Gold Starting Stage 4 Decline and What It Means for Investors

Passive Buy and Hold Investors in General are Starting to Panic: XLU, Dividends, Bonds

It has been an interesting year with stocks down nearly 25% and the bond ETF TLT down over 40% since the 2020 highs. The passive buy and hold investor is becoming panicked and we can see this in the stock market through the mass selling of utility stocks dividend stocks and bonds.

When the masses become fearful they liquidate nearly all assets in their portfolios which is why we see the Big Blue chip stocks selling off along with precious metals. As investors liquidate around the world they focus on where their money can be preserved. With most currency falling in value there is a flood towards the U.S. dollar index as the safety play.

Gold Video Analysis

Here you can watch my detailed analysis along with both my short-term expectations and long-term supercycle outlook.

Global Currency Trends – Monthly Charts

As the US dollar index rises we tend to see precious metals fall. As you can see from the charts below almost all currencies are falling in value helping to send the US dollar index sharply higher this is a headwind for precious metals until it finds resistance in tops.

Gold Monthly Chart Comparing 2008 Bear Market and 2022

Let’s take a look at the monthly chart of gold. I believe gold entered a new bullish supercycle in 2019, which is very similar to the Super cycle that started in 2001.

I believe the bear market in equities we have started can be compared to the 2008 bear market. Technical analysis shows that gold could correct another 16% lower and match the same 34% correction we saw in 2008.

The price of gold is threatening the 1674 support level. If price is broken on the monthly chart it will signal a large sell off to roughly the $1300 to $1400 level for gold.

While the circumstances and economy are very different from 2008 the price charts are painting a very similar picture. I believe there’s still a long way to go for gold to find support and it may take another 8 to 12 months to unfold. I also believe that the precious metal sector will be one of the first assets to bottom and then start a multiyear rally very similar to what happened during the 2009 to 2011 rally.

While the 34% correction starting to take place may look very large it is in line with what we’ve seen in the past. While price charts don’t repeat they do tend to rhyme so I’m expecting a similar type of scenario though I’m sure it will unfold a little differently and take a different length of time to mature.

Price Stage Analysis – Gold Starting Stage 4 Decline

The price of gold is on the verge of breaking down from a stage three topping phase. Once the breakdown is confirmed it will then be in a stage 4 decline which is known as a bear market. It’s important to note that we can have bear markets within supercycles.

Just like when gold started at new super cycle in 2001 which lasted to 2013 there can be large corrections and smaller bear markets within the bullish Super cycle.

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Dollar Index Rockets Higher and Has More Room to Run

The US dollar Index has been one of the hottest assets to own this year. I believe the rising value of the dollar index has been putting downward pressure on the metals sector all year. As you can see from the quarterly chart below, The US dollar index still has more room to run to match the high set in 2001.

Keep in mind I still think there’s another three to five more bars before the dollar forms a top and reverses direction. Each bar on the chart is 3 months because this is the quarterly chart so we still have potentially a year of sideways or lower gold pricing ahead of us.

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Gold Miners Will Be Under Pressure If Gold Falls

If gold breaks down and the bear market in equities continues, we will see gold mining stocks continue to sell off. The large cap gold stocks ETF GDX shows a potential of 44% decline in price over the next year. While this may sound bad it will become an extraordinary opportunity in do time.

I believe silver and silver mining stocks will follow that of gold stocks as well.

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Concluding Thoughts

In short, I’m very excited for what is unfolding in the precious metals sector. And while it may still be early I’m keeping my eye on the sector for the start of a new super cycle rally in 2023 which could be life changing for investors.

TheTechnicalTraders created the Consistent Growth Strategy that can be manually followed or autotraded in a self-directed retirement account for people who do not want to spend their valuable time in front of a computer. Save time to do what you love and lower stress to enjoy every moment of today.

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www.TheTechnicalTraders.com

Disclaimer: This article and any information contained herein should not be considered investment advice. Technical Traders Ltd. and its staff are not registered investment advisors. Under no circumstances should any content from websites, articles, videos, seminars, books or emails from Technical Traders Ltd. or its affiliates be used or interpreted as a recommendation to buy or sell any security or commodity contract. Our advice is not tailored to the needs of any subscriber so talk with your investment advisor before making trading decisions. Invest at your own risk. I may or may not have positions in any security mentioned at any time and maybe buy sell or hold said security at any time.

Gold Price Forecast – King Dollar Lives On

The Fall in the Price of Gold During the Year

To say that gold has been struggling this year is an understatement. As the chart below shows, the price of the yellow metal declined from above $2,000 to below $1,700 (as of September 20). That slide occurred during the highest inflation since the great stagflation of the 1970s.

US Dollar Strength Was Crucial Pressuring Gold Price Lower

One of the headwinds blowing strongly in the gold market has been the strong greenback. As the chart below shows, the American currency has been appreciating since mid-2021. The broad U.S. dollar index rose from 110.5 in June 2021 to 124 right now, or more than 12%.

Wait, wait a second. The dollar strengthened during a period of high inflation (see the chart below) in which money is losing purchasing power. How could the currency gain and lose value at the same time? It doesn’t seem to make any sense.

Nevertheless, it does. Because of inflation, the dollar is losing its internal purchasing power, i.e., how many real goods and services can we buy with these green pieces of paper? However, the exchange rate is about external purchasing power, i.e., how many pieces of paper with different symbols and signatures issued by foreign central banks we can buy.

The answer is: more! As the chart below shows, the dollar is now near its highest levels in decades versus the British pound, the euro, and Japanese yen (please note that, for consistency, the chart paints the exchange rates as the dollar’s value in foreign currencies).

However, it doesn’t necessarily reflect the dollar’s greatness but the fact that other currencies have been even worse. As investors’ saying goes, the dollar is “the least-ugly mug in a beauty contest”. You see, the Fed was terribly delayed with its combat against inflation, but compared to other major central banks, such as the ECB and the Bank of Japan, it’s an uber-hawk that quickly stood up for a fight.

Remember that exchange rates are all about relative values. For example, inflation in the euro area surpassed 5% in December 2021 and by now it has increased to about 9%, but the central bank didn’t lift its interest rates until July 2022.

