From the FXWW Chatroom – This week brings most of the remaining first-tier data releases and Fed speakers (November payrolls and Yellen’s testimony) ahead of the September 16 FOMC meeting. Once these hurdles are cleared, we think it more likely the ~70% probability currently attached to a
December hike will rise toward 90% than fall toward 50%. Rising Fed hike expectations
have so far generally been accompanied by rising risk appetite (the mirror image of the
September experience) and if this continues we expect a combination of USD strength and
“risk-on” markets this week, with the latter further supported by aggressive ECB easing.
This should be a constructive background for USD/JPY pushing through the November
Long USD/JPY position established at 122.82
Stop at 121.60