Home Forex Markets After the U.S. respite, it may usher in a bigger surge, USDJPY USD/JPY hits a 24-year high

After the U.S. respite, it may usher in a bigger surge, USDJPY USD/JPY hits a 24-year high

by WOOWinvest
0 comment
After the U.S. respite, it may usher in a bigger surge, USDJPY USD/JPY hits a 24-year high

• Powell’s hawkish speech at Jackson Hole revives dollar

• Fundamentally, the Fed and the Bank of Japan are moving further apart – the yen remains vulnerable

• Risk events: Fed and Bank of Japan speeches, US consumer confidence and NFP nonfarm payrolls

Fed’s hawkish stance will further widen interest rate differentials

Interest rate differentials play an important role in international capital flows, and the Fed’s renewed commitment to curb inflation has opened the door for further gains in USD/JPY.

The Fed’s latest pledge to keep raising rates raises the prospect of a wider divergence between U.S. and Japanese rates, often referred to as a “carry trade.”

In late 2021, when the U.S. considered the possibility of a rate hike in March 2022, the USD/JPY pair became a prime example of carry trade. Since raising rates, the Fed has raised rates from a range of 0%-0.25% to 2.25%-2.5%, creating opportunities to sell yen and buy dollars.

USD/JPY rallied on Friday and extended that momentum into Monday, and could attempt a fresh 24-year high. The recent rally in the dollar and the dovish stance of the Bank of Japan opened the door for the pair to break above the July and yearly high of 139.40. The MACD indicator is showing positive upward momentum, while the relative RSI indicator (Relative Strength Index) has not yet entered overbought territory, which means we could still see the pair struggling to make new highs.

Resistance was seen at the yearly high of 139.40, followed by September 1998 at 139.91. However, the pair is lower today, suggesting that USD/JPY may need to consolidate before the next move higher. From a fundamental perspective, the prospect of a new high for USD/JPY remains constructive as the Fed continues to aggressively hike rates and the Bank of Japan remains committed to a supportive monetary framework for the Japanese economy, allowing the JPY to further depreciation.

👍👍USD/JPY may usher in a new wave of big gains. The following trend trading strategy guidelines must be a learning manual that should not be missed! You will learn how to catch the trend and trade with the general trend, and you will also learn how to formulate the corresponding trading strategy. Click below to learn for free now! 👏👏

USD/JPY daily chart

source:TradingView,Depend onRichard Snowprepared by

Future high materiality risk events

announced today in Japan7Unemployment rate for the month(2.6%)After the unchanged data, we turn our attention to speeches by the Fed’s Barkin and Williams, as well as another US consumer confidence index, which is expected to be higher than the previous reading.

As for tomorrow, we’ll see Japan’s retail sales data and the Bank of Japan’s speech.Fed officials’ speeches will continue this week, starting with Loretta on Wednesday·meester(Loretta Mester)then Raphael on Thursday·Bostic(Raphael Bostick).

The main event of the week is Friday’s US nonfarm payrolls data, which we expect8Month economy will increase3010,000 jobs, the unemployment rate is expected to remain at3.5%. The labor market presents another potential opportunity for the narrative of the Fed’s stance if we see disappointing unemployment data.

Market traders pay attention to financial data, but don’t necessarily take advantage of it.The DailyFX team has prepared the interpretation and application of 5 important economic data indicators, of course, including the CPI and non-agricultural data that the Fed is concerned about! Learn blockbuster economic data analysis for free now! Let yourself grasp the trading opportunities and interpret the wealth code! 👏

Previously, this statement was7moonCPIThe slight cooling began, sparking widespread speculation of a slowdown in Fed tightening. Federal Reserve Chairman Jerome Powell’s speech in Jackson Hole nearly dispelled any notion of a Fed slowing, reiterating the central bank’s commitment to lower inflation at the expense of economic growth and a deteriorating labor market.

After the U.S. respite, it may usher in a bigger surge, USDJPY USD/JPY hits a 24-year high

After the U.S. respite, it may usher in a bigger surge, USDJPY USD/JPY hits a 24-year high

The content on this page is for general market commentary only and may not constitute investment advice of any kind (tax, legal, accounting). This article does not constitute an invitation or recommendation for direct investment in specific financial products. The content is for reference only. Readers should not rely on the information in this document, nor should its actions and omissions be relied upon. We are not responsible for the results of any person’s actions or omissions based on this article. We make no warranties as to the accuracy of the content provided or the adequacy of the information. This article is not intended for distribution within the territory of the People’s Republic of China (excluding Hong Kong, Macau and Taiwan for this purpose), except as permitted by the applicable laws of the People’s Republic of China.

Copyright Notice: Except for the purpose of viewing the information on this website, or as permitted by applicable law or these Terms and Conditions, no one may copy, use, upload, link, or publicly perform in any way to third parties without our specific written permission , publish or transmit any information or content on this website. We reserve the right to further investigate the legal responsibilities of the relevant actors for the infringing acts of unauthorized reprinting. If you have business cooperation needs such as market promotion and resource exchange, please contact us.

element inside the element. This is probably not what you meant to do! Load your application’s JavaScript bundle inside the element instead.

You may also like

Leave a Comment

Our Mission is to help you make better trading decisions by providing actionable investing content, comprehensive tools, educational resources and assist you in making more money in the stock market.

Latest News


Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

@2022 – All Right Reserved. Designed and Developed by WOOW Invest

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy