US Fed Chair Yellen and Vice Chair Fischer signalled a potential interest rate rise as soon as next month at the Jackson Hole Symposium. Yellen opened the door for the coming rate-hiking, ‘I believe the case for an increase in the federal funds rate has strengthened in recent months’. Fischer backed up the hawkish statement by noting ‘the Chair’s comments are consistent with a possible rate hike in September.’ Following the speech, USD Index jumped higher above 95, dragging down JPY by 1.2%, AUD by 0.7% and EUR by 0.09%. The market has finally realized that a September rate rise is a live option and the Fed might raise rates twice within this year. The odds of a September rate hike increase to 42% and 62% by December. Friday’s NFP US Jobs Report is important because Yellen reemphasized that the decision remained data-dependent.
The increase likelihood of coming rate-hike in US will probably lower the Aussie dollar and reduce need for further RBA rate cut. After Jackson Hole Symposium, AUDUSD broke the 0.7586 support level and is threatening a new downtrend. The RBA board will next meet on September 6, before when there will be a key Chinese data, Caixin manufacturing PMI and Australian retail sales data coming out on this Thursday.
USD/JPY was already on the front foot before BOJ’s Kuroda’s dovish statement added to the USDJPY rally. Quoted over the weekend ‘there is ample space for additional easing’. USDJPY ramped up above 102 at the Asian open, within the striking distance of next resistance level 102.53.
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8/29/2016 6:03 AM |
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Trend daily chart  (=) |
Trend weekly chart (=) |
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USD/JPY Intraday: further upside. |
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Pivot: 101.30
Our preference: long positions above 101.30 with targets @ 102.50 & 102.80 in extension.
Alternative scenario: below 101.30 look for further downside with 100.85 & 100.50 as targets.
Comment: the RSI advocates for further advance.
Supports and resistances:
103.00 **
102.80 **
102.50 ***
102.25 Last
101.30 ***
100.85 ***
100.50 ** |
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