17 Juli 2024, USD/JPY
USDJPY:
The USD/JPY pair is continuing to rise, approaching 158.40, amid selling pressure around the Japanese currency at the start of the Asian session on Wednesday. Later on Wednesday, data on building permits, housing starts, industrial production and the Federal Reserve's Beige Book will be released, along with speeches from Federal Reserve (Fed) officials Barkin and Waller.
Nevertheless, the interest rate differential between Japan and the US continues to exert a downward pressure on the yen, creating a tailwind for the USD/JPY pair. Earlier this month, the yen reached a low of 161.94, its lowest point since December 1986.
The Tankan producer sentiment index for Japan rose from 6.0 in June to 11.0 in July. This is the first time the figure has been above 10 in four months, indicating an increase in economic activity.
Conversely, the decline in the US Consumer Price Index (CPI) in June has increased the probability of a Federal Reserve interest rate reduction. The possibility of a rate cut by the Fed in September may limit the potential gains of the pair. The CME FedWatch Tool indicates that there is a 100% probability of a Fed rate cut by September, up from 70% a month ago.
Trade recommendation: Trading predominantly Sell orders from the current price level.
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