USDJPY – Down
Event to watch out for today:
17:00 EET. USD – ISM Manufacturing PMI
USDJPY:
For the second day in a row, the Japanese yen (JPY) gained buyers and is still close to the two-week high it reached against the US dollar. However, there are multiple factors affecting the market, which may discourage traders from making aggressive bets on the direction of the market. Therefore, it is advisable to exercise caution before taking a position on the near-term direction of the market. Amid concerns regarding escalating geopolitical tensions in the Middle East, the Federal Reserve’s less dovish interest rate outlook may continue to negatively impact investor sentiment. This, coupled with expectations of an imminent Bank of Japan (BoJ) policy change, is acting as a tailwind for the yen.
Meanwhile, the recent drop in US Treasury yields has narrowed the rate differential between the US and Japan, which should further support the Japanese Yen. The US Dollar (USD) is near its highest level since 13 December, supported by the Fed’s decision not to cut interest rates in March. This could help limit the decline of the USD/JPY pair. However, the USD is being held back by the disappointing ADP report on US private sector employment released on Wednesday and the decline in US Treasury bond yields. It is advisable to wait for strong buying before positioning for a resumption of the currency pair’s uptrend.
Trading recommendation: Trade in the channel 146.00 – 147.70 on bounces from the levels
Swap Free is a special account, on which swaps are not credited. When a position is carried over to the next day, you pay only commission that is not bound to interest rate of the currency. Islamic account is an excellent account type for both traders working on long-term strategies and muslim traders practising Shariah law.
You may check other analytical reviews on FreshForex website. Source: freshforex.com.
