USD/JPY remains vulnerable to further losses following the below-forecast print for U.S. Durable Goods Orders as the pair initiates a fresh series of lower highs & lows.
The 1.2% decline in demand for large-ticket items may keep the dollar under pressure as it curbs the outlook for growth and inflation, and the Federal Open Market Committee (FOMC) Minutes may offer little to no relief should the central bank relay a more cautious tone ahead of its last meeting for 2017.
With the FOMC on course to raise the benchmark interest rate in December, the committee is likely to reiterate that ‘that economic conditions would evolve in a manner that would warrant gradual increases in the federal funds rate,’ but lackluster data prints coming out of the economy may encourage a growing number of Fed officials to adopt a dovish outlook as ‘several expressed concern that the persistence of low rates of inflation might imply that the underlying trend was running below 2 percent, risking a decline in inflation expectations.’
Keep in mind, the upcoming major U.S. holiday may produce choppy price action in USD/JPY especially as market participation tend to thin ahead of the weekend, but speculation for a dovish Fed rate-hike may fuel the bearish sequence in USD/JPY especially as both price and the Relative Strength Index (RSI) continue to track the downward trends from earlier this year.
USD/JPY Daily Chart
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