TechnoMeter

JPY strength continues into the close of February and in anticipation of President Trump’s speech that will be analyzed for details on the timing of stimulus that could revive the reflation trade. There is a strong positive correlation to yields of US Treasuries and USD/JPY and a clear message from President Trump that inflationary inducing policies are on their way would likely help boost USD/JPY. Lack of details could keep the market on its current course of giving back-post election gains, most notably in JPY crosses. An additional fundamental note worth considering is that March is the last month of the Japanese Fiscal Year, which may lead to further JPY demand in the coming weeks from Japanese accounts that could push USD/JPY lower.



As of Tuesday, the Japanese Yen is the strongest currency in G8 FX on a relative basis, when analyzed on an H4-chart against a 200-DMA. From a momentum perspective, it’s difficult to tell when the momentum will stall. Traders who track momentum can look to RSI(5) on the Daily Chart to see if a higher low in RSI(5) aligns with the chart support of the Ichimoku Cloud and Andrew’s Pitchfork drawn from the closing low of last Summer. The 100-DMA also aligns with the Ichimoku Cloud base at 111.74.


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