USD/JPY rallies above 117.00

USD/JPY rallied higher from 116.81 to 117.24 early in the Asian session. A brief dip back to 116.89 was followed by another move higher, to a fresh trend high of 117.39. A larger majority on the Bank of Japan Policy Board supporting “Abenomics” (current policy easing program) weakened yen. Both the BoJ and Abe regime, should it survive the general elections called for December, look to pull out all stops to achieve their goals of 2% inflation and lasting growth. In this regard, the BoJ could very well ease again next year.

EUR/USD opened in Asia at 1.2536 after EUR traded higher across the board yesterday on the better than expected German ZEW sentiment report. Heavy EUR/JPY buying added further support. Under light pressure in Asia on USD/JPY-led USD strength, EUR/USD fell back from 1.2537 to 1.2513. EUR/JPY buying helped cushion the move down. EUR/USD looks to be in consolidation mode with the market still very short and given tentative signs the German economy may be bottoming. FOMC minutes out tonight could also prove a bit more dovish than currently eyed. This could see a break above 1.2580 and extension of the correction higher. If the minutes prove more hawkish, a test/break of 1.2400 is likely.

GBP/USD fell back alongside EUR/USD from 1.5633 to 1.5599 and towards 1.5593, the low Friday. Stops are eyed sub-1.5590. EUR/GBP consolidated last night’s gains between 0.8017-23 in Asia.

USD/CHF was better bid alongside USD/JPY, up modestly from 0.9584 to 0.9600. EUR/CHF treaded water again between 1.2012-14 with the market still on the look-out for possible SNB action ahead of 1.2000. A low of 1.20095 was seen yesterday.

AUD/USD opened in Asia at 0.7914 and was under pressure for most of the session. USD/JPY strength helped as this gave USD a better bid. Long liquidation was noted too ahead of tonight’s FOMC minutes. From an early high of 0.8721, AUD/USD fell back to 0.8655.

The post USD/JPY rallies above 117.00 appeared first on Forex Circles.

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