triggers meaningful upside in Oil (deteriorating demand, increased supply) could trigger JPY downside. Reluctance from BoJ and MoF for intervening around the 145 level in USDJPY could spark speculative buying. Watch Core CPI on Friday. If Core CPI prints below 3.4% and BoJ officials talk down the rise as mostly transitory it could add further pressure on the JPY. BIGGER PICTURE The fundamental outlook remains bearish for the JPY due to yield differentials and the impact of a weaker JPY on the current account balance. As long as US10Y remain elevated and the BoJ stays stubbornly dovish and no currency intervention occurs, the bias remains lower. But take note of positioning which means we don’t want to chase the JPY lower, especially with the risk of further currency intervention should the JPY continue to weaken. The best opportunities for now remain short-term focused on further intervention or strong moves lower in US yields.
by thunderpips
6
USDJPY 4hour Analysis October 16th, 2022USDJPY Neutral Idea Weekly Trend: Bullish Daily Trend: Bullish 4hour Trend: Bullish Trade scenario 1: No surprise that UJ is looking extremely bullish again this week. We’re far from an entry any way you cut it but ideally price action rejects at current resistance (149.000) and starts heading lower to form structure. If we see price action move similarly to the blue trade scenario then we will have a great entry opportunity. Anything else I'm not currently interested in. Trade scenario 2: The other likely scenario is that UJ does not reject at resistance but instead breaks above our 149.000 zone. We will have to re-analyze and come up with new scenarios if that happens.
Long
by ForexLeague
USDJPY Testing the top of its 5 month Megaphone. Rejection?The USDJPY pair rose aggressively last week, breaking above its September 22 High, the Resistance at the time. The price came on Friday as close as possible to the top (Higher Highs) trend-line of its 5-month Bullish Megaphone pattern. That alone would be enough to reject the uptrend and pull the price back on its own. But this isn't the only metric pointing towards a rejection. As you see on the RSI and MACD indicators below the chart, the 1D RSI also hit its 5-month Lower Highs trend-line. This is the 2nd Lower High within 5 weeks and when that happened previously, the pair priced its short-term top and pulled-back. Same with the 1D MACD, which just printed a Bullish Cross. As you see when a Bullish Cross took place that close to the Megaphone's top, the price formed a High and pulled-back. As for how deep a potential pull-back can go? The 1D MA50 (blue trend-line) is the short-term target, with the 1D MA100 (green trend-line) being the medium-term, having formed the last bottom on August 02. Naturally the pattern is completed on the Higher Lows trend-line. ------------------------------------------------------------------------------- ** Please LIKE 👍, SUBSCRIBE ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support me, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- You may also TELL ME 🙋‍♀️🙋‍♂️ in the comments section which symbol you want me to analyze next and on which time-frame. The one with the most posts will be published tomorrow! 👏🎁 ------------------------------------------------------------------------------- 👇 👇 👇 👇 👇 👇 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
Short
by TradingShot
5
usdjpy USD/JPY HITS A FRESH 34-YEAR HIGH AT 148.85 BEFORE TICKING DOWN The dollar takes a breather after reaching 148.85 high. Monetary policy divergence crushes the yen. USD/JPY: Potential top at 149.17/150.00. The dollar accelerated its rally against the Japanese yen on Friday to hit session highs at 148.85. The pair has surged beyond 3% in an eight-day rally, reaching its highest levels since 1990. YEN HAMMERED BY MONETARY POLICY DIVERGENCE The Japanese yen is dropping like a stone weighed by the monetary policy divergence between the Bank of Japan and the Federal Reserve, and also the rest of the world’s major central banks. While the Fed is expected to hike interest rates by 0.75% for the fourth consecutive time in November, the Bank of Japan remains committed to its ultra-expansive policy, which makes the yen less attractive for investors. At this point, the pair has appreciated well above the level that triggered intervention by the Bank of Japan last month. So far the bank has remained inactive, however, the Japanese finance minister Suzuki reiterated on Thursday the government’s commitment to take action against excessive currency volatility. USD/JPY: POTENTIAL TOP AT 149.17/150.00 AREA – CREDIT SUISSE According to FX analysts at Credit Suisse, the pair might be near a potential top: “Our bias remains for a deeper push higher into the 147.62/153.01 zone with resistance above 147.62/68 seen next at 148.42 ahead of trend resistance from April at 149.17. With rare gap resistance from August 1990 seen at 149.31 and the psychological 150.00 barrier just above, we look for a potential top in this 149.17/150.00 zone.”
