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Thomson Reuters
Sep 14 - 12:12 PM
USD/JPY - COMMENT-USD/JPY Rally Leans On Old Friend - Fed Expectations
First appeared on eFXplus on Sep 14 - 10:20 AM

USD/JPY is shrugging off weak retail sales and industrial production data in a bid to keep its rally alive, leaning on the familiar influence of rising Fed rate-hike expectations.
It's also getting some help from robust upward revisions to July retail sales, as well as yesterday's bullish close above key Fibo resistance at 111.88.
If it can post a close above August's 112.15 high to solidify yesterday's breakout, the door would open to retesting July's 113.18 peak by the 61.8 Fibo of the 2016-18 drop at 113.27, the 200-WMA near 113.30 and this year's high at 113.40.
Longer-term traders will note that this week's range is the first one wholly above the downtrend line since 2015, now at 110.78. Continuing the rally may require overcoming any fresh White House tariff initiatives that may emerge.
But, the markets of late have been willing to overlook impending protectionist threats and derisking linked to EM ructions, which has allowed USD/JPY to trade more on Treasury-JGB yield spreads that have been on the rise since late August.

Chart: Click here

Chart: Click here

Source:
Thomson Reuters IFR Markets

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