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USDJPY – Back to 110.00?
One of the better setups in trading is when the news on a pair is positive but the price action is negative. That suggests further downside action for USDJPY which saw just this dynamic today as it failed to hold fresh highs after a strong ADP number.
As Kathy noted earlier today, “If any part of the employment report misses, the market will rush to downgrade its expectations for June tightening. Between the softness in U.S. data and the slowdown in China, the case for tightening is weakening. Yesterday’s Beige Book report was not overwhelmingly optimistic with some Fed districts noting that the optimism has waned. We believe the Fed will raise interest rates this month but recent developments cast doubt on the odds for additional tightening.”
So any disappointment in tomorrow’s NFP report could quickly turn to a selloff in USDJPY which could take it towards the key target of 110.00 as short press their case.