Long
by DrGhanizadeh
1
USD JPY - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing acceleration in August, the Fed is under pressure to continue hiking rates and ramping up QT. The bank made its third 75bsp at the Sep meeting and pushed up their 2023 terminal rate projection to 4.6%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). It was a choppy week for the USD, with entertaining ‘Fed Pivot’ narratives trying to make sense of the price action. In the week ahead, all eyes turns to the week’s main event which is Thursday’s September US CPI report. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced in for the Fed and the USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a higher than 5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. In the upcoming week markets will only have eyes for one data point and that will be the US September CPI data released on Thursday. With expectations of a higher Core CPI YY but expectations of a lower Headline CPI YY it seems risky to trade into this event. JPY FUNDAMENTAL OUTLOOK: BEARISH BASELINE Japan’s government finally had enough in the past week by intervening to sell USD and buying JPY for the first time since 1998 two weeks ago. Officials were smart enough to keep details low, which has left JPY sellers cautious of more intervention. In recent weeks, yield differentials of course have been the biggest driver for the JPY with the BoJ keeping 10-year JGB yields capped at 0.25% with yield curve control while other central banks are hiking rates aggressively. Thus, right now the JPY is pressured as yields have soared for the sky, but the threat and risk of further intervention could keep weakness limited. The currency intervention doesn’t solve all of the currency’s issues, but it also means there could be more safe-haven appeal for the JPY, so seeing how risk holds up after Friday’s flush across major asset classes will be important to watch. POSSIBLE BULLISH SURPRISES Catalysts that push US10Y lower (less hawkish Fed, lower UC CPI , lower growth) could trigger bullish reactions from the JPY. Any catalyst that triggers meaningful downside in key commodities like Oil (deteriorating demand outlook, ease in supply shortage) could trigger bullish JPY reactions. Any additional intervention from the BoJ or MoF. POSSIBLE BEARISH SURPRISES Any catalysts that push US10Y higher (more aggressive Fed, higher US CPI , better growth) could pressure the JPY. Catalyst that triggers meaningful upside in Oil (deteriorating demand, increased supply) could trigger JPY downside. Reluctance from BoJ and MoF for intervening around the 145 level in USDJPY could spark speculative buying. BIGGER PICTURE The fundamental outlook remains bearish for the JPY due to yield differentials and the impact of a weaker JPY on the current account balance. As long as US10Y remain elevated and the BoJ stays stubbornly dovish and no currency intervention occurs, the bias remains lower. But take note of positioning which means we don’t want to chase the JPY lower, especially with the risk of further currency intervention should the JPY continue to weaken. The best opportunities for now remain short-term focused on further intervention or strong moves lower in US yields.
by thunderpips
1
USD JPY - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing acceleration in August, the Fed is under pressure to continue hiking rates and ramping up QT. The bank made its third 75bsp at the Sep meeting and pushed up their 2023 terminal rate projection to 4.6%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). It was a choppy week for the USD, with entertaining ‘Fed Pivot’ narratives trying to make sense of the price action. In the week ahead, all eyes turns to the week’s main event which is Thursday’s September US CPI report. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced in for the Fed and the USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a higher than 5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. In the upcoming week markets will only have eyes for one data point and that will be the US September CPI data released on Thursday. With expectations of a higher Core CPI YY but expectations of a lower Headline CPI YY it seems risky to trade into this event. JPY FUNDAMENTAL OUTLOOK: BEARISH BASELINE Japan’s government finally had enough in the past week by intervening to sell USD and buying JPY for the first time since 1998 two weeks ago. Officials were smart enough to keep details low, which has left JPY sellers cautious of more intervention. In recent weeks, yield differentials of course have been the biggest driver for the JPY with the BoJ keeping 10-year JGB yields capped at 0.25% with yield curve control while other central banks are hiking rates aggressively. Thus, right now the JPY is pressured as yields have soared for the sky, but the threat and risk of further intervention could keep weakness limited. The currency intervention doesn’t solve all of the currency’s issues, but it also means there could be more safe-haven appeal for the JPY, so seeing how risk holds up after Friday’s flush across major asset classes will be important to watch. POSSIBLE BULLISH SURPRISES Catalysts that push US10Y lower (less hawkish Fed, lower UC CPI , lower growth) could trigger bullish reactions from the JPY. Any catalyst that triggers meaningful downside in key commodities like Oil (deteriorating demand outlook, ease in supply shortage) could trigger bullish JPY reactions. Any additional intervention from the BoJ or MoF. POSSIBLE BEARISH SURPRISES Any catalysts that push US10Y higher (more aggressive Fed, higher US CPI , better growth) could pressure the JPY. Catalyst that triggers meaningful upside in Oil (deteriorating demand, increased supply) could trigger JPY downside. Reluctance from BoJ and MoF for intervening around the 145 level in USDJPY could spark speculative buying. BIGGER PICTURE The fundamental outlook remains bearish for the JPY due to yield differentials and the impact of a weaker JPY on the current account balance. As long as US10Y remain elevated and the BoJ stays stubbornly dovish and no currency intervention occurs, the bias remains lower. But take note of positioning which means we don’t want to chase the JPY lower, especially with the risk of further currency intervention should the JPY continue to weaken. The best opportunities for now remain short-term focused on further intervention or strong moves lower in US yields.
