3 Sep 2013
USD/JPY rages higher as US likely hawkishness is paired with Japanese desire to stimulate
FXstreet.com (Barcelona) - A hawkish Fed and dovish BOJ seem to be the dynamic on which USD/JPY traders are basing their decisions. Only the data can change this dynamic this week.
USD/JPY being pressured higher by bullish central bank forces
Here’s what USD/JPY traders and investors seem to be thinking at this point:
• Any fiscal austerity measures being promoted by the Japanese powers-that-be are likely to be matched by monetary dovishness.
• The US FOMC, meanwhile, appears to be headed towards a September start to their “tapering” program. They surely will be watching this week’s data carefully to help them make a wise decision.
This week, as no US / Syria decision is likely to be made until the US Congress votes next week, the data flow out of Japan and the US will drive the trading action in USD/JPY. The two flagship announcements this week will be the Bank of Japan’s interest rate decision on Thursday and the US’s monthly Employment Report.
Technical outlook for USD/JPY
Technicians are pointing to key “correction resistance” at 100.12 to 100.35 as the next upside target for USD/JPY. They do point out, however, that Yen futures have already broken down below intermediate-term support – thereby increasing the odds of USD/JPY breaking out. Support comes in at 98.50 and 98 for USD/JPY.
USD/JPY being pressured higher by bullish central bank forces
Here’s what USD/JPY traders and investors seem to be thinking at this point:
• Any fiscal austerity measures being promoted by the Japanese powers-that-be are likely to be matched by monetary dovishness.
• The US FOMC, meanwhile, appears to be headed towards a September start to their “tapering” program. They surely will be watching this week’s data carefully to help them make a wise decision.
This week, as no US / Syria decision is likely to be made until the US Congress votes next week, the data flow out of Japan and the US will drive the trading action in USD/JPY. The two flagship announcements this week will be the Bank of Japan’s interest rate decision on Thursday and the US’s monthly Employment Report.
Technical outlook for USD/JPY
Technicians are pointing to key “correction resistance” at 100.12 to 100.35 as the next upside target for USD/JPY. They do point out, however, that Yen futures have already broken down below intermediate-term support – thereby increasing the odds of USD/JPY breaking out. Support comes in at 98.50 and 98 for USD/JPY.