USD/JPY swing low in place?

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Hawkish Fed members have helped to push US yields and the dollar higher. We saw some volatility across yen pairs on Friday after the favoured candidate to success Kuroda (and a dove) pulled out of the nomination, and Japan’s PM backed a more hawk candidate. If a hawk takes the helm, the yen will likely strengthen on hopes that the BOJ will abandon YCC. But until that happens, the BOJ remain dovish – and USD/JPY continues to appear oversold to my eyes.

A bullish pinbar formed on Friday after a failed attempt to break below the 130.67 high, and we’re now looking for bullish momentum to return and taker the yen towards the 200-day EMA around 133.75.

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ملاحظة

Yet more hawkish comments from an FOMC member and stronger-than-expected inflation report has helped USD/JPY push to a 27-dayhigh, despite the BOJ officially nominating a new BOJ Governor candidate who may not be as dovish as Kuroda.

Fed fund futures are now pricing in a ~53.1% chance of a third 25bp hike in June, which would take the terminal rate to 5.5%.

Onwards and upwards for USD/JPY?

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أغلقت الصفقة: تم الوصول للهدف

As the original target around the 161.8% / 200-day EMA has been reached (and breached) we have created a new trade idea here: