- USD/JPY has been on the back foot after Fed's Powell opened the door to rate cuts.
- The US consumer is in focus, and trade talks are eyed.
- Mid-July's daily chart paints a mixed technical picture.
USD/JPY Forecast Poll
The FXStreet Forecast Poll about USD/JPY (US Dollar Japanese Yen) is a sentiment tool that highlights our selected experts' near and medium term mood and calculates trends according to Friday's 15:00 GMT price.
How to Read the Forecast Poll charts
This chart informs about the average forecast prices, and also how close (or far apart) sit the numbers from all participants surveyed that week. The bigger a bubble on the chart means more participants targeting a certain price level in that particular time horizon. This distribution also tells if there is unanimity (or disparity) among participants.
Each participant's bias is calculated automatically based on the week's close price and recent volatility. Drawing from those results, this chart calculates the distribution of bullish, bearish, and sideways forecast prices from all participants, informing about sentiment extremes, as well levels of indecision reflected in the number of “sideways”.
By displaying three central tendency measures (mean, median, and mode), you can know if the average forecast is being skewed by
In this chart, the close price is shifted behind so it corresponds to the date when the price for that week was forecasted. This enables the comparison between the average forecast price and the effective close price.
This chart tracks the percentage change between the close prices. Bouts of volatility (or extreme flat volatility) can be then compared to the typical outcome expressed through the averages.
This measure is basically an arithmetical average of the three central tendency measures (mean, median, and mode). It smooths the typical outcome eliminating any possible noise caused by outliers.
Together with the close price, this chart displays the minimum and maximum forecast prices collected among individual participants. The result is a price corridor, usually enveloping the weekly close price from above and below, and serves as a measure of volatility.
WHAT IS THE FORECAST POLL AND WHY TO USE IT?
The Forecast Poll is a sentiment tool that highlights near- and medium-term price expectations from leading market experts. It is a sentiment indicator which delivers actionable price levels, not merely “mood” or “positioning” indications. Traders can check if there is unanimity among the surveyed experts - if there is excessive speculator sentiment driving a market - or if there are divergences among them. When sentiment is not at extremes, traders get actionable price targets to trade upon. When there is deviation between actual market rate and value reflected in forecasted rate, there is usually an opportunity to enter the market.
You can also use the Forecast Poll for Contrarian thinking strategies. Gonçalo Moreira, Research expert at Fxstreet, explains: “People involuntarily follow the impulses of the crowd. Sentiment indicators, in turn, lead to “contrarian” thinking. The Forecast Poll helps traders detect sentiment extremes and thereby limit their eventual toxic herd behavior.” Read more on Contrarian Approaches with Sentiment indicators
HOW TO READ THE GRAPHS?
Besides the table with all participants’ individual forecast, a graphic representation aggregates and visualizes the data: the Bullish/Bearish/Sideways line shows the percentage of our contributors on each of these forecast biases.
This graph is available for each time horizon (1 week, 1 month, 1 quarter). We also indicate the average price forecast as well as the average bias.
2017 FORECAST FOR USD/JPY
In our USD/JPY Forecast Poll 2017, our dedicated contributors expect the bullish trend to stop in the second half of the year. By the end of the year 2017, the average forecast for the pair is 120,7500. Read more details about the poll
In the last 12 months, from Feb 2016 to Feb 2017, the maximum level for the USD/JPY was 119 ¥/USD (on January 3rd 2017), and the minimum, 100¥/USD (on August 18 2016)
MOST INFLUENTIAL POLITICAL EVENTS IN 2017 FOR USD/JPY
Number one political event in 2017 for the USD/JPY pair is the Trump Presidency: tax cuts and government spendings strategy, geopolitics and international relations of the US, including decisions related to trade deals and multinational alliances.
In Japan, Forex traders will keep an eye on the Tokyo Metropolitan Assembly (the prefectural parliament of Tokyo) election in July.
BONDS THAT INFLUENCE THE MOST USD/JPY
Bonds whose moves can affect the USD/JPY pair: US 30y Tbonds, US 10y, JGB 2y, JGB 10y, JGB 30y. This group also includes the following currency pairs: EUR/USD, GBP/USD, AUD/USD, USD/CHF, NZD/USD, USD/CAD, EUR/GBP and USD/CHF