Who’d have thunk it eh?

You’ve got a strengthening economy and rising inflation. That’s two of the biggest ingredients for raising rates. We even had the fear that inflation would fall today. Even real weekly wages were up (although not setting any records)

US real weekly earnings 20 11 2014

US real weekly earnings 20 11 2014

On that basis the buck should be flying but it’s not. That’s a classic case of a market that’s gone too far too fast and gotten way ahead of itself.

Do you want to bet against it right now though? If you weren’t in up above in USD/JPY then this move lower is not for chasing.

BTFD is still in force but you need to pick your levels and I don’t see anything until at least 117.00 and 116.75/80, and even that doesn’t look overly strong.

USD/JPY H4 chart 20 11 2014

USD/JPY H4 chart 20 11 2014

Keep an eye on Treasury yields which, like after the FOMC, have fallen again and that will be adding to pressure on the buck