USD/JPY Fails To Hold Post-FOMC Low: 118.20 Up Next?
Dailyfx | Mar 25, 2015 12:53PM ET
Talking Points
- USD/JPY Downside Targets Favored Ahead of Japan Consumer Price Index (CPI).
- USD/CAD Rebounds From Range Support Ahead of BoC Governor Stephen Poloz.
- US Dollar Preserves Bullish Formation Despite Dismal Durable Goods Report.
Chart - Created Using FXCM Marketscope 2.0
- Lack of momentum to hold the low (119.27) following the FOMC meeting raises the risk for a larger pullback especially as the RSI fails to retain the bullish momentum.
- Despite forecasts for a slowdown in Japan’s Consumer Price Index (CPI), the Bank of Japan (BoJ) may continue to endorse a wait-and-see approach as Governor Haruhiko Kuroda remains confident in achieving the 2% target for inflation over the policy horizon.
- Nevertheless, DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long USD/JPY, with the ratio currently standing at +1.90.
- Despite the pullback from a fresh monthly high (7696), NZD/USD may continue to track higher over the next 24-hours of trade as New Zealand’s Trade Balance is expected to widen to 350M from 56M in January.
- A further improvement in growth prospects may highlight a more bullish outlook for the kiwi especially as the bar remains high for the Reserve Bank of New Zealand (RBNZ) to revert back to its easing cycle.
- Need a close above 0.7675(23.6% retracement) to 0.7700 (50% retracement) to favor a larger advance in NZD/USD.
|
Index |
Last |
High |
Low |
Daily Change (%) |
Daily Range (% of ATR) |
|
DJ-FXCM Dollar Index |
11936.62 |
11966.69 |
11907.65 |
-0.16 |
69.58% |
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Chart - Created Using FXCM Marketscope 2.0
- Despite the unexpected 1.4% contraction in U.S. Durable Goods Orders, the Dow Jones-FXCM U.S. Dollar index continues to consolidate above the low (11,886) following the Federal Open Market Committee (FOMC) meeting; may continue to see near-term support as the bearish RSI momentum appears to be waning.
- May see the dollar face additional headwinds as Chicago Fed President Charles Evans, a 2015 FOMC voting-member, favors a rate hike in 2016; will keep a close eye on the final 4Q Gross Domestic Product (GDP) report as market participants now see the growth rate expanding an annualized 2.4% versus an initial forecast of 2.2%.
- With signs of a near-term bottoming process, topside remain favored with the next region of interest coming in around 11,992 (38.2% retracement).
|
Release |
GMT |
Expected |
Actual |
|
MBA Mortgage Applications (MAR 20) |
11:00 |
-- |
9.5% |
|
Durable Goods Orders (FEB) |
12:30 |
0.2% |
-1.4% |
|
Durable Goods Orders ex Transportation (FEB) |
12:30 |
0.2% |
-0.4% |
|
Non-Defense Capital Goods Orders ex Aircrafts (FEB) |
12:30 |
0.3% |
-1.4% |
|
Non-Defense Capital Goods Shipments ex Aircrafts (FEB) |
12:30 |
0.3% |
0.2% |
--- Written by David Song, Currency Analyst
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