Will today’s FOMC Minutes push the USD/JPY back above 109?

By Admiral Markets

Source: Economic Events July 10, 2019 – Admiral Markets’ Forex Calendar

Today, we want to focus on the FOMC Minutes which will be published later today and their potential impact on the USD/JPY.

In one of our last technical pieces on the USD/JPY our headline read: “USD/JPY positive on Mnuchin’s trade deal comment – sell the bounce?”

That was shortly before the G20 summit in Osaka, and initially, the USD/JPY was again sold against the upper trendline. But the bearish momentum which was taken on wasn’t strong enough to push the currency pair towards and below new yearly lows around 106.70.

Instead, the USD/JPY broke out of the downtrend channel and is now eyeing 109.00 again, mainly driven by a very solid NFP reading last Friday. The reason that is noteworthy is that, as a result, the probability of a 50bp rate cut from the Fed coming on the July 31 was completely priced out and drove 10-year US yields higher, and thus the USD/JPY.

With that in mind, today’s FOMC Minutes will be carefully reviewed for any signs noting if a 50bp rate cut is still an option with a small probability, even after a strong job report.

If yes, the USD/JPY has a serious chance of another aggressive push lower, and 106.70 could be on the table again into the second half of the week.

If no, in our opinion there seems to be no reason not see the USD/JPY make it back above 109.00, even though we stay mid-term sceptical for the long-side in the currency pair.

Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY Daily chart (between April 20, 2018, to July 9, 2019). Accessed: July 9, 2019, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of USD/JPY increased by 13.7%, in 2015, it increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, meaning that after five years, it was up by 4.1%.

Investing in Forex with Admiral Markets

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
9. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.

By Admiral Markets