USD/JPY continues to brew traps on both sides of the pair as last week's push up to fresh three-month highs has been followed by a decisive snap back in the pair. The drive behind the move is also of interest, as Japanese election results over the weekend haven't been completely digested by Japanese markets, as they were closed on Monday for a public holiday. So the next 24 hours will be key for seeing the way that this theme gets priced-in.
In USD/JPY, there's a support level nearby in the form of the 61.8% retracement of the September-January move. Notably, this was the price that caught the low last Wednesday after the Trump-fueled sell-off took over in the USD, just after the threat to fire Jerome Powell.
Fears of a more dovish Fed make sense for USD-weakness as that could pressure further unwind of the carry trade. But with the LDP losing a majority in the upper chamber, it seems that greater political vulnerability would make for a more difficult road for the Bank of Japan to hike rates. Nonetheless, the response to support is what matters here, and there's quite a bit of structure lurking below the Fibonacci level, with 146.54 and 145.93 both of note, and that's before the 145.00 level comes back into play. - js
In USD/JPY, there's a support level nearby in the form of the 61.8% retracement of the September-January move. Notably, this was the price that caught the low last Wednesday after the Trump-fueled sell-off took over in the USD, just after the threat to fire Jerome Powell.
Fears of a more dovish Fed make sense for USD-weakness as that could pressure further unwind of the carry trade. But with the LDP losing a majority in the upper chamber, it seems that greater political vulnerability would make for a more difficult road for the Bank of Japan to hike rates. Nonetheless, the response to support is what matters here, and there's quite a bit of structure lurking below the Fibonacci level, with 146.54 and 145.93 both of note, and that's before the 145.00 level comes back into play. - js
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.