HALISTER1: USD/JPY May Eye 100-DMA If CPI Adds to Chance of QQE: Analysis

USD/JPY May Eye 100-DMA If CPI Adds to Chance of QQE: Analysis

(Bloomberg) -- USD/JPY may decisively breach 50-DMA resistance and move toward 100-DMA short-term if low Japan CPI raises expectations of additional QQE, Bloomberg strategist David Finnerty writes.
  • USD/JPY down 0.6% today at 109.53; 50-DMA at 109.84, 100-DMA at 112.61
  • April CPI seen -0.4% y/y vs -0.1% in March, according to median est. of economists in Bloomberg survey; core CPI ex- food and energy forecast steady at +0.7%; data due tomorrow 8:30am local time
  • Continued low inflation increases probability of additional QQE if BOJ is to meet its 2% goal without moving timeline again
  • BOJ refrained from additional easing in April as it gauged impact of its negative rate, indicating it may wait to July so it had enough time to measure policy’s effectiveness
  • FX pair being supported by market repricing of Fed hike following several hawkish comments by FOMC members; increased expectations of additional QQE should further support FX pair
  • MACD has bullishly risen above zero, already above signal line
  • NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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