Awaiting USDJPY rally to new highs for the year
The USDJPY has been trading sideways over the last couple of days but Japanese Consumer Price Index data for October may prompt a break out. With inflation tracking at an annual rate that is only half the Bank of Japan’s target, expectations of even more easing will arise if today’s CPI number drops further. Earlier on, an auction of two-year government bonds is likely to produce a yield of around zero, if not negative.
There is no economic data out of the US today that will impact on this cross. Meanwhile the JPY has recently hit a 30 year low. My analysis of that situation is shown here.
Management and risk description
The US dollar completed its requisite corrective structure on yesterday’s low about 117.25 in my targeted support, and whilst it is now holding at 117.50/117.25, I am looking for a rally back toward the 118.95 level (this month’s high), en route to 120.60 over the coming days.
Entry: Buying USDJPY today at about the 117.65 level
— Edited by Robert Ryan
For more on forex click here.
Non-independent investment research
This investment research has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further it is not subject to any prohibition on dealing ahead of the dissemination of investment research. Saxo Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. » Read more