USD/JPY Remains Capped by 104.20 Hurdle Ahead of Yellen Speech

Talking Points:

USD/JPY Stands during Risk for Larger Pullback as Pair Remains Capped by 104.20 Hurdle.

AUD/USD Comes Up Against 2016 Trendline Support; Triangle/Wedge Formation in Focus.

DailyFX

USD/JPY Daily

USD/JPY Daily Chart

Chart – Created Using Trading View

  • USD/JPY clears a Sep high (104.32), a span might continue to pullback from a uninformed monthly high of 104.63 should a span symbol another unsuccessful try to tighten above a near-term jump around 104.20 (61.8% retracement); might see a bearish trend from progressing this year start to reassert itself as a Federal Open Market Committee (FOMC) Minutes appears to have had a singular impact in conversion interest-rate expectations.
  • The U.S Advance Retail Sales news and a U. of Michigan Confidence consult might boost a bullish view surrounding a greenback as a total are approaching to paint an softened opinion for a world’s largest economy, though uninformed comments from Chair Janet Yellen might moderate a seductiveness of a haven banking should a executive bank conduct mostly validate a wait-and-see proceed for financial policy.
  • Still watchful for a tighten above 104.20 (61.8% retracement) to open adult a subsequent topside aim around 105.40 (50% retracement), though a pierce subsequent 102.70 (38.2% retracement) accompanied by a mangle of trendline support would lift a risk of saying a pierce behind towards a Sep low (100.08).

AUD/USD Daily

AUD/USD Daily Chart

Chart – Created Using Trading View

  • AUD/USD might continue to give behind a allege from a Sep low (0.7442) as a span carves a near-term array of reduce highs lows, though a aussie-dollar might continue to face range-bound conditions over a entrance days/weeks should it safety a wedge/triangle arrangement carried over from progressing this year; a some-more suggestive pull off of trendline support might keep a sell rate afloat forward of a subsequent Reserve Bank of Australia (RBA) process assembly on Nov 1.
  • With RBA Governor Philip Lowe scheduled to broach a debate subsequent week, a uninformed collection of executive bank tongue might drag on interest-rate expectations as a executive bank anticipates a low-inflationary sourroundings ‘to sojourn a box for some time,’ though some-more of a same denunciation might column adult a Australian dollar over a days forward as marketplace participants scale behind bets for additional financial support.
  • A shutting cost subsequent 0.7530 (38.2% expansion) might open adult a Sep low (0.7442), that lines adult with a subsequent downside aim around 0.7450 (38.2% retracement).

DailyFX SSI

  • The DailyFX Speculative Sentiment Index (SSI) shows a sell throng stays net-long USD/JPY given Jul 21, with a ratio still off of a 2016 impassioned of +6.03, while traders have flipped to net-long AUD/USD entrance into a second full-week of October.
  • USD/JPY SSI now sits during +1.77 as 64% of traders are long, with brief positions 19.3% reduce from a prior week, while open seductiveness stands 8.8% subsequent a monthly average.
  • AUD/USD SSI now sits during +1.14 as 53% of traders are long, with brief positions 17.0% reduce from a prior week, while open seductiveness stands 15.7% subsequent a monthly average.
  • Open seductiveness stays on a lighter finish going into a finish of a week, with even a many renouned FX pairs highlighting a miss of marketplace participation.

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— Written by David Song, Currency Analyst

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