USD/JPY: Bid and Attempting Territory on 110 Again
USD/JPY is losing the conviction on the 110 handle having been unable to progress to the mid point and has stalled at 110.37 highs.
USD/JPY made lows of 109.72 earlier, but has since picked itself up to
test the 110 level again and bid in Tokyo within May's up trend from
105.86 lows. The FOMC minutes gave the dollar a lift towards the end of
the week with slightly more assertive language despite data not being
quite there and markets coming to a conclusion that there is still more
to do on that front before the Fed would rate hikes, but nevertheless
with June very much a live date for a potential rate rise.
Overnight, there were subsequent comments from NY Fed's Dudley who said
June and July were both live, but he explained also that there Brexit
risks suggesting to markets that July may be favoured. Analysts at
Westpac explained that Dudley's views tend to be very much in line with
the Board of Governors, especially Chair Yellen.
"Hawk (and non-voter) Lacker stuck with his extreme view favouring four
hikes this year. Vice Chair Fischer declined to comment on monetary
policy. A June Fed hike remains a 30% chance, while November is now 100%
priced in," added the analysts.
USD/JPY levels
Valeria Bednarik,
chief analyst at FXStreet explained that the short term picture has
turned bearish, "In the 4 hours chart, the price remains well above its
moving averages that anyway maintain bearish slopes, whilst the
technical indicators extended its decline, but remain within bullish
territory." However, she also noted, "Despite the late retracement, the
pair remains above 109.55, the 61.8% retracement of its latest bullish
run, and therefore with chances of extending its gains up to 110.60. "