USDJPY – Dollar Likely To Hit Fresh Lows Vs Yen, Eyes Fed
Aayush Jindal
Key Highlights
US Dollar continued to weaken versus the Japanese yen, and may post further losses in the near term.
The daily chart of USDJPY is signaling a clear downtrend, and suggesting that the pair may trade towards 104.00.
Today in the US, there is a major release, as the Fed interest rate decision will be announced.
The forecast is of no change in the rates from 0.5%, and the market will be eyeing the statement for more details.
USDJPY Technical Analysis
The US Dollar suffered a lot of losses against the Japanese yen recently, as there was a continuous downtrend in USDJPY which is clearly visible on the daily chart.There is a bearish trend line formed on the daily chart of USDJPY, which is acting as a barrier for an upside and pushing the pair down.On the downside, the next target of sellers looks like around the 1.236 extension of the last leg from the 105.53 low to 111.38 high. The daily RSI is well below the 50 level, which is a sign that more losses are possible in USDJPY.
Fed Interest Rate Decision
Today in the US, there is a monster release that may impact the US dollar and all major pairs. The Fed interest rate decision will be announced, which is forecasted to remain unchanged from 0.5%.However, the market will be keeping a close eye on the FOMC economic projections report in which the central bank highlights projection for inflation and economic growth over the next 2 years.The recent disappointing NFP report might play a major role in the upcoming decision, and it is the main reason why the market is not expecting any increase in the rates.
Australian Westpac Consumer Confidence
Today in Australia, the Westpac Consumer Confidence was released by the Faculty of Economics and Commerce Melbourne Institute. It captures the level of sentiment that individuals have in economic activity reflecting respondents' evaluations of their family finances and was not forecasted to post any decline in June 2016.However, the Westpac Consumer Confidence index declined from 103.2 to 102.2 in June 2016. As a result, there was a minor downside reaction the Aussie Dollar after the release.
There is a bearish trend line formed on the daily chart of USDJPY, which is acting as a barrier for an upside and pushing the pair down.On the downside, the next target of sellers looks like around the 1.236 extension of the last leg from the 105.53 low to 111.38 high. The daily RSI is well below the 50 level, which is a sign that more losses are possible in USDJPY.