by thunderpips
6
USD JPY - FUNDAMENTAL DRIVERSUSD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing acceleration in August, the Fed is under pressure to continue hiking rates and ramping up QT. The bank made its third 75bsp at the Sep meeting and pushed up their 2023 terminal rate projection to 4.6%. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction with incoming data for both the USD and US10Y (good data expected to be supportive for the USD while bad data is expected to pressure the USD). It was a choppy week for the USD, with entertaining ‘Fed Pivot’ narratives trying to make sense of the price action. In the week ahead, all eyes turns to the week’s main event which is Thursday’s September US CPI report. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced in for the Fed and the USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a higher than 5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. In the upcoming week markets will only have eyes for one data point and that will be the US September CPI data released on Thursday. With expectations of a higher Core CPI YY but expectations of a lower Headline CPI YY it seems risky to trade into this event. JPY FUNDAMENTAL OUTLOOK: BEARISH BASELINE Japan’s government finally had enough in the past week by intervening to sell USD and buying JPY for the first time since 1998 two weeks ago. Officials were smart enough to keep details low, which has left JPY sellers cautious of more intervention. In recent weeks, yield differentials of course have been the biggest driver for the JPY with the BoJ keeping 10-year JGB yields capped at 0.25% with yield curve control while other central banks are hiking rates aggressively. Thus, right now the JPY is pressured as yields have soared for the sky, but the threat and risk of further intervention could keep weakness limited. The currency intervention doesn’t solve all of the currency’s issues, but it also means there could be more safe-haven appeal for the JPY, so seeing how risk holds up after Friday’s flush across major asset classes will be important to watch. POSSIBLE BULLISH SURPRISES Catalysts that push US10Y lower (less hawkish Fed, lower UC CPI, lower growth) could trigger bullish reactions from the JPY. Any catalyst that triggers meaningful downside in key commodities like Oil (deteriorating demand outlook, ease in supply shortage) could trigger bullish JPY reactions. Any additional intervention from the BoJ or MoF. POSSIBLE BEARISH SURPRISES Any catalysts that push US10Y higher (more aggressive Fed, higher US CPI, better growth) could pressure the JPY. Catalyst that triggers meaningful upside in Oil (deteriorating demand, increased supply) could trigger JPY downside. Reluctance from BoJ and MoF for intervening around the 145 level in USDJPY could spark speculative buying. BIGGER PICTURE The fundamental outlook remains bearish for the JPY due to yield differentials and the impact of a weaker JPY on the current account balance. As long as US10Y remain elevated and the BoJ stays stubbornly dovish and no currency intervention occurs, the bias remains lower. But take note of positioning which means we don’t want to chase the JPY lower, especially with the risk of further currency intervention should the JPY continue to weaken. The best opportunities for now remain short-term focused on further intervention or strong moves lower in US yields.
by thunderpips
3
USDJPY 4hour Analysis October 9th, 2022USDJPY Bullish Idea Weekly Trend: Bullish Daily Trend: Bullish 4hour Trend: Bullish Trade scenario 1: We are still bullish on UJ and it looks like we will continue with this trend through the week. Ideally, price action forms a higher low near 145.000 support with strong bullish variations to follow. Look to target higher toward our -27% fib level. Trade scenario 2: For us to consider UJ bearish again the first move we need to see is a break back below 145.000 support.
Long
by ForexLeague