Will Fed Chair Powell proceed is hawkish rhetoric?
US financial knowledge awaits as international slowdown considerations develop.
145.00 on the playing cards for USD/JPY bulls?
Advisable by Warren Venketas
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JAPANESE YEN FUNDAMENTAL BACKDROP
The Japanese Yen has had a tricky time final week and heads into the week on an general weaker notice as a consequence of Fed Chair Jerome Powell’s hawkish Testimony in addition to Friday’s decline in Japanese CPI. Falling inflation will make it tough for the Financial institution of Japan (BOJ) to shift from its ultra-loose financial coverage however adjustments to Yield Curve Management (YCC) continues to be a chance.
The week forward is usually taken up by US centric knowledge (see financial calendar under) together with the core PCE print which is the Fed’s most popular measure of inflation. Mr. Powell is scheduled to talk once more and is more likely to proceed on his coverage tightening path versus a fee maintain as cash market possibilities transfer ever nearer to a 25bps hike in July. Different key releases embody sturdy items orders, GDP and Michigan client sentiment that may permit for a extra clearer image of the broader US economic system. Ought to knowledge level to a slowing economic system, recessionary fears could creep again in and will play into the arms of the protected haven Yen.
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ECONOMIC CALENDAR (GMT +02:00)
Supply: DailyFX financial calendar
TECHNICAL ANALYSIS
USD/JPY DAILY CHART
Chart ready by Warren Venketas, IG
USD/JPY exhibits value motion has been following the golden cross (inexperienced) sign pushing to recent 2023 highs. Whereas the pair is in overbought territory as proven by the Relative Power Index (RSI), there might nonetheless be extra to go in direction of the 145.00 psychological degree earlier than a pullback decrease.
Key resistance ranges:
Key help ranges:
IG CLIENT SENTIMENT: BULLISH
IGCS exhibits retail merchants are presently internet SHORT on USD/JPY, with 72% of merchants presently holding brief positions (as of this writing). At DailyFX we take a contrarian view on sentiment leading to a short-term upside disposition.
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