Quarles' FRB Vice Chair's remarks: A buying opportunity on pullbacks!? ~ USD/JPY strategy for December 3 ~

Yesterday,the additional tariffs planned to be imposed from January next year at the U.S.-China summit were postponed for 90 days. It is unclear how the market has priced this in or how it will be interpreted, but it reacted with a risk-on mood.Safe-haven currencies such as the US dollar, yen, and Swiss franc started to be sold.。Conversely, commodity currencies started to rise significantly. Among them, the Australian dollar, which has strong economic ties with China, opened with a large gap.。

With risk-on, starting with dollar and yen selling, I have considered a strategy for USD/JPY.

◎Strategy and positions

Dollar-Yen buying strategy

Buy on dips at 113.35 to 113.15 yen

USD/JPY Time-frame chart

◎Today's outlook

What to watchare the remarks by Federal Reserve Vice Chair Lael Brainard? No, actually it should be a note about Powell? It says Qualls? It’s the remarks by Quarles? It says "Quarles" and "Williams, President of the New York Fed." The exact names: Quarles (Fed Vice-Chair for Supervision) and Williams (President of the New York Fed)..

The keywords to watch are,neutral interest rate,the timing of the end of rate hikes. There is growing attention on how many rate hikes will occur next year and when the tightening will end. As the end nears, dollar buying slows and the dollar weakens.

However, this week there are strong factors supporting dollar buying. The parts of the remarks that led to dollar weakness may present a dip-buying opportunity. I would like to enter at the point where the chart shows a reversal within the white or blue circles above.

Since the entry would be after the remarks,I am considering entering around 23:30–00:30if possible.

↓↓↓ For neutral rates, see the latter part of the following article ↓↓↓

USD/JPY Dip-Buy Strategy! – USD-buying strategy for November 29 –

◎USD/JPY Outlook (Long-term perspective)

I expect the chart below to range within the blue circles. As it heads toward the resistance around 114 yen, I think it will form a convergence triangle with a red parallel channel, or a convergence triangle with a yellow trend line.

USD/JPY Daily chart

If the yellow trend line and red parallel channel break downward, I plan to cut my losses.

Dollar-Yen Buying Strategy! – Bold forecast for USD/JPY by the end of the year