FOMC rate hike is certain, will USD/JPY fall again this time as well!? ~ Strategies, highlights, and event schedule for September 26 ~
◎Current positions and strategy
Continuing from yesterday,CAD/JPY long position remains held. Despite negative remarks about NAFTA renegotiation, there was little impact on CAD and Canadian long-term yields. I think the bad NAFTA news is starting to be priced in. With that in mind, and given Canada still has expectations for further rate hikes and crude oil prices holding high,CAD long-term holding is under consideration.
Today is the FOMC meeting.After the FOMC rate hike, USD/JPY tends to fall with high probability. As noted, since we are near the daily chart resistance line, another drop in USD/JPY after the FOMC rate hike is highly possible. There are several factors, such as the dot plot, buta rate hike does not equal dollar buying.
◎Today's highlights
1)US-China trade talks
In the US-Japan trade talks, the specifics are still not clear. NAFTA renegotiation with Canada hasn't reached an agreement. With China, there is no sign of ending the trade war. Pay attention to headlines related to trade talks.
2)UK politics, Brexit headlines
The pound has largely recovered from Friday’s drop following Prime Minister May’s remarks. In the UK, various rumors are circulating. Even if bad news appears, it is being priced in one by one. It is dangerous to jump in when rumors cause big moves in the pound.
3)FOMC
Today’s main event, I think. The FOMC policy rate decision and rate hike. It’s almost certain. The focus is less on the rate hike itself and more on the statement and the dot plot. Also, perhaps Jerome Powell’s press conference. Watch the number of rate hikes this year and next year.
Also, one thing to be careful about at the FOMC is long-term yields. Long-term yields are rising slowly even as the dollar weakens. After the rate hike is announced at this FOMC, a further drop in USD/JPY is quite possible. Exercise caution. Technically, the daily chart also appears to be near a resistance level, so be wary of a pullback.
USD/JPY Daily chart
4)Pre-event集中 Day
Tonight’s FOMC and many events scheduled for tomorrow. As it is the end of the month, bold moves may be limited.
◎Today’s economic indicators schedule
Wednesday, 9/26
UK Labour Party Conference
US-Japan summit
02:00 USD 5-year note auction
07:45 NZD Trade Balance
20:00 CZK Czech policy rate announcement
23:30 USD Crude Oil Inventories
Thursday, 9/27
Italy budget proposal submission
03:00 USDFOMC policy rate and statement release
03:30 USDPowell FOMC press conference
06:00 NZDPolicy rate and statement release
◎Notes
↓↓↓ recording daily currency strength graphs, world stock prices, country long-term yields, and statements of officials. ↓↓↓
Record on September 25, 2018 – Official statements and long-term yields
