USD/JPY will likely probe 150 barriers for three reasons
Oct 11 (Reuters) -USD/JPY looks set to head higher to probe the psychological 150 level where FX option barriers are said to reside, helped by to seasonal trends, the fundamental picture and the technical outlook.
USD/JPY in each October since 2000 has posted a positive return in 16 of the last 24 years, or 67% of the time, including in 2021, 2022 and 2023.
The Federal Reserve and Bank of Japan rates will partially converge, as recent comments from the Japanese central bank and government officials suggest, there is still room for a rate hike in December. However the gap in rates between the two central banks is expected to remain wide, which should keep USD/JPY's underlying bias on the upside.
USD/JPY has risen within the thickening cloud that currently spans the 145.10-151.82 region. The scope is growing for bigger gains to the daily cloud top, knocking out 150 barriers on the way up. Spot is technically bullish as demonstrated by it closing five days in a row above the 148.13 Fibo, a 38.2% retrace of the 161.96 to 139.58 (July to Sept) EBS drop.
For more click on FXBUZ
USD/JPY Seasonality Chart: https://tmsnrt.rs/3Y7Na7j
Policy Rate Expectations Chart: https://tmsnrt.rs/4f3AeVH
Daily Chart: https://tmsnrt.rs/3zUbCzD
(Martin Miller is a Reuters market analyst. The views expressed are his own)
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