USD/JPY ANALYSIS
JAPANESE YENFUNDAMENTAL BACKDROP
The associated safe-havenJapanese Yen rallied this week with the Evergrande disaster gaining traction and devastating international markets. Traders are exhibiting threat averse conduct which can be untimely however desire to err on the facet of warning. The Japanese bond market echoes this sentiment as international funding will increase (see graphic beneath) and will proceed ought to the present unsure macroeconomic backdrop endure.
Supply: Refinitiv
JAPANESE AND U.S. CENTRAL BANKS TO MEET TOMORROW
In response to Refinitiv, there’s a 97.79% likelihood of the BoJ maintaining charges unchanged which then shifts focus to the Federal Reserve assembly tomorrow – see calendar beneath.
Supply: DailyFX economic calendar
Markets shall be tuned in to an impending taper which and steerage on how the Fed will go about latest knowledge which embody inflation figured far exceeding the common 2% goal (yellow), lackluster jobs data (purple) and lingering COVID-19 considerations (pink) – confer with graphic beneath. This might delay a faster begin to tapering present asset purchases and help further Yen energy.
Supply: Refinitiv
USD/JPY TECHNICAL ANALYSIS
USD/JPY Each day Chart:
Chart ready by Warren Venketas, IG
The each day USD/JPY chart above outlines the weeks fall as price action exams the symmetrical triangle help line (black). Prior makes an attempt to interrupt and shut beneath the 38.2% Fibonacci 109.25 (Fibonacci taken from June 2015 excessive to June 2016 low) degree have been unsuccessful however a affirmation shut beneath this space of confluence might open up additional draw back alternative.
Key resistance ranges:
- 110.00
- 100-day Exponential Shifting Common (EMA) – yellow
Key help ranges:
- 109.25 – 38.2% Fibonacci degree
- 109.00
- 108.72 – August swing low
IG CLIENT SENTIMENT FAVORS SHORT-TERM DOWNSIDE
IGCS reveals retail merchants are at present internet lengthy on USD/JPY, with 55% of merchants at present holding lengthy positions (as of this writing). At DailyFX we take a contrarian view on sentiment which suggests additional draw back on the pair.
— Written by Warren Venketas for DailyFX.com
Contact and comply with Warren on Twitter: @WVenketas