The faster and more decisive Fed’s reaction increased the divergence in monetary policies and interest rates (see the chart below) between the dollar and the euro, which strengthened the value of the former. The mechanism was simple: higher rates in America attracted money from all over the world, and as investors have been buying dollar-denominated assets, the value of the greenback has increased.

What Does a Strong Dollar Imply for the Global Economy?

Problems! Why? Well, maybe because about 30% of all S&P 500 companies’ revenues are earned abroad, a stronger dollar reduces the dollar’s value of these sales. Or maybe because many governments and companies have international debts denominated in dollars?

Hence, the stronger the dollar, the higher the debt to be repaid. According to the IMF, 60% of low-income countries are in or at high risk of government debt distress. Tighter financial conditions in the U.S. and a stronger dollar could only increase the pressure on countries with foreign debts.

The dollar is America’s currency, but the emerging market’s troubles. Egypt, Pakistan, and Sri Lanka have already asked the IMF for help – and others may follow suit.

Please also note that about half of international trade is invoiced in dollars, which means that importers are facing higher costs not only because of inflation and supply-chain disruptions but also because of the stronger dollar.

What Does the Strong Dollar Mean for the Gold Market?

It goes without saying that the recent appreciation of the greenback has weighed on gold prices. If not for the strong dollar, gold would have fared much better. Indeed, this year, the yellow metal lost about 6% of its value when measured in the U.S. dollar, but it gained 6.2% in euros and 9.3% in British pounds. Thus, maybe gold’s performance hasn’t been disappointing, but simply the greenback has been shining, and maybe gold is an inflation hedge, after all (but in other currencies than the US dollar)!

It gives hope that when the dollar weakens (for example, due to the start of the recession and the Fed’s pivot, or due to the end of the war in Ukraine), gold will start rallying eventually. It seems that the greatest part of the upward move in the greenback is already behind us.

The strong dollar could also trigger some economic turbulence, which could benefit the yellow metal. However, I wouldn’t bet that financial crises in emerging markets will induce a safe-haven demand for gold. Precious metals investors don’t care too much about other countries than the U.S. or Western Europe.

Bottom Line

There is a true silver lining for gold bulls: one reason behind the appreciation of the dollar. The Fed’s tightening cycle is only one driver, but another is safe-haven inflows. Investors have been moving to the U.S. dollar not because it is so strong, but because of economic turmoil and recessionary risk. If so, gold could at some point (perhaps when the Fed pivots and adopts a dovish policy again) start to move in tandem with the greenback.

Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!

Arkadiusz Sieron, PhD
Sunshine Profits: Effective Investment through Diligence & Care.

U.S. Dollar (DXY) Rebounds As PCE Price Index Exceeds Expectations

Key Insights

  • U.S. dollar moved higher ahead of the weekend. 
  • Commodity-related currencies are under pressure. 
  • USD/JPY is moving towards the important 145 level. 

U.S. Dollar Index Rebounds After Pullback

U.S. Dollar Index settled back above the 112 level and is trying to gain more ground as traders increase purchases of the American currency after the recent pullback.

Today, traders had a chance to take a look at Personal Income and Personal Spending reports from the U.S. Personal Income increased by 0.3% month-over-month in August, while Personal Spending grew by 0.4%.

PCE Price Index increased by 0.3% month-over-month in August, compared to analyst consensus of 0.1%. The higher-than-expected PCE Price Index report provided additional support to the American currency.

EUR/USD Pulls Back Below 0.9800

EUR/USD is moving lower after an unsuccessful attempt to get above the 0.9850 level. Currently, EUR/USD is trying to settle back below 0.9750.

Today, traders focused on the flash readings of the Euro Area inflation reports. The reports indicated that Euro Area Inflation Rate increased from 9.1% in August to 10% in September, compared to analyst consensus of 9.7%. Core Inflation Rate grew from 4.3% to 4.8%, compared to analyst consensus of 4.7%.

The reports show that inflation continues to grow at a robust pace. However, inflation data failed to provide additional support to EUR/USD as traders wanted to take some profits off the table amid rising geopolitical tensions.

GBP/USD Tests The 1.1200 Level

GBP/USD tested the 1.1200 level as the strong rebound continued. The final reading of the UK GDP Growth Rate report indicated that GDP grew by 0.2% in the second quarter, compared to analyst consensus which called for a decline of 0.1%. This report provided material support to the British pound.

GBP/USD

From a big picture point of view, GBP/USD needs to settle above the 20 EMA near the 1.1250 level to continue its rebound. At this point, it looks that GBP/USD will not be able to gain sufficient upside momentum for this move ahead of the weekend.

Commodity-Related Currencies Retreat As Risk Appetite Declines

AUD/USD declined to 0.6450 while NZD/USD pulled back to 0.5670 as traders focused on recession worries. Meanwhile, USD/CAD settled back above the 1.3700 level.

Commodity-related currencies remain sensitive to the dynamics of risk appetite. When demand for the safe-have dollar starts to increase, these currencies find themselves under pressure.

USD/JPY Stays Close To The 145 Level

USD/JPY continues to trade in a tight range below the 145 level. Fundamental reasons push USD/JPY higher. However, traders are worried that BoJ will intervene if USD/JPY crosses the 145 mark. Most likely, we’ll see a test of this level next week despite traders’ fears.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Weekly Price Forecast – US Dollar Climbs Again

US Dollar vs Japanese Yen Weekly Technical Analysis

The US dollar has rallied again against the Japanese Jen, as we continue to see a lot of noisy behavior overall. That being said, I believe that the market is probably going to see a lot of reasons to go higher, but the Bank of Japan intervening recently of course has had a huge effect on the psychology. Either way, central-bank interventions typically do not work for the long term, so I believe we are more likely than not going to see the ¥145 level be broken. If we do break above there, then it opens up a whole new world for this market.

That being said, the one thing that you do not want to see is massive momentum. After all, the Bank of Japan got involved for that exact reason, so I do think that we have a situation where we will be looking for dips to get involved, but you also need to keep in mind that the market is a little overextended, so I do think that consolidation is not necessarily a bad thing. In other words, I remain bullish, but I also recognize that we have come a long way in a very short amount of time. After all, we started the year closer to the ¥113 level.

That’s a huge move in the currency markets, and therefore the occasional breather will probably be needed. The ¥140 level underneath should be a massive support level from what I see, so if we were to break down below there we may enter a bigger pullback, but right now that is what I am choosing to use as my “floor in the market.”

USD/JPY Price Forecast Video 03.10.22

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Price Forecast – US Dollar is Pressuring the Same Barrier

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the trading session on Friday as we continue to threaten the ¥145 level. Ultimately, this is a market that will continue to be very noisy, but I think it still favors the upside. After all, the market is more likely than not going to continue to favor the US dollar as the interest rate situation continues to diverge dramatically. That being said, short-term pullbacks continue to be buying opportunities, especially near the ¥142.50 level.

The ¥140 level is an area that’s worth paying attention to as well, as the 50-Day EMA comes into the picture. Ultimately, this is a situation where you continue to see a lot of volatility, but I think that the ¥140 level should be a bit of a “floor in the market” as there is a lot of confluence. In this scenario, I anticipate that we will see a lot of interest. Ultimately, we are very much in an uptrend, and I just don’t see how that changes. This is a market that I think will continue to be noisy, but at the end of the day, the main deterrent at this point would be the fact that the Bank of Japan intervened about a week ago.

That being said, the Bank of Japan is more worried about the rate of change than a specific number, as central bank interventions rarely work for the longer term and are or less just meant to calm marketplaces down a bit when they get far out of control. We had recently seen that, but as long as the Bank of Japan is willing to buy unlimited bonds, the trajectory is still going to be higher.

USD/JPY Price Forecast Video for 03.10.22

For a look at all of today’s economic events, check out our economic calendar.

Week Ahead: Robust US Jobs Data to Restore USD Index to 1.28?

And as it’s been for most of the year, it’s set to be yet another dollar-centric week for global markets, with investors and traders awaiting the next US jobs report as well as potential policy clues by Fed officials who are scheduled to make public comments over the coming week.

Economic Calendar for Next Week

Monday, October 3

  • Mainland Chinese markets closed this week
  • JPY: Japan 3Q Tankan
  • EUR: Eurozone September manufacturing PMI (final)
  • GBP: UK September manufacturing PMI (final)
  • USD: US September ISM manufacturing and manufacturing PMI (final)
  • USD: Speeches by Atlanta Fed President Raphael Bostic, New York Fed President John Williams

Tuesday, October 4

  • JPY: Tokyo September CPI
  • AUD: Reserve Bank of Australia rate decision
  • EUR: Eurozone August PPI
  • USD: Speeches by New York Fed President John Williams, Dallas Fed President Lorie Logan, Cleveland Fed President Loretta Mester, and San Francisco Fed President Mary Daly

Wednesday, October 5

  • NZD: Reserve Bank of New Zealand rate decision
  • EUR: Eurozone September services PMI (final)
  • Brent: OPEC+ meeting
  • US crude: EIA weekly oil inventory report
  • USD: Speech by Atlanta Fed President Raphael Bostic

Thursday, October 6

  • AUD: Australia August external trade
  • EUR: Eurozone August retail sales, Germany August factory orders
  • USD: US weekly initial jobless claims
  • USD: Speeches by Chicago Fed President Charles Evans, Fed Governor Lisa Cook, Cleveland Fed President Loretta Mester

Friday, October 7

  • EUR: Germany August retail sales, industrial production
  • GBP: Speech by BOE Deputy Governor Dave Ramsden
  • CAD: Canada September unemployment
  • USD: US September nonfarm payrolls, speech by New York Fed President John Williams

US Dollar and the Next US Jobs Report

Recently, the equally-weighted USD index soared past 1.28, well above the 1.25 level cited in our previous Week Ahead article (posted every Friday). 1.25 also marked the early-April 2020 cycle high.

However, this dollar index then swiftly unwound gains, as it pulled away from ‘overbought’ conditions, with its 14-day relative strength index moving back below the 70 level.

The upcoming US jobs report may help determine whether this USD index can be restored to its recent peak above 1.28, or at least remain at these elevated levels.

Here are the market forecasts at present:

  • August nonfarm payrolls: 250,000 increase (median estimate)
    If so, this would be the lowest monthly jobs growth since December 2019.
  • August US unemployment rate: 3.7% (median estimate)
    If so, this would mark s slight uptick, but still hovering close to the pre-pandemic low of 3.5%.
  • 75-basis point hike by the Fed in November: 69%

If the US labour market continues to demonstrate its resilience, either by way of a higher-than-expected headline NFP figure or a lower-than-expected unemployment rate, that should ramp up market expectations for yet another 75-basis point hike by the Fed at its next policy decision due November 2nd.

Such ramped-up expectations may then restore the USD Index back up to 1.28.

Also, keep an eye on the slate of Fed officials who are scheduled to make public comments in the coming week.

Should they offer fresh signs that they’re willing to take bolder measures to quell stubbornly elevated US inflation, that may translate into more USD strength as well.

Alternatively, if market fears over an ultra-aggressive Fed further subside, that may in turn see the US dollar unwinding more of its recent gains.

For more information visit FXTM.

USD/JPY Return to 145 Hinged on US Inflation Numbers and Fed Chatter

It was a busy start to the Asian session for the USD/JPY pair, with employment, retail sales, and industrial production numbers from Japan in focus.

The numbers were Yen positive.

In August, Japan’s unemployment rate fell from 2.6% to 2.5%, which was in line with forecasts. The jobs/applications rate increased from 1.29 to 1.32, also Yen positive. Retail sales surged by 4.1% versus a forecasted 2.8%. In July, retail sales rose by 2.4%.

Industrial production jumped by 2.7% in August versus a forecasted 0.2% rise. In July, production increased by 0.8%.

According to the Ministry of Economy, Trade, and Industry,

Industries that mainly contributed to the increase were

  • Production machinery
  • Iron, steel, and non-ferrous metals
  • Chemicals (excl. Inorganic, organic chemicals, and medicine).

Industries that mainly contributed to the decrease were,

  • Electronic parts and devices
  • Motor vehicles
  • Inorganic and organic chemicals.

Forecasts were also Yen positive, with production for September seeing an upward revision from 2.9% to 3.2%.

Later this morning, private sector PMI numbers from China and consumer confidence figures from Japan will also influence ahead US inflation number late in the day.

USD/JPY Price Action

This morning, the Dollar/Yen was up 0.02% to 144.436. A mixed start to the day saw the Dollar/Yen fall to an early low of 144.304 before finding support.

USD/JPY finds support.
USDJPY Daily Chart 300922

Technical Indicators

The Dollar/Yen will need to avoid the 144.420 pivot to target the First Major Resistance Level (R1) at 144.794 and the Thursday high of 144.812. While today’s stats from China will provide direction, US inflation and FOMC member chatter will need to be dollar friendly to support a breakout.

In the case of a breakout session, the Dollar/Yen would likely test resistance at 145 and the Second Major Resistance Level (R2) at 145.186.

The Third Major Resistance Level (R3) sits at 145.952.

A fall through the pivot would bring the First Major Support Level (S1) at 144.028 into play. However, barring a dollar meltdown, the Dollar/Yen would likely avoid sub-144 and the Second Major Support Level (S2) at 143.654.

The Third Major Support Level (S3) sits at 142.888.

USDJPY resistance levels in play above the pivot.
USDJPY Hourly Chart 300922

Looking at the EMAs and the 4-hourly chart, the EMAs send a bullish signal. The Dollar/Yen sits above the 50-day EMA, currently at 143.949. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

Avoiding the 50-day EMA (143.949) would support a breakout from R1 (144.794) to target 145 and R2 (145.186). However, a fall through S1 (144.028) and the 50-day EMA (143.949) would give the bears a look at S2 (143.654). The 200-day EMA sits at 141.252.

EMAs bullish
USDJPY 4 Hourly Chart 300922

U.S. Dollar (DXY) Heads Towards Yesterday’s Lows As Pound Rebounds

Key Insights

  • U.S. dollar is mostly flat in volatile trading. 
  • The rebound in GBP/USD continues. 
  • Commodity-related currencies are under strong pressure.

U.S. Dollar Index Settled Back Below 113

U.S. Dollar Index moved back below the 113 level as traders continued to take profits after the recent rally.

Today, traders had a chance to take a look at the final reading of the second-quarter GDP Growth Rate report. The report indicated that GDP declined by 0.6%, in line with the analyst consensus.

Initial Jobless Claims report showed that 193,000 Americans filed for unemployment benefits in a week, compared to analyst consensus of 215,000. Interestingly, the strong report did not provide additional support to the American currency as traders focused on the rebound of the British pound.

GBP/USD Continues To Rebound

GBP/USD moved towards the 1.1000 level as traders were ready to buy the British pound after the recent sell-off.

It looks that the Bank of England managed to calm traders with its intervention plans in the UK government bond markets. However, it should be noted that the yield of UK 10-year government bonds rebounded from 4.01% to 4.12% today.

GBP/USD

GBP/USD continues to move higher. RSI returned to the moderate territory, which indicates that GBP/USD may soon face more pressure. However, a move above the 1.1000 level may open the way to the test of the first significant resistance level at 1.1220. No material levels were formed between 1.1000 and 1.1220 so this move may be fast.

EUR/USD Stays Above 0.9700 After Germany’s Inflation Exceeds Expectations

EUR/USD is trading above the 0.9700 level after the release of disappointing economic reports. Euro Area Economic Sentiment declined from 97.3 in August to 93.7 in September, compared to analyst consensus of 95.

In Germany, Inflation Rate increased from 7.9% in August to 10% in September, compared to analyst consensus of 9.4%.

Germany’s inflation reports may provide some support to euro as they indicate that ECB will be forced to raise rates aggressively. While higher rates will certainly put more pressure on economic activity, inflation has reached unacceptable levels.

Commodity-Related Currencies Move Lower Amid Recession Fears

Commodity-related currencies gained strong downside momentum and are down by about 1% against the U.S. dollar.

AUD/USD declined towards 0.6450, while NZD/USD moved to 0.5665. Meanwhile, USD/CAD tested the 1.3750 level.

Commodity markets are mostly moving lower today, and it remains to be seen whether commodity-related currencies will get any support during today’s trading session.

USD/JPY Heads Towards The 145 Level

USD/JPY has recently managed to settle back above the 144.50 level. There are no signs of interventions from the Bank of Japan, so USD/JPY may try to test the key 145 level.

The pressure on the Japanese yen may increase after the better-than-expected U.S. Initial Jobless Claims report. The BoJ remains extremely dovish while the Fed will have to raise rates aggressively, which is bullish for USD/JPY.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Price Forecast – US Dollar Continues to Threaten to Break Out

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the trading session on Thursday to wipe out the losses from Wednesday. We’re sitting just below the ¥145 level, an area that has been a major resistance barrier, and just below where the Bank of Japan got involved. At this point, as long as the breakout is not overly brutal, it’s likely that the Japanese will let it go.

A lot of traders are nervous about betting against the central bank, but what they don’t understand is that they are also betting with a central bank, known as the Federal Reserve. The Federal Reserve is a much more significant central bank than the Japanese are, so if the Fed is going to continue to tighten, that at the end of the day is going to be the only thing that matters.

Any dip at this point in time will more likely than not end up being a buying opportunity, with the ¥142.50 level being a nice support level, followed by the ¥140 level. The 50-Day EMA sits just below there, as it does also attract a lot of attention and therefore I think that the ¥140 level is probably going to be more or less the “floor in the market” going forward.

If we were to break down below that level, then things start to change a bit and we would have to take a look at the actions of the Federal Reserve and the Bank of Japan, because if there is a fundamental shift in attitude, that obviously could change the longer-term trend. As things stand right now, the US dollar continues to strengthen.

USD/JPY Price Forecast Video for 30.09.22

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY to Target 145 as the Yen Flounders Around the Hawkish Fed

It was a quiet start to the Asian session for the USD/JPY pair, with no economic indicators from Japan for the markets to consider this morning.

The lack of stats left the USD/JPY in the hands of market sentiment towards the Fed and the economic outlook. Monetary policy divergence remains heavily in favor of the greenback, supporting a continued USD/JPY move towards ¥145.

Until US labor market conditions deteriorate or the Bank of Japan shifts its stance on monetary policy, pressure on the Yen will likely persist.

Later today, US economic indicators will provide direction. US jobless claims and Q2 GDP numbers will draw interest. However, barring any revisions to the GDP numbers, the jobless claims will be the focal point. A fall in initial jobless claims to sub-200k would drive demand for the dollar.

Talk of a Bank of Japan intervention lingers, though doubts remain over the effectiveness of a BoJ move.

USD/JPY Price Action

This morning, the Dollar/Yen was up 0.10% to 144.259. A mixed start to the day saw the Dollar/Yen fall to an early low of 144.046 before rising to a high of 144.466

Dollar finds early support.
USDJPY Daily Chart 290922

Technical Indicators

The Dollar/Yen needs to move through the 144.297 pivot to target the First Major Resistance Level (R1) at 144.69 and the Wednesday high of 144.869. Hawkish FOMC member chatter and upbeat jobless claims would support a breakout from 144.50.

In the case of a breakout session, the Dollar/Yen would likely test resistance at 145 and the Second Major Resistance Level (R2) at 145.262.

The Third Major Resistance Level (R3) sits at 146.227.

Failure to move through the pivot would leave the First Major Support Level (S1) at 143.725 in play. However, barring a dollar meltdown, the Dollar/Yen would likely avoid sub-143.500 and the Second Major Support Level (S2) at 143.332.

The Third Major Support Level (S3) sits at 142.367.

USD/JPY support levels in play below the pivot.
USDJPY Hourly Chart 290922

Looking at the EMAs and the 4-hourly chart, the EMAs send a bullish signal. The Dollar/Yen sits above the 50-day EMA, currently at 143.807. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A Dollar/Yen hold above the 50-day EMA (143.807) would support a breakout from R1 (144.690) to target 145 and R2 (145.262). However, a fall through the 50-day EMA and S1 (143.725) would give the bears a look at S2 (143.332). The 200-day EMA sits at 141.080.

EMAs bullish.
USDJPY 4 Hourly Chart 290922

U.S. Dollar (DXY) Retreats After Testing New Highs

Key Insights

  • U.S. dollar is losing ground as traders take profits off the table. 
  • GBP/USD is mostly flat after BoE decides to intervene in bond markets. 
  • USD/JPY faced resistance below the 145 level. 

U.S. Dollar Declines After Strong Rally

U.S. dollar pulled back after testing new highs as traders took some profits off the table after the strong rally.

Today, traders had a chance to take a look at Pending Home Sales report for August, which indicated that Pending Home Sales declined by 2% month-over-month. On a year-over-year basis, Pending Home Sales decreased by 24.2%.

The U.S. dollar is overbought, and the near-term dynamics of the American currency depend on the demand for safe-haven assets. In case the demand for safe-haven assets remains elevated, the U.S. dollar may get more support.

EUR/USD Continues Its Attempts To Rebound

EUR/USD moved back above the 0.9600 level as some traders were willing to bet on a rebound after the strong sell-off.

The fate of Nord Stream pipelines after explosions remains the key topic in the EU. Some reports indicate that Germany fears that these pipelines would never work again if they are not repaired quickly as salty water will lead to corrosion.

The EU is not ready to get rid of the Russian gas in the near term, so the elimination of Nord Stream pipelines will put additional pressure on the European economy. In the near term, EUR/USD may be sensitive to technical factors after the huge sell-off.

EUR/USD

From a big picture point of view, EUR/USD remains in a downside trend. However, it may gain upside momentum in the near term as it is oversold.

GBP/USD Is Volatile After BoE Decision To Buy Bonds

GBP/USD is mostly flat in volatile trading as markets react to BoE’s plans to buy UK government bonds. The recent surge in yields is forcing the BoE to act.

Obviously, starting a quantitative easing program at a time when BoE is raising rates does not look like a logical move. However, the situation is almost critical, so central bank has to do something to calm bond markets.

It remains to be seen whether the decision will provide support to GBP/USD in the near term. Currently, GBP/USD is trading above 1.0700 after testing support at 1.0550.

Commodity-Related Currencies Rebound

AUD/USD gained strong upside momentum as commodity markets moved higher. Currently, AUD/USD is trying to settle above 0.6470, while NZD/USD is moving towards 0.5670.

Canadian dollar also received support in today’s trading session, and USD/CAD moved back below the 1.3700 level. In case the rebound in commodity markets continues, commodity-related currencies will get more support.

USD/JPY Faced Resistance Below The Key 145 Level

USD/JPY failed to get to the test of the key 145 level and settled below 144.50. There are no signs of interventions from the BoJ, but it looks that traders are worried that Japan’s central bank will continue to defend the important level at 145.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Price Forecast – The US Dollar Continues to Struggle at The Same Resistance Level

US Dollar vs Japanese Yen Technical Analysis

The US dollar has pulled back during the trading session on Wednesday to show that the ¥145 level is going to continue to be a major barrier to overcome, and it looks as if the market will struggle to break above there. If we were to break above the ¥145 level, then it’s possible that the market is looking to the ¥147.50 level, possibly even the ¥150 level.

On a pullback at this point in time I think that the ¥142.50 level is going to be an area of support, that we eventually bounce from. The ¥140 level underneath there is going to be important as well, as the 50-Day EMA is rising to that level as well. Ultimately, this is a market that remains a “buy on the dip” situation, therefore it’s likely that we will look at this through the prism of value more than anything else.

If we were to break through all that, then we might have a different look to this market, and certainly the Bank of Japan doing everything it can to end this trend through intervention will be stuck in the minds of traders, but I don’t necessarily think that it has the ability to change anything. After all, the market has been very noisy to say the least, and therefore a little bit of a breather could be used. Ultimately, this is a market that favors the upside due to interest-rate differential, which is going to continue to be a major issue in general. The market continues to be very noisy overall, and I do think that position sizing will be everything.

USD/JPY Price Forecast Video for 29.09.22

For a look at all of today’s economic events, check out our economic calendar.

Mid-Week Technical Outlook: Dollar Dominates FX Space

Major currencies have been crushed by the dollar’s meteoric rise this month with the British Pound and New Zealand dollar shedding over 8%. Given how the dollar continues to draw strength from aggressive rate hike bets, geopolitical tensions, and positive US economic data – more upside could be on the cards.

