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USDJPY Set For Highest Weekly Close Since Jan 2016

FOREX
  • Another firm session for major equity indices continued to underpin USDJPY strength on Friday. The pair remains on an upward trajectory following last week’s significant break of 116.35 and impressive three big figure extension in just over a week.
  • This week’s important technical break was the move through resistance at 118.60/66, the Jan 3 ‘17 and Dec 15 ‘16 highs, strengthening current bullish technical conditions. USDJPY looks set to post its highest weekly close since January 2016.
  • The CHF has outperformed, rising 0.85% against the Euro back to 1.0300. EURUSD retraces a part of recent impressive gains, but the bias remains for further corrective rallies.
  • Meanwhile the greenback trades more mixed with the ICE dollar index residing 0.3% in the green to finish the week. Despite the overall greenback retreat this week, Friday’s boost comes amid hawkish commentary from both Fed’s Waller and Kashkari, emphasising the latest set of projections from Wednesday’s FOMC meeting.
  • Looking ahead, Fed Chair Powell is due to speak on Monday about the economic outlook at the National Association for Business Economics Annual Economic Policy Conference. Japan will be out for a local holiday.
  • On the data calendar, UK inflation data precedes the UK budget release on Wednesday. European Flash PMIs are scheduled for Thursday. On the central bank front, SNB and Norges Bank decisions are risk events of note.

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