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USD/JPY forex signal - FOMC Meeting minutes - 21 Feb 2018

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The much anticipated FOMC meeting minutes will be released today at 19:00 GMT. The meeting minutes will cover the late January Federal Reserve meeting. At the first meeting of the year, policy makers voted to leave interest rates unchanged at 1.50%. It was also the Fed meeting that was chaired by the outgoing governor, Janet Yellen.

The meeting minutes today will be an important data point for investors as they look for any potential clues on the Fed's plans on the next interest rates.

The Federal Reserve officials, back in December noted that they forecast three interest rate hikes this year. The recent uptick in the U.S. economic data adds weight to this view and by some estimates; the futures markets are already assigning an above 80% probability for an interest rate hike as early as March.

The recent inflation data from the U.S. has also been supportive of this view. With the next meeting due in March, the new Fed Governor, Jerome Powell will be hosting the first Fed meeting. For the markets, Powell is viewed as a continuation to Yellen's policies.

The forex signal for the day is USDJPY. The currency pair was seen extending gains in the past few days after price initially posted a low. The strong reversal off the lows near 105.91 has sent USDJPY to retrace the losses. However, with little to no pullback to the reversal, we expect to see that the rally will be capped near the resistance level of 108.46.

Therefore, for us is ideal to go long at 107.46 on a modest dip with stops at 107.16 while targeting the resistance level of 108.46 as we expect USDJPY to close higher on the day.

forex signal usdjpy 21 feb 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.