USD/JPY Price Analysis – July 17, 2023
Daily Price Outlook
USD/JPY has witnessed a decline from 145.06 to a low of 138.75 so far today, with the next target being the support turned resistance at 137.90. The pair remains vulnerable to testing the 50% Fibonacci retracement support near 137.40.
Meanwhile, GBP/JPY has rebounded from around 181.00 as anticipation builds for consecutive interest rate hikes by the Bank of England (BoE). The market expects the BoE to announce a second substantial rate hike at its upcoming monetary policy meeting in August, which has generated buying interest in the currency pair.
Previously, investors were expecting a modest 25 basis points increase when BoE Governor Andrew Bailey surprised the market with a 50 basis points hike to 5% in June. The sudden rise in the Consumer Price Index (CPI) headline and the record high core inflation of 7.1% prompted the central bank to implement a significant rate hike.
Looking ahead, investors are eagerly awaiting the Bank of Japan's (BoJ) interest rate decision, scheduled for next week. Seisaku Kameda, a former senior economist at the BoJ, suggested that the central bank is unlikely to change its interest rate policy and will likely maintain its economic projections for 2024 and 2025.
USD/JPY - Technical analysis
The USD/JPY pair experienced a strong support level at 137.35, leading to a noticeable upward rebound and a subsequent test of the key resistance level at 139.17.
However, it is worth mentioning that the price failed to break above this level and has started to show signs of consolidation.
This indicates a potential resumption of the correctional bearish trend in the upcoming sessions, with a target of revisiting the support at 137.35. Breaking below this level would further push the price towards the next correctional target at 135.55.
The current negative overlap of the stochastic indicator reinforces the likelihood of a resumption of negative trades today, supporting the overall bearish bias unless there is a breach of the resistance level at 139.17 and a sustained hold above it.
USD/JPY Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- USD/JPY faces temporary downward pressure but shows signs of resuming the bullish wave.
- The main bullish trend scenario remains active, targeting 146.10.
- Support and resistance levels for today are at 144.00 and 145.50, respectively.
The USD/JPY pair experienced a temporary downturn, testing the support line of the intraday bullish channel. However, today's market open shows a bullish inclination, driven by positive signals on the four-hour timeframe. This suggests a potential continuation of the main bullish trend.
As a result, the next target for the pair is set at 146.10. It's worth noting that if the price breaks below 144.25, a short-term bearish correction could occur before resuming its upward movement.
For today's trading, the expected range is between support at 144.00 and resistance at 145.50.
USD/JPY Price Chart – Source: Tradingview
USD/JPY - Trade Idea
Entry Price – Buy Above 144.166
Take Profit – 145.082
Stop Loss – 143.634
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$916/ -$532
Profit & Loss Per Micro Lot = +$91/ -$53
USD/JPY Price Analysis – July 03, 2023
Daily Price Outlook
In the search for fresh catalysts to sustain its intraday gains, the USD/JPY pair hovers around 144.60, facing conflicting risk factors and disappointing economic data from Japan. This follows a reversal of the previous day's decline from its highest levels since November 2022.
The Bank of Japan's (BoJ) dovish monetary policy stance finds support in Japan's Tankan Manufacturing Survey for Q2 2023, which indicates expectations of low inflation.
Furthermore, the final negative reading of Japan's Jibun Bank Manufacturing PMI for June, matching earlier forecasts at 49.8, may have weighed on the USD/JPY exchange rate.
A notable divergence in monetary policy between the Federal Reserve (Fed) and the Bank of Japan (BoJ) continues to drive the USD/JPY pair higher. Traders hold the belief that the BoJ will maintain its negative interest rate policy at least until the next year.
BoJ Governor Kazuo Ueda recently emphasized the absence of immediate plans to adjust the ultra-loose policy framework or amend the yield curve control measures.
The upcoming release of the ISM Manufacturing PMI during the early North American session on Monday will be the first significant US macroeconomic report of the month. Market participants will also closely monitor the release of the FOMC meeting minutes on Wednesday and the highly anticipated US monthly employment figures, known as the NFP report, on Friday.
As a result, traders may exercise caution in making aggressive directional bets on the USD/JPY pair in the interim.
