USD/JPY Eyes Topside Targets Ahead of Trump & Abe Meeting

Talking Points:

EUR/USD on Brink of Further Losses as Greek Saga Continues; Draghi Sticks to Dovish Script.

USD/JPY Clears Near-Term Range, Eyes Topside Targets Ahead of Trump Abe Meeting.

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EUR/USD Daily Chart

Chart – Created Using Trading View

  • The unsuccessful try to exam a Dec high (1.0873) keeps a near-term opinion for EUR/USD slanted to a downside, with a span during risk of fluctuating a new array of lower-highs generally as a Greece-debt saga continues to criticise a fortitude of a financial union; will be gripping a tighten eye on a RSI as it threatens trendline support and appears to be highlighting a bearish trigger, with a oscillator mostly responding to a downward trend carried over from 2015.
  • Renewed concerns surrounding a periphery countries might coax a flourishing difference within a European Union (EU) generally as German Finance Minister Wolfgang Schedule manners out a Greek debt-cut and warns a Euro sell rate is ‘too low’ for a region, though a European Central Bank (ECB) might keep a doorway open to serve extend a quantitative-easing (QE) module as President Mario Draghi pledges to safety an accommodative process position until his reign expires in 2019.
  • In turn, a bearish RSI trigger accompanied by a break/close subsequent a Fibonacci overlie around 1.0660 (50% expansion) to 1.0680 (78.6% expansion) might open adult a subsequent downside segment of seductiveness around 1.0600 (23.6% expansion) followed by 1.0470 (38.2% expansion) to 1.0500 (50% expansion).


USD/JPY Daily Chart

Chart – Created Using Trading View

  • With U.S. President Donald Trump and Japan Prime Minister Shinzo Abe report to accommodate on Friday, headlines emanating from a private talks might shake adult a near-term opinion for USD/JPY, though a span looks staid for a incomparable liberation as it breaks out of a slight operation from progressing this week; a Relative Strength Index (RSI) highlights a identical energetic as it threatens a bearish arrangement carried over from late-December, and a spin in a oscillator accompanied by a pickup in a tellurian benchmark equity indices shifts a near-term concentration behind towards a topside as a dollar-yen appears to be entrance off of channel support.
  • Indeed, a broader opinion for USD/JPY stays cramped by a forward channel from December, with a span during risk of confronting range-bound conditions forward of a Fed’s subsequent quarterly assembly in Mar generally as Chair Janet Yellen and Co. seem to be in no rush to serve normalize financial policy; in turn, risk view might continue to change a dollar-yen sell rate via a initial entertain as a Bank of Japan (BoJ) takes a identical position and endorses a wait-and-see proceed for financial policy.
  • Nevertheless, a three-month aged arrangement might seem some-more like a long-term bull-flag arrangement as a Fed appears to be on march to exercise additional aloft borrowing-costs over a entrance months, with Fed Fund Futures still pricing a larger than 60% luck for a Jun rate-hike.
  • A shutting cost above 112.90 (38.2% retracement) might open adult a subsequent topside area of seductiveness around 114.00 (23.6% retracement) to 114.30 (23.6% retracement) followed by 116.00 (78.6% expansion) to 116.30 (23.6% retracement).

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— Written by David Song, Currency Analyst

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