USD/JPY shorts in play

Jerome Powell has surprised the markets with a more dovish speech and did not mention a future 'gradual path of rate hikes for next year'. The US dollar fell quickly on the speech and the S&P500 ticked up 40 points after Powell's address..Trump will be pleased.

Powell stated that he had no pre-set policy path and would be dependent on the economic data and that rates were just below neutral range. This implies that after a probable December rate hike the Fed would be open to pausing hikes in 2019 to assess how much they do in fact need to rise. With Oil falling as well, many analysts expect that to reduce inflationary pressure giving less reason for the Fed to keep on a gradual hiking path. Adam pointed out that the reference by Powell to gradual hikes were all in the past tense. This is a more dovish outlook from Jerome Powell.

So, this now raises a fairly bearish outlook for the USD/JPY pair. The prospect of the G20 on Friday and Trumps mention of Auto-Tariffs all place a potential for further USDJPY weakness. I like a USD/JPY short here from a retracement to the 100 EMA and 50% Fib level.

Update: Now that price has moved down further from the screen shot below. I like the 100 and 200 EMA on the 15 minute chart as a location to join this short USD position.