With more Fed officials scheduled to speak this week, this may translate to more volatility on the dollar. Where there is volatility, there are potential opportunities.

Our focus today will be mainly on USD crosses with the tool of choice none other than technical analysis.

DXY Bulls Unstoppable?

The dollar’s appreciation over the past few days has been phenomenal. Bulls remain supported by key fundamental forces with the technicals signalling further upside. Prices are trading around 114.70 as of writing with the next key point of interest at 115.00. A strong breakout above this level may open the doors towards 115.34 and 118.75. Should 115.00 prove to be strong resistance, a decline back towards 113.30 and 111.60.

EUR/USD Eyes 0.9500

An appreciating dollar has dragged the EURUSD well below parity. Prices are heavily bearish on the daily timeframe with the candlesticks respecting a bearish channel. A strong breakdown below 0.9500 could open a path towards 0.9300. If 0.9500 proves to be tough support to crack, a rebound back towards 0.9900 and parity could become reality.

GBP/USD Preparing to Resume Selloff

It’s been a rough week for the GBPUSD. After hitting an all-time low on Monday, we saw the currency stage a sharp rebound. Nevertheless, prices remain heavily bearish with a break back below 1.0600 suggesting a decline towards 1.0520 and 1.0350, respectively. Should prices rebound back towards 1.0850, the currency pair could test 1.1000 and 1.1350.

AUD/USD Bears Eye 0.6200

Aussie bears remain in the driving seat as the currency pair descends lower with each passing day. There have been consistently lower lows and lower highs while the MACD trades to the downside. A strong breakdown below 0.6350 could encourage a decline towards 0.6270 and 0.6200.

USD/JPY Breakout on the Horizon

It’s all about the 145.00 level on the USDJPY. A stronger dollar could encourage bulls to conquer this resistance, opening the doors towards 147.00 and higher. Given how this level has stood the test of time. A rejection from this point could result in the USDJPY trading back within its current range.

NZD/USD Rebound in the Process?

After dropping over 500 pips this month, could the NZDUSD be preparing for a rebound? There have been consistently lower lows and lower highs while the MACD trades to the downside. Prices recently staged a strong rebound from the 0.5560 level with bulls eyeing 0.5720 and 0.5800, respectively, below 0.55600 – prices may sink towards 0.5500.

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US Dollar Supported as Fed Officials Call for More Rate Hikes to Fight Inflation

The U.S. Dollar is trading flat early Wednesday after posting a choppy, two-sided trade the previous session despite hawkish commentary from several Federal Reserve policymakers.

The greenback is edging lower against the Euro and Japanese Yen, but is slightly higher against the British Pound. The subdued price action is the result of traders monitoring central bank activity and the impact on the growth of the global economy from their aggressive efforts to drive down inflation.

At 23:52 GMT, December U.S. Dollar Index futures are trading 114.095, unchanged. On Tuesday, the Invesco DB US Dollar Index Bullish Fund ETF (UUP) settled at $30.68, up $0.02 or +0.05%.

Daily December U.S. Dollar Index

Dollar Supported by Hawkish Fed Members

With the dollar index hovering just below a two-year high at 114.445, the trading activity suggests higher prices could continue especially with Federal Reserve officials ignoring the pain in the stock market while calling for the need of further rate hikes.

Minneapolis Federal Reserve Bank President Neel Kashkari was the latest hawk to voice his opinion when he said on a WSJ Live interview Tuesday that the Fed needs to keep tightening until it has evidence underlying inflation is heading down, then should pause and “let the tightening work its way through the economy” to see if it has done enough.

Early Monday, Susan Collins, the new president of the Federal Reserve Bank of Boston, endorsed Fed projections released last week that signaled its benchmark interest rate would rise to 4.6% by next year, up sharply from about 3.1% now.

Later, Cleveland Fed President Fed President Loretta Mester said, “When there’s a lot of uncertainty, it can be better for policymakers to actually act more aggressively, because aggressive action and pre-emptive action can prevent the worst-case outcomes from happening.”

Avoiding Recession Will Be a Challenge

The comments from the three Fed policymakers contributed to the ongoing debate about how badly the Fed’s rate hikes – the fastest in more than 40 years – will hurt the economy. By increasing its benchmark rate, the Fed is making mortgages, auto loans and credit cards more expensive for consumers and businesses.

Boston Fed President Collins acknowledges the rising worries about a recession, but she believes, “the goal of a more modest slowdown, while challenging, is achievable.”

Other Fed officials hope their rate hikes will achieve a “soft-landing” by slowing consumer and business spending enough to bring down inflation but not so much as to cause a recession. However, many economists are increasingly skeptical that such an outcome is likely. They think the U.S. could face a recession next year.

Fed Chairman Jerome Powell even acknowledged that “the chances of a soft landing are likely to diminish” as the Fed steadily raises borrowing costs.

“No one knows whether this process will lead to a recession or, if so, how significant that recession would be,” Powell said.

Short-Term Outlook

There needs to be a slowdown in the economy to get inflation under control and the Fed sees rate hikes as the means to achieve this. This will be supportive for the U.S. Dollar until the Fed slows the size and the pace of the rate hikes, allowing other policymakers like the European Central Bank to catch up.

Even a U.S. recession is not likely to be enough to weaken the dollar because other economies are already headed there like the Euro Zone. Furthermore, a global recession will likely enhance the greenback’s appeal as a safe-haven asset.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar (DXY) Is Mostly Flat Despite Profit-Taking

Key Insights

  • U.S. dollar managed to rebound from session lows. 
  • EUR/USD remains under pressure after explosions in natural gas pipelines. 
  • GBP/USD is trading above 1.0750.

U.S. Dollar Moved Away From Session Lows

U.S. Dollar Index settled near the 114 level as traders took some profits off the table after the recent rally.

Interestingly, Treasury yields continue to move higher, and the yield of 10-year Treasuries is trying to settle above the 3.95% level. In case this attempt is successful, it will move towards 4.00%, which will be bullish for the U.S. dollar.

Today, the U.S. released Durable Goods Orders report, which indicated that Durable Goods Orders declined by 0.2% month-over-month in August, compared to analyst consensus of -0.4%.

