The USDJPY pair remained under some selling pressure at the start of a new trading week and fell below the 111.00 handle, or 1-1/2 week lows. hat should traders expect next? This will be highlighted in the following 23 July USDJPY Fundamental Analysis.
23 July, OctaFX – The pair extended last week’s sharp retracement slide from six-month tops and continued losing ground for the third consecutive session amid persistent US Dollar weakness, triggered by the US President Donald Trump’s comments.
Trump’s comments keep exerting downward pressure on the USD
During an interview with CNBC, Trump upped the ante on the trade war front and said that he was prepared to impose tariffs on all $505 billion in Chinese goods imported to the US. Trump also criticized the Fed’s monetary tightening and showed displeasure over the recent USD strength.
Market participants, however, remain convinced that the Fed will stick to its plan to raise interest rates at least two more time in 2018 and the same was evident from the US Treasury bond yields.
In fact, the benchmark 10-year yield held around the three-week high level of 2.89% and might now contribute towards limiting further downside.
23 July USDJPY Fundamental Analysis
The Japanese yen opened the week in positive territory amid speculation that the Bank of Japan (BOJ) is considering tweaking its bond-buying program next week. USDJPY is down 0.5% on Monday, extending its two-day slide to roughly 1%.
The pair now sits at 110.84. Last week, USDJPY surged to its highest level in six months. Short-sellers are being told to target USDJPY at 108.10, with a stop limit at 113.40, according to Barclays.
This suggests that analysts are pricing a bigger decline for the pair amid heightened trade tensions involving the US.
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