USD/JPY: bullish attempts faded in Tokyo opening hour

• USD/JPY spreads still the main catalyst for USD/JPY, US GDP limiting/ lasting effect.
• Trump to select Powell as a possible anchor on the dollar?
• Eyes on key US data events this week, including the Fed.

Currently, USD/JPY is trading at 113.79, having posted a daily high at 113.83 and low at 113.66, with bullish attempts, faded in Tokyo. USD/JPY fell from 114.45 to 113.65 in NY, unable to hold in the 114.40 region, from where it also retreated in May and July as a major long-term resistance.

Japan retail sales rise for 11th straight month

The US GDP result was a short-term bonus for those chasing the US yields, with the 10yr treasury yields initially firming slightly from 2.46% to 2.48% (a seven-month high) but quickly reversed after a headline from “Trump sources” claiming Powell was the preferred candidate for Fed Chair. The Fed fund futures yields still price in the chance of a December rate hike at 97%.

Trump to select Powell as next Fed Chair, but what are the implications for the market?

US data (courtesy of Reuters):

• U.S. GDP Advance Q3, 3.00%, 2.50% Rtrs f/c, 3.10% prev.
• U.S. GDP Cons Spending Advance Q3, 2.40%, 3.30% prev.
• U.S. GDP Sales Advance Q3, 2.30%, 2.60% Rtrs f/c, 2.90% prev.
• U.S. GDP Deflator Advance Q3, 2.10%, 1.80% Rtrs f/c, 1.00% prev.
• U.S. PCE Prices Advance Q3, 1.50%, 1.20% Rtrs f/c, 0.30% prev.
• U.S. Core PCE Prices Advance Q3, 1.30%, 1.30% Rtrs f/c, 0.90% prev.
• U.S. U Mich Conditions Final Oct, 116.50, 116.10 Rtrs f/c, 116.40 prev.
• U.S. U Mich Expectations Final Oct, 90.50, 91.20 Rtrs f/c, 91.30 prev.
• U.S. U Mich Sentiment Final Oct, 100.70, 100.90 Rtrs f/c, 101.10 prev.
• U.S. U Mich 1Yr Inf Final Oct, 2.40, 2.30 prev.
• U.S. U Mich 5-Yr Inf Final Oct, 2.50, 2.40 prev.

A busy week ahead previewed - Nomura

"We expect the BOJ to leave monetary policy unchanged at the next meeting," explained analysts at Nomura. 

USD/JPY levels

USDJPY: Reached 114.45 on Friday

Valeria Bednarik, chief analyst at FXStreet explained that in the daily chart, the price remains well above its 100 and 200 DMAs, both converging around 111.40, while technical indicators have turned marginally lower within positive territory, in line with the dominant bullish trend.

"In the 4 hours chart, moving averages maintain their bullish slopes below the current level, but the Momentum indicator holds around 100 while the RSI indicator heads lower at 48, both pretty much neutral, but leaning the scale towards the downside in the short-term."