USDJPY Fundamental Analysis – June 19th 2019

All eyes will be on today’s FOMC statement by the US Fed which will be released in the US evening trading session. Expectations call for no change to its interest rate, but for a softening of the language which is meant to prepare markets for an interest rate cut in July and potentially one more before the end of the year. US President Trump has long criticized the US central bank for increasing interest rates which he believes have harmed the economy. Stock broker recommendations have highlighted potential US Dollar weakness ahead as the central bank may be on the verge of a monetary policy reversal the Trump administration will most certainly call a victory. Will today’s press release after the FOMC interest rate announcement pressure the US Dollar to the downside?

Here is the key factor to keep in mind today for US Dollar trades:

• US FOMC Interest Rate Decision: The US FOMC Interest Rate Decision is predicted to show Upper Bound interest Rates at 2.50% and Lowe Bound Interest Rates at 2.25%. Forex traders can compare this to the previous US FOMC Interest Rate Decision which showed Upper Bound interest Rates at 2.50% and Lower Bound Interest Rates at 2.25% The Interest Rate on Excess Reserves is predicted at 2.35%. Forex Traders can compare this to the previous Interest Rate on Excess Reserves which was reported at 2.35%.

As the global economy continues to cool off, supported by a swath of economic reports released across the globe over the past twelve months, Japan printed a smaller than expected trade deficit on the back of an unexpected contraction in imports while exports slumped while a global recession is approaching. The Japanese Yen, a safe haven currency, traditionally outperforms during times of turbulence. How will the Bank of Japan, already under growing pressure for its stimulus program in place for over two decades, react to the recession threat? Will the Japan Yen continue to attract bids and how will the USDJPY be impacted by today’s FOMC announcement? Is your forex trading account prepared to profit from anticipated volatility?

Here is the key factor to keep in mind today for Japanese Yen trades:

• Japanese Trade Balance: The Japanese Trade Balance for May was reported at -¥967.1B. Economists predicted a figure of -¥1,200.0B. Forex traders can compare this to the Japanese Trade Balance for April which was reported at ¥56.8B. The Japanese Adjusted Trade Balance for May was reported at -¥609.1B. Economists predicted a figure of -¥806.9B. Forex traders can compare this to the Japanese Adjusted Trade Balance for April which was reported at -¥170.2B. Exports for May decreased by 7.8% annualized and Imports decreased by 1.5% annualized. Economists predicted a decrease of 8.4% and an increase of 1.0%. Forex traders can compare this to Exports for April which decreased by 2.4% annualized and to Imports which increased by 6.5% annualized.

Should price action for the USDJPY remain inside the or breakdown below the 107.800 to 108.800 zone the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 108.250
• Take Profit Zone: 104.600 – 105.300
• Stop Loss Level: 109.000

Should price action for the USDJPY breakout above 108.800 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 109.150
• Take Profit Zone: 109.900 – 110.650
• Stop Loss Level: 108.800

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