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24 Feb 2015
USD/JPY: Yellen could provide a breakout – FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, regards today’s Yellen’s speech to aid USD/JPY to finally break out of its range, further explaining the probable movements in USD/JPY on a hawkish and dovish scenario.
Key Quotes
“The USD/JPY pair has turned dead flat in the range of 118.80-119.40 during the last couple of sessions. The weaker-than-expected US data was countered to some extent by the resilient US Treasury yields.”
“The pair is trading above the 150% Fib expansion level of (100.81-10.06 -105.18) located at 118.91.”
“Meanwhile, the immediate resistance is seen at 119.40 and 120.01 (161.8% Fib expansion) and a strong support is seen at 118.42 and 118.15 (100-DMA).”
“The pair could see a breakout depending on the Fed chair Janet Yellen’s comments on the interest rate hike in the US in her testimony to congress today. In December, Yellen set the stage for a summer rate hike when she said rates would not move in at least 2 months.”
“However, the latest Fed minutes revealed policymakers are in no hurry to raise interest rates. Thus the June rate hike if off the table.”
“Still markets do believe that the Fed would raise rates in 2015.”
“Moreover, Yellen’s comments on how quickly rates will rise would shift the rate hike expectations in a big way, thereby making or breaking the USD rally. A dovish tilt could see the USD/JPY pair test 118.42-118.15 levels.”
“On the flip side, focus on strong labor market conditions could be read as hawkish by markets and may end up pushing the pair to 120.00 levels.”
Key Quotes
“The USD/JPY pair has turned dead flat in the range of 118.80-119.40 during the last couple of sessions. The weaker-than-expected US data was countered to some extent by the resilient US Treasury yields.”
“The pair is trading above the 150% Fib expansion level of (100.81-10.06 -105.18) located at 118.91.”
“Meanwhile, the immediate resistance is seen at 119.40 and 120.01 (161.8% Fib expansion) and a strong support is seen at 118.42 and 118.15 (100-DMA).”
“The pair could see a breakout depending on the Fed chair Janet Yellen’s comments on the interest rate hike in the US in her testimony to congress today. In December, Yellen set the stage for a summer rate hike when she said rates would not move in at least 2 months.”
“However, the latest Fed minutes revealed policymakers are in no hurry to raise interest rates. Thus the June rate hike if off the table.”
“Still markets do believe that the Fed would raise rates in 2015.”
“Moreover, Yellen’s comments on how quickly rates will rise would shift the rate hike expectations in a big way, thereby making or breaking the USD rally. A dovish tilt could see the USD/JPY pair test 118.42-118.15 levels.”
“On the flip side, focus on strong labor market conditions could be read as hawkish by markets and may end up pushing the pair to 120.00 levels.”