The U.S stock markets were firm into the close overnight in anticipation, or the hope, of a rate cut as soon as September following a set of minutes that had something for everyone. This enabled USD/JPY to drift higher.
The USD/JPY has been cruising to the upside since mid-month lows and that spike to test the 107 handles. The Dollar maintains a bullish bias and the yen is floundering, unable to gain upside traction the absence of panic-mode markets. We are indeed in a market lull and until there is some fresh confirmation of sentiment, one way or the other, there is no direction in the pair over the medium term. However, we now enter the remaining days of the week where there could be a gust of wind to kick up some dust from the eurozone PMIs and, not least, the Jackson Hole.
The Eurozone PMIs have the potential to really stir up a risk-off scene in markets should they come in markedly lower than expected, reminding markets of the potential for a global recession.
USD/JPY LONG (Buy)
ENTER AT: 106.430