USD/JPY Price Chart – Source: Tradingview
USD/JPY - Technical analysis
The USD/JPY pair experienced a temporary downturn, testing the support line of the intraday bullish channel. However, today's market open shows a bullish inclination, driven by positive signals on the four-hour timeframe. This suggests a potential continuation of the main bullish trend.
As a result, the next target for the pair is set at 146.10. It's worth noting that if the price breaks below 144.25, a short-term bearish correction could occur before resuming its upward movement.
For today's trading, the expected range is between support at 144.00 and resistance at 145.50.
USD/JPY Price Analysis – May 17, 2023
Daily Price Outlook
In the early European session on Wednesday, the USD/JPY pair continued its upward trajectory for the fifth consecutive day, reaching a nearly two-week high.
However, market participants are cautious about placing new bets until spot prices surpass a key technical support level at the 200-day simple moving average (SMA), currently hovering around the significant round figure of 137.00.
The US Dollar (USD) has strengthened to almost a two-month high following recent hawkish comments from various Federal Reserve (Fed) officials. This has been a significant catalyst supporting the USD/JPY pair.
Cleveland Fed President Loretta Mester's statement on Tuesday that interest rates are not yet restrictive and the central bank is not ready to hold rates has reinforced the belief that the US central bank will maintain higher interest rates for an extended period, lending support to the greenback.
Conversely, the Japanese Yen (JPY) has been weighed down by the Bank of Japan's (BoJ) more dovish stance. Last week, BoJ Governor Kazuo Ueda mentioned that it was premature to discuss specific plans for scaling back the massive stimulus program.
This, coupled with a slight increase in US equity futures, has undermined the safe-haven status of the JPY and has sustained the positive trend of the USD/JPY pair. However, a slight decline in US Treasury bond yields might curb the bullish sentiment and deter traders from taking aggressive positions.
Nevertheless, given the prevailing market conditions, the path of least resistance for the USD/JPY pair is upward. Traders are now closely monitoring the US housing industry data, particularly building permits and housing starts, to gauge potential market momentum.
USD/JPY – Technical Outlook
On Wednesday, the USD/JPY currency pair was trading around the 109.750 level. From a technical perspective, there is evidence of a double top pattern forming in the two-hour timeframe, posing a significant obstacle around the 109.700 level. If buyers can successfully push the price above this level, there is a strong possibility of a bullish continuation.
Furthermore, there is an ascending trendline providing crucial support to USD/JPY. This suggests that the bullish sentiment is likely to dominate the market. Additionally, the 50-day exponential moving average and other leading indicators, such as RSI and MACD, are holding steady, supporting the bullish outlook.
Given the current situation, today's strategy is to look for buying opportunities around the 109.700 level with a target resistance of 110.750. However, if the USD/JPY pair breaks below the support level 109.300, it could decline toward the next key support at 108.700.
Keeping a close eye on the 109.700 level is crucial, as a break above it may attract buyers in the USD/JPY currency pair.
USD/JPY Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
* USD/JPY is trading around the 109.750 level, with a significant double top pattern forming near 109.700 on the two-hour timeframe.
* An ascending trendline is providing crucial support, indicating a potential bullish dominance in the market. The 50-day exponential moving average, RSI, and MACD are also supportive of a bullish outlook.
* Traders should consider buying opportunities near the 109.700 level, targeting resistance at 110.750. However, a break below the 109.300 support level could lead to a decline towards 108.700.
On Wednesday, the USD/JPY currency pair was seen trading around the 109.750 level. From a technical perspective, there is evidence of a double top pattern forming on the two-hour timeframe, posing a significant obstacle around the 109.700 level. If buyers can successfully push the price above this level, there is a strong possibility of a bullish continuation.
Furthermore, there is an ascending trendline providing crucial support to USD/JPY. This suggests that the bullish sentiment is likely to dominate the market. Additionally, the 50-day exponential moving average and other leading indicators such as RSI and MACD are holding steady, supporting the bullish outlook.
Given the current situation, today's strategy is to look for buying opportunities around the 109.700 level with a target resistance at 110.750. However, if the USD/JPY pair breaks below the support level of 109.300, it could potentially decline towards the next key support at 108.700.
It is crucial to keep a close eye on the 109.700 level as a break above it may attract buyers in the USD/JPY currency pair.
