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USD/JPY is at an important juncture. 105 - 105.30 (76.4% retracement of the Trump rally) is the last stronger chart-based support area ahead of the big 100. A successful break will probably see a quick markdown to 102.5 - 103. FOMC decision is a potential catalyst. A hike is a done deal but even if they explicitly signal another three hikes this year (unlikely), I don't think that will stop the decline for long, if at all. 95 before winter is not all that unfathomable anymore.
Community Blog
USD/JPY rallies as FOMC upgrades tightening path
FOMC didn't disappoint yesterday. Federal funds rate corridor was hiked by 25 basis points, as widely expected. Even though the bank remains cautious, the dot plot was upgraded to reflect three hikes (from two in September) in 2017. That was enough for the dollar to rally.
USD/JPY blasted through the strong resistance (now support) area between 115.50 and 116 and added nearly 190 pips on the day. The momentum carried on overnight with 118 proving to be a bit of a hurdle. Closing the year in gree…
USD/JPY blasted through the strong resistance (now support) area between 115.50 and 116 and added nearly 190 pips on the day. The momentum carried on overnight with 118 proving to be a bit of a hurdle. Closing the year in gree…
Aussie settles near 0.75 level
0.75 is the equilibrium level for the Aussie as we await the FOMC meeting. Lacklustre Australian data overnight (HPI, NAB Business Confidence) but some better than expected Chinese data (Industrial Production, Retail Sales) were unable to move it.
The pair has been bumping against the level for the third week. 200 DMA and now 50 DMA are protecting the upside with 100 DMA not far away. Tomorrow is a big day and I think when the dust settles the pair will move through the level to retest longer-te…
The pair has been bumping against the level for the third week. 200 DMA and now 50 DMA are protecting the upside with 100 DMA not far away. Tomorrow is a big day and I think when the dust settles the pair will move through the level to retest longer-te…
Ahead of FOMC
Economic calendar from USA isn't eventfull but contains the most important even from whole month - FOMC meeting (Tuesday-Wednesday). I expect that this meeting will sustain actuall interest rate at 0,25 - 0,50%. Last wave of weaker then expected macrodata suggest that FED isn't going to rise rates quickly. On the other hand there is a lot of possitive comments from FOMC members which gives a thought that next rise could be made in December this year.
In the upcoming FOMC meeting we should hear t…
In the upcoming FOMC meeting we should hear t…
Fed stands pat
Yesterday's FOMC decision proved to be a non-event. The committee made a couple of adjustments to the statement but the message remained basically the same and there was no hint of a timing of the next rate hike.
The market did what it usually does after high impact releases that change nothing - it ran stops on both sides before returning to pre-release range. Tomorrow's U.S. Q1 Advance GDP will likely provide a better signal as to the direction.
The market did what it usually does after high impact releases that change nothing - it ran stops on both sides before returning to pre-release range. Tomorrow's U.S. Q1 Advance GDP will likely provide a better signal as to the direction.
Fundamentals
FOMC
Today we have FOMC Meeting Minutes from the US which is possibly a big release at 7pm London time. We will be looking out for any clear tone of hawkishness or dovishness in the minutes to gauge the next leg of greenback direction.
If the minutes show more discussion in line with what other Fed speakers such as Bullard have been saying, on the hawkish side, then the dollar will rise. If the minutes however focus on the cautious attitude that was conveyed via the statement then the USD may …
Swissie pares post-FOMC losses
Swissie broke below 200 DMA last week, after FOMC left federal funds rate unchanged and released a dovish rate statement. Second day of selling failed to project past February low (~0.9660) and the pair bounced instead.
November - March channel bottom is supported by the broken 2003 - 2015 (down) trendline with the 2011- 2016 (up) trendline coming in from below. 200 DMA shall now act as a resistance.
November - March channel bottom is supported by the broken 2003 - 2015 (down) trendline with the 2011- 2016 (up) trendline coming in from below. 200 DMA shall now act as a resistance.
Some Hawkish Comments from FOMC Members
There are some hawkish comments from two different FOMC members this weekend. The first is John Williams, President of the Federal Reserve Bank of San Francisco. He says that the call to keep rates steady in September was a close one and he expects rates to rise later this year. More on this HERE.
James Bullard, President of the Federal Reserve Bank of St. Louis, says that he would've voted for a rate rise and added that the case for policy normalization is strong because the FOMC objectives hav…
James Bullard, President of the Federal Reserve Bank of St. Louis, says that he would've voted for a rate rise and added that the case for policy normalization is strong because the FOMC objectives hav…
Fed holds rates
At its two day meeting that concluded yesterday, FOMC decided to leave Federal Funds Rate in 0.0% - 0.25% range. Disinflationary implications of slowing global growth, oil weakness and US dollar strength are the main reasons why the committee stood pat.
The dollar was sold across the board but it retraced most of its losses against the commodity currencies. Euro was the winner of the day as it rose nearly a cent and a half. Swissie and Cable both moved close to 100 pips on the day and Yen about …
The dollar was sold across the board but it retraced most of its losses against the commodity currencies. Euro was the winner of the day as it rose nearly a cent and a half. Swissie and Cable both moved close to 100 pips on the day and Yen about …
FOMC Leads to Dollar Sell-Off
The long awaited FOMC meeting lead to a Dollar sell-off. The Fed didn't raise rates (this was expected) but they also sounded way more dovish this time around, citing foreign risks to growth and low inflation. Chairwoman Yellen also expressed her opinion that the labor market is far from full employment, if you take into account other factors like under-employment.
This was a slight surprise for me since I expected a more hawkish statement. I longed the USD/JPY in the aftermath of the announceme…
This was a slight surprise for me since I expected a more hawkish statement. I longed the USD/JPY in the aftermath of the announceme…