USDJPY On Watch: FOMC & BOJ This Week
FOMC On Watch
USDJPY is on watch today as traders brace for the July FOMC meeting. The pair has continued to push higher recently despite verbal warnings from Japanese authorities and rising speculation around intervention risks. However, despite the ongoing slide in the Yen, we’ve yet to see any fresh intervention, begging the question: how far can JPY slide before we see any action taken? Today’s FOMC meeting could provide the catalyst for a fresh rally in USD if the meeting is seen underscoring hawkish risks. In particular, traders will be looking for comments on US inflation risks if the Iran conflict persists and oil prices remain elevated.
BOJ Meeting On Friday
Beyond today’s FOMC meeting, attention will then turn to Friday’s BOJ meeting. Despite the slide in the Yen, the broad expectation is that the bank will keep rates on hold. Kyodo News reported this week, citing sources close to the BOJ, that the bank will revise its growth forecasts higher for the current fiscal year premised on robust domestic activity and resilience in the labour market. This could give the meeting a hawkish tilt. However, without any clear tightening signals from the bank that alone is unlikely to be enough to lift the Yen.
Technical Views
USDJPY
The rally in USDJPY has seen the market breaking above the 162.61 level, continuing higher within the bull channel. While price remains above 162.61, focus is on a continued push higher while if we correct back below that level, 160.49 and the bull channel lows will be the next support to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.