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.
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. "