Two Fed members are giving speeches, and the comments of at least one of them are boosting the USDJPY.
President of the Chicago Federal Reserve Bank and Fed member Charles Evans has been quoted on the newswires as saying that he would have an open mind to another Fed rate cut in 2019 if the data “came in that way.”
However, Evans was quick to apply some caution on his initial statement by saying that “…at the moment, the current setting is okay.” He also expected the inflation rate to stay above 2% with the current rate stance.
Evans had noted in an earlier comment on the day that wages were on a good growth path, and that he expected the “quite solid” US economy to expand by 2% to 2.5% going forward.
Fellow Fed member Lael Brainard did not make any references to the monetary policy in his own comments delivered elsewhere.
The suggestion by Fed member Evans that he was open to data-driven interest rate cuts later this year is yet the first suggestion by any member of the FOMC that another rate cut was possible.
However, he re-echoed the opinions of the Fed Chairman Jerome Powell in which he said at the post-rate press conference that the Fed would only take action if required to do so.
The USDJPY has gained some traction on the comments of Evans and is now challenging intraday resistance levels of 107.82 (Sep 11 and 24 highs). A violation of this level would open the door for a test of the highs of Sep 13 and Sep 18 at 108.28.
Failure to break the intraday resistance high could cause a retreat to the Sep 10 low at 107.19. There is also a possibility of a range trade between the Sep 10 low and the current intraday highs.