New Home Sales increased by 28.8% month-over-month in August. CB Consumer Confidence grew from 103.2 in August to 108 in September, compared to analyst consensus of 104.5.

U.S. economic reports indicated that the economy remained in a decent shape. At this point, the U.S. economy is definitely stronger than its developed peers, which provides additional support to the American currency.

EUR/USD Remains Under Pressure

EUR/USD is currently trying to settle below the 0.9600 level as traders fail to find positive catalysts for the European currency.

The mysterious leaks from Nord Stream pipelines may serve as an additional bearish catalyst for EUR/USD. Most likely, these leaks were caused by explosions.

As usual, all parties involved will blame each other, but the key takeaway is that Europe will not get natural gas through these pipelines in winter even if there is a political will to restore supplies.

EUR/USD

EUR/USD is oversold, but there is more room to gain additional downside momentum. In case EUR/USD manages to settle below 0.9590, it will head towards the next support at 0.9550. A move below this level will push EUR/USD towards 0.9500.

On the upside, the nearest significant resistance level is located at 0.9670. If EUR/USD climbs back above this level, it will head towards 0.9725. A successful test of this level will open the way to the test of the resistance at 0.9810. Traders should note that the recent sell-off was strong, and there are big gaps between levels. In this situation, they should be prepared for fast moves.

GBP/USD Attempts To Rebound

GBP/USD has managed to settle above 1.0750 as the pound continues its attempts to rebound after the huge sell-off.

Markets are shocked by UK’s plans to cut taxes and increase borrowing. The yield of UK 10-year government bonds is testing new highs near 4.38%.

The dynamics of UK government debt markets indicate that the panic is not over yet. In this environment, GBP/USD may find itself under more pressure after the first wave of profit-taking.

USD/CAD Is Trading Near 1.3700

USD/CAD pulled back towards 1.3650 before rebounding to 1.3700 as traders remained focused on the safety of the U.S. dollar.

Commodity markets are moving higher today, but this rebound does not provide significant support to commodity-related currencies.

AUD/USD is mostly flat, trading near 0.6450. NZD/USD made an attempt to settle above 0.5700 but pulled back towards the 0.5650 level.

USD/JPY Looks Ready To Test The Key 145 Level

USD/JPY is trading near the 145 level as traders believe that the BoJ does not have enough firepower for interventions at these levels.

Fundamentally, the yen should stay weak as the BoJ refuses to raise rates when the Fed is raising them aggressively.

Technically, the key question is whether the BoJ is ready to defend the 145 level or it will allow USD/JPY to move towards the 150 level.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Price Forecast – The US Dollar Continues to Break Towards Resistance

US Dollar vs Japanese Yen Technical Analysis

The US dollar has initially pulled back against the Japanese yen during the trading session on Tuesday, but then turned around to show signs of life again. The ¥145 level has been a major resistance barrier over the last couple of weeks, therefore it does make a certain amount of sense that we would see this as a situation where we will continue to pick away at the barrier, which breaking above there could open up the possibility of a bigger move, but also has to worry about the Bank of Japan entering again.

As you can see, we have been in a 500 point range, between the ¥140 level and the ¥145 level. The market will continue to be very noisy along the way, and I do think that it is probably situation where you are looking for value on dips, but the one thing that you will have to pay attention to is the momentum or rate of change when it comes to the pair, because if it does get a little bit too aggressive, the Bank of Japan will step in again.

Regardless, I have no interest in shorting this market until the Federal Reserve changes its attitude, or the Bank of Japan changes its attitude about buying bonds and doing quantitative easing. At this point, the central banks are widely divergent on their monetary policy, and as long as that’s the case, then this remains a one-way trade. However, once things change, this could be one of the great reversals out there. I don’t think we are anywhere near that, but it’s worth keeping the back of your mind.

USD/JPY Price Forecast Video for 28.09.22

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Index (DXY) Pulls Back From Highs As Pound Rebounds After Sell-Off

Key Insights

  • GBP/USD found support below 1.0400 and moved back above the 1.0800 level. 
  • EUR/USD tested new lows near 0.9550.
  • Commodity-related currencies are losing ground despite the rebound in commodity markets. 

U.S. Dollar Tested New Highs

U.S. Dollar Index made an attempt to settle above 114.50 after the huge sell-off in GBP/USD. Traders reacted to Britain’s borrowing plans and rushed to the safety of the U.S. dollar.

As a result, GBP/USD moved below the 1.0400 level before rebounding above 1.0800. The U.S. Dollar Index pulled back from highs and settled below 113.50.

GBP/USD

From a technical point of view, GBP/USD remains oversold. However, traders should note that we can see another wave of panic before the pound will be ready to rebound towards 1.1000.

Meanwhile, the yield of UK 10-year government bonds is trying to settle above 4.15%. A week ago, these bonds yielded 3.15%, so the sell-off in UK government bonds was massive.

Most likely, the developments in GBP/USD will have a significant impact on the general dynamics of the U.S. dollar in the upcoming trading sessions.

EUR/USD Tested Support Near 0.9550

EUR/USD tested new lows near 0.9550 but moved back above 0.9650 as some traders were willing to bet on a rebound after the huge sell-off.

The panic in the European government debt markets continues. The yield of Italy 10-year government bonds is currently trying to settle above 4.50%. Such levels were last seen back in 2013, when bond markets were recovering after the 2011 debt crisis.

Traders will need to monitor the developments in the debt markets as the continuation of the current trend may trigger another sell-off in EUR/USD.

USD/JPY Rebounds As Traders Shrug Off Intervention Risks

USD/JPY continues to rebound after the recent invervention from the Bank of Japan. Currently, USD/JPY is trying to settle back above the 144 level.

In case this attempt is successful, USD/JPY will move towards the important 145 level. The key question is whether the BoJ is ready to defend this level. In case there are no signs of inverventions near 145, USD/JPY may quickly move towards the 150 level.

Commodity-Related Currencies Remain Under Pressure

AUD/USD is currently trying to settle below 0.6500 while NZD/USD is trading near 0.5710. Meanwhile, USD/CAD has recently made an attempt to get above the 1.3700 level.

