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USD/JPY Signal - U.S. existing home sales - 22 Feb 2017

Signal details
Entry Price: 
113.25
Close Price: 
113.08
Direction: 
Low
Expiry Time: 
21:00 GMT
Result: 
ITM
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The U.S. dollar rallied late Tuesday fuelled by hawkish comments from various Fed members who reiterated the case of raising the short term interest rates. However, the market reaction was quite mixed with gold prices surprisingly posting gains late into the day. On the economic front, data is relegated to the second-tier data with the U.S. existing home sales figures due for release later today.

Economists polled expect to see the existing home sales rise 5.55 million; this is slightly higher from the 5.49 million existing home sales recorded in December. The USDJPY is a good proxy to gauge the investor sentiment and it is likely that for the moment, sentiment is mixed. Technically, despite the hawkish sounding Fed members, USDJPY is looking a bit weaker especially in the run to today's FOMC meeting minutes release. Nothing new is expected from the minutes with the Fed Chair, Janet Yellen already signaling last week in her testimony to U.S. Congress that policy makers will look to every FOMC meeting to decide on the rate hikes.

Therefore, purchase daily PUT options at 113.25 for a 21:00 GMT expiry time as USDJPY is poised to dip lower in the near term. Technical support at 112.55 is likely to be tested in the near term before we can expect to see any further gains.

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. He has no business nor personal relationships with any mentioned government entities or stocks. 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.