US Dollar Price and Chart Analysis

  • The Bank of Japan is watching the FX market with curiosity.
  • US NFPs might present the subsequent driver for the US greenback.

The Japanese Yen is buying and selling at a contemporary 24-year low in opposition to the US greenback because the short-term yield unfold between the 2 international locations continues to widen. Two-year Japanese bonds are presently buying and selling with an 8bp damaging yield, whereas the US two-year gives a meaty 3.51%, its highest stage in 15 years. This gulf in yields, brought on by the ever-widening financial coverage stance of the 2 international locations, will finally drive the Bank of Japan into performing to stem the Yen’s weak point in any other case the international locations’ commerce companions will begin questioning whether or not Japan is actively protecting its foreign money artificially low. The Japanese central financial institution has already began to warn the market that they’re carefully watching the change price, however actions, not phrases shall be wanted to cease this transfer.

Bank of Japan (BoJ) – Foreign Exchange Market Intervention

For all market shifting knowledge releases and financial occasions see the real-time DailyFX Calendar.

The newest US Jobs Report (NFP) shall be launched at 12:30 GMT right now and can the market the most recent have a look at the state of the US labor market. Current market expectations are for 300k new jobs to have been created in August, in contrast to 528k in July.

The month-to-month chart highlights the acceleration of the USDJPY transfer since March with the pair rallying by round 26 massive figures or in extra of twenty-two%. As with a lot of charts that see multi-decade strikes, dependable short-term assist and resistance ranges might be tough to discover. The subsequent stage of resistance is probably going the August 1998 excessive at 147.63, though there’s probably to be a lot extra verbal intervention from the BoJ earlier than this stage comes into play.

USD/JPY Monthly Price Chart – September 2, 2022

Japanese Yen Latest: USD/JPY Rallies to a New 24-Year High

Retail dealer knowledge exhibits 23.61% of merchants are net-long with the ratio of merchants quick to lengthy at 3.24 to 1. The variety of merchants net-long is 4.03% decrease than yesterday and 10.79% decrease from final week, whereas the variety of merchants net-short is 3.38% increased than yesterday and 14.18% increased from final week.

We sometimes take a contrarian view to crowd sentiment, and the actual fact merchants are net-short suggests USD/JPY costs could proceed to rise. Traders are additional net-short than yesterday and final week, and the mixture of present sentiment and up to date adjustments offers us a stronger USD/JPY-bullish contrarian buying and selling bias.

What is your view on the US Dollar – bullish or bearish?? You can tell us by way of the shape on the finish of this piece or you possibly can contact the writer by way of Twitter @nickcawley1.

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