It should be noted that trading action in commodity-related currencies is calm compared to GBP/USD and EUR/USD. Today’s rebound in commodity markets provides support to these currencies, but this support is not sufficient enough to push them higher against the U.S. dollar.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Price Forecast – The US Dollar Continues to Grind Against the Japanese Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar has gapped higher during the open on Monday, pulled back, and then shot higher. However, we are starting to pull back again, so it looks like volatility is going to continue to be a major issue. The ¥145 level above should continue to be resistance, as we see a lot of noise out there. The ¥145 level was basically where the Bank of Japan got involved and started shorting this pair.

That does not mean that we cannot go higher, because quite frankly central bank interventions don’t work for the long term under most circumstances. It is simply a mechanism where they tried to slow down the rate of change, because market forces are much bigger than central banks. Having said that, it’s very possible that we may look at this through the prism of consolidation for a while, which would make a certain amount of sense considering just how noisy things have been over the last several days. Ultimately, I still have no interest in shorting this pair, nor do I have any interest in selling the US dollar overall.

The attitude of the pair still is going to be cautious in the short-term but I do think that eventually the longer term uptrend comes into play. In fact, we would need to see the Federal Reserve change its monetary policy or the Bank of Japan do the same in order for this pair to change its overall trajectory at this point.

USD/JPY Price Forecast Video for 27.09.22

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Forex Technical Analysis – Edging Higher as Intervention Impact Diminishes

The Dollar/Yen is edging higher on Monday as U.S. Treasury yields rose, widening the spread with Japanese Government bonds. The Forex pair is still trading below levels it hit last week before Japanese authorities intervened, but most investors believe the impact of the move will eventually be absorbed.

At 11:46 GMT, the USD/JPY is trading 144.222, up 0.857 or +0.60%. On Friday, the Invesco CurrencyShares Japanese Yen Trust ETF (FXY) settled at $65.20, down $0.47 or -0.72%.

The Japanese Yen has depreciated nearly 20% this year, sinking to 24-year lows, largely as aggressive U.S. interest rate hikes push the dollar higher.

Traders were expecting some intervention at some point, given the increasing verbal intervention from high ranking government and central bank officials. Additionally, two weeks ago, the Bank of Japan (BOE) conducted a rate check which is usually a precursor to an intervention.

Nonetheless, analysts are saying currency interventions are rarely successful with most expecting the move to provide a temporary reprieve for the Japanese Yen.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing. However, momentum has been trending lower since the intervention on September 22.

A trade through 145.900 will signal a resumption of the uptrend. A move through 131.734 will change the main trend to down.

The minor trend is down. This is controlling the momentum. A trade through the invention low at 140.353 will reaffirm the shift in momentum.

The minor range is 145.900 to 140.353. Its 50% level at 143.127 is support.

Another minor range is 135.809 to 145.900. Its 50% level at 140.855 essentially provided support after the intervention.

Daily Swing Chart Technical Forecast

Trader reaction to 143.127 is likely to determine the direction of the USD/JPY on Monday.

Bullish Scenario

A sustained move over 143.127 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into 145.900, followed by 146.780.

Bearish Scenario

A sustained move under 143.125 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into 140.855, followed by 140.353. This is a potential trigger point for an acceleration to the downside into 138.156.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Fundamental Daily Forecast – BOJ Intervention Not Enough to Overcome Hawkish Fed Policy

The Dollar/Yen finished higher on Friday after posting a volatile reversal to the downside the previous session after Japanese authorities intervened in the markets to support the currency for the first time since 1998.

Some traders attributed the lack of follow-through to the downside due a bank holiday in Japan. Others said the move took place because most investors believe the intervention would not have a lasting impact on the Japanese Yen.

On Friday, the USD/JPY settled at 143.365, up 1.073 or +0.75%. The Invesco CurrencyShares Japanese Yen Trust ETF (FXY) closed at $65.20, down $0.47 or -0.72%.

The USD/JPY tanked more than 2% the previous session after it had traded more than 1% higher on the BOJ’s decision to stick to its super-loose policy stance, bucking a global tide of monetary tightening by central banks fighting soaring inflation.

“We have taken decisive action,” vice finance minister for international affairs Masato Kanda told reporters, responding in the affirmative when asked if that meant intervention.

Intervention Impact Won’t Last

The intervention wasn’t a total surprise. The week earlier the Bank of Japan (BOJ) completed a rate check, which is usually a precursor of an intervention. The timing and the reason for the intervention – to strengthen the Yen – was a surprise, however.

Usually, interventions are reserved for currency manipulation that could be detrimental to a country’s economy. In this case, the rise in the USD/JPY may be hurting Japan’s economy, but the currency is not being manipulated.

The Yen is being crushed because of the divergence in policy between the U.S. Federal Reserve and the Bank of Japan. The Fed is aggressively hiking interest rates in an effort to drive down inflation. The BOJ is holding policy at ultra-low levels.

With the Fed raising rates and the BOJ holding on to negative rates, the spread between U.S. Treasurys and Japanese Government bond yields is widening, making the dollar a more attractive currency.

That’s it in a nutshell.

US Treasury Acknowledges BOJ’s Intervention

According to reports, the U.S. Treasury acknowledged the BOJ’s move but stopped short of endorsing the intervention.

Two months ago U.S. Treasury Secretary Janet Yellen said of the Yen’s depreciation that Washington remained convinced that currency intervention was warranted only in “rare and exceptional circumstances”, and that the market should determine exchange rates for G7 countries.

Short-Term Outlook

Prior to the intervention, bullish traders were being tentative about adding to their long positions as the USD/JPY approached 145. Now that the intervention is out of the way and with analysts saying Japanese officials are not likely to try to drive the Yen higher over the near-term, buyers are likely to get more confident and resume the uptrend.

The intervention was the most powerful tool the BOJ had available and they used it. It was essentially a weapon of last resort that Japan had left to arrest sharply Yen declines that were pushing up import costs and threatening to hurt consumption.

In our opinion, the intervention was a doomed step with the Dollar/Yen likely to resume its rally since the market forces are being driven by hawkish Fed policy. Our opinion won’t change until the Fed gives the all-clear signal or until the Bank of Japan turns hawkish.

For a look at all of today’s economic events, check out our economic calendar.