USDJPY, H4
USDJPY rallied to a one-month peak of 111.32, partly reflecting broader dollar gains and partly broader yen weakness. This hit my target from Thursday of 110.60 for a net gain of 55.7 pips. “The recovery this morning (May 26), back again over 110.00, suggests that it was a big seller of the JPY (probably in Asia) and they were filled over night and that last Friday’s 110.60 area is again in reach. The risk reward on the trade this morning is acceptable, yesterday the target was too close to justify the trade”.
The gains in the U.S. currency reflect the rekindling of expectations in Fed tightening expectations; while, despite this, generally firmer stock markets in Asia have encouraged yen selling. The consensus view is that the BoJ will also expand monetary policy by July. The Apr-25 peak at 111.89 provides the next upside waypoint (Target 2) for USDJPY. Japanese retail sales data today fell 0.8% y/y in April after -1.0% in March. This was slightly above the median forecast for a 1.2% y/y contraction. While EURJPY rose to 10-day highs EURUSD ebbed to an 11-week low of 1.1098. The Mar-16 low at 1.1057 provides the next downside focal point. AUD-USD dipped to a six-day low, nearing three-month lows, while the NZDUSD traded into two-month low terrain.
Janne Muta
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
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