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Can USD/JPY Get its Groove Back?
Despite relatively strong signals from the US economy and the steady rate of US yields USD/JPY has been under relentless selling assault for the past two days with the pair off by more than 200 pips since its recent highs after the NFP reaction.
There is no serious red flags to suggest that the Fed may pull back yet again and refuse to hike rates as expected at the FOMC meeting next week, but the market nevertheless appears concerned with pre event profit taking already well under way.
One factor that could change the momentum and put the bid back into the pair once again is any signs of improvement from the US consumer. Tomorrow the market will get two very important economic indicators -- US Retail Sales and the U of M sentiment report. While the forecasts are just for a mild rise any upside surprise could turn sentiment back towards the buck and push the pair above the 122.00 figure. On the other hand a miss could really set off some hand wringing and drop USD/JPY into fresh multi week lows toward the 120.00 support