USD/JPY Weakness to Persist on Cautious Fed Rhetoric

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USD/JPY Weakness to Persist on Cautious Fed Rhetoric.

AUD/USD Initiates Bearish Series; Risks Larger Pullback Ahead of U.S. CPI.

DailyFX TableUSD/JPY

USD/JPY struggles to safety a allege from a commencement of a year as a Bank of Japan (BoJ) reduced a purchases of long-term holds underneath a Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control, and a span stands during risk of melancholy a range-bound cost movement from Dec should a flourishing array of Fed officials adopt a discreet opinion for a U.S. economy.

With small sum concomitant a BoJ announcement, a composition in a asset-purchase module competence be a one-off eventuality as acceleration runs good subsequent a 2% target, and uninformed comments entrance out of a Federal Reserve competence eventually lean a dollar-yen sell rate as Minneapolis Fed President Neel Kashkari, Chicago Fed President Charles Evans, Dallas Fed President Robert Kaplan, St. Louis Fed President James Bullard, New York Fed President William Dudley, Philadelphia Fed President Patrick Harker and Boston Fed President Eric Rosengren are all scheduled to pronounce over a entrance days.

Fed Fund Futures

Even yet Fed Fund Futures prominence a larger than 60% luck for a Mar rate-hike, muted information prints entrance out of a U.S. economy competence inspire a flourishing array of executive bank officials to strike a discreet tinge as ‘some participants celebrated that there was a probability that acceleration competence stay subsequent a design for longer than they now expected.’ In turn, a slew of dovish tongue competence beget a bearish greeting in USD/JPY, with a sell rate during risk of forward behind towards a bottom of a stream operation as marketplace participants scale behind bets for 3 Fed rate-hikes in 2018.

USD/JPY Daily Chart

USD/JPY Daily Chart

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  • USD/JPY appears to be stranded in a forward triangle, with a downside targets entrance behind on a radar as a span snaps a array of aloft highs lows from a prior week.
  • Break/close subsequent a 112.40 (61.8% retracement) to 112.50 (38.2% retracement) segment raises a risk for a pierce behind towards a monthly-low (112.06), with a subsequent segment of seductiveness entrance in around 111.10 (61.8% expansion) to 111.60 (38.2% retracement), that mostly lines adult with a December-low (111.41).
  • Closely tracking a Relative Strength Index (RSI) as it snaps a bullish arrangement from late-November, with a oscillator fluctuating a bearish trend carried over from a summer months.


The near-term liberation in AUD/USD appears to have stalled forward of a October-high (07836), with a span during risk of giving behind a miscarry from a December-low (0.7501) as it starts to carve a array of reduce highs lows.

It seems as yet a new resilience in AUD/USD has run a march as a Relative Strength Index (RSI) finally falls behind from overbought territory, yet pivotal developments entrance out of a U.S. competence hint a bullish greeting in a aussie-dollar sell rate as a Consumer Price Index (CPI) is approaching to delayed to an annualized 2.1% from 2.2% in November. Even yet a core rate of acceleration is approaching to reason solid during 1.7% per annum, signs of resigned cost pressures competence furnish headwinds for a greenback as it rattles bets for an approaching Fed rate-hike. Interested in carrying a broader contention on stream marketplace themes? Sign adult and join DailyFX Currency Analyst David Song LIVE for an event to plead intensity trade setups!

AUD/USD Daily Chart

AUD/USD Daily Chart

  • AUD/USD competence bluster a monthly opening operation as it carves a bearish sequence, with a miss of movement to reason above a 0.7850 (38.2% retracement) to 0.7860 (61.8% expansion) threshold lifting a risk for serve waste generally as a Relative Strength Index (RSI) slips subsequent 70 and flashes a text sell-signal.
  • First segment of seductiveness comes in around a 0.7720 (23.6% retracement) to 0.7770 (61.8% expansion) region, with near-term support sitting around 0.7650 (38.2% retracement).

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— Written by David Song, Currency Analyst

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