USD/JPY - Trade Idea
Entry Price – Buy Above 136.700
Stop Loss – 135.992
Take Profit – 137.731
Risk to Reward – 1 : 1.45
Profit & Loss Per Standard Lot = +$1030/ -$700
Profit & Loss Per Micro Lot = +$103/ -$70
USD/JPY Price Analysis – May 12, 2023
Daily Price Outlook
After a three-day streak of gains, the USD/JPY currency pair has dropped below 135.00, moving away from the 20-day and 100-day exponential moving averages (EMAs) located at 134.53 and 134.24, respectively. This decline can be attributed to the decrease in US inflation. The relationship between USD/JPY and the fall in the US 10-year Treasury bond yield is also taken into consideration. As of the time of this report, USD/JPY is trading at 134.22, down 0.73%.
The dovish sentiments expressed in the Bank of Japan's (BoJ) monthly statement do not fully explain the bearish trend in USD/JPY, as the currency pair continues to hover near its weekly lows around 133.90. The decline in USD/JPY is influenced by the overall weakness of the US dollar, which is accompanied by cautious optimism and lower returns on Treasury bonds.
The US Dollar Index (DXY) has fallen for the second consecutive day and is currently trading around 101.35. This decline comes as US inflation dropped below 5.0% for the first time in two years. However, the US inflation data was not as concerning as expected and it seems to have supported the Federal Reserve (Fed) in postponing any rate-cut actions until September 2023, according to Fed Fund Futures.
In April, the US Consumer Price Index (CPI) registered a year-on-year decrease to 4.9%, in line with market estimates of 5.0% inflation. This marks the first reading below 5.0% in two years. On a month-on-month basis, the CPI data met the positive projection of 0.4% and reached 0.1%.
The US 10-year and two-year Treasury bond rates experienced a four-day decline, resulting in the largest daily drop in a week, as concerns about economic slowdown increased demand for US bonds. However, the benchmark US bond rates remain under pressure, fluctuating between 3.42% and 3.91% at the time of this report.
In other news, US policymakers were unable to reach an agreement on the debt ceiling during their initial attempt on Wednesday. Nevertheless, discussions have commenced, and another attempt will be made on Friday, which has boosted market optimism. Furthermore, the absence of significant negative factors in the banking sector, along with strong earnings and generally weaker US data, has alleviated concerns within the banking industry.
USD/JPY – Technical Outlook
The USDJPY tried to drop below the bullish channel's support line, but ultimately ended the day above the line. This may bode well for the day's trading, and may even portend a continuation of the anticipated upward trend. Our bias remains optimistic, with 135.35 and 137.70 as our next primary targets.
If the price drops below the support level at 134.25, it may test the crucial support level at 133.30 before making another attempt to rise.
Today's trade might go either way between the 133.90 support level and the 135.50 resistance level.
Related:
* BTC/USD Price Analysis – May 12, 2023
USD/JPY Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
* USD/JPY experienced a sharp bearish trend during the Asian session, dropping to 134.50, with the formation of three black crows on the four-hour timeframe.
* The pair completed a 61.8% Fibonacci retracement around 134.83, suggesting further downside potential if the candle closes below this level.
* The USD/JPY could target the 78.6% Fibonacci retracement level at 134.065; if candles close above, it may trigger an upward movement, with immediate resistance at 134.83 and potential targets of 135.45 or 136.
During the Asian session, the USD/JPY traded with a sharp bearish trend, having dropped to 134.50. At present, when examining the four-hour timeframe, the USD/JPY has formed solid bearish candles, which are essentially three black crows, suggesting a dominant bearish sentiment in the market today.
On the four-hour chart, we can observe that the USD/JPY pair has completed a 61.8% Fibonacci retracement around the 134.83 level. The closing of the candle below this particular level indicates that there is more downside potential today.
With that in mind, the USD/JPY has the potential to target the 78.6% Fibonacci retracement level, which is marked around 134.065. The closing of candles above this specific level could potentially trigger a new upward movement in the currency rate today.
On the upside, an immediate resistance is observed around the 134.83 level, and a bullish break above this level may lead the Japanese yen towards 135.45 or 136.
USD/JPY - Trade Idea
Entry Price – Buy Limit 134
Stop Loss – 133
Take Profit – 136
Risk to Reward – 1 : 2
Profit & Loss Per Standard Lot = +$1,487/ -$743
Profit & Loss Per Micro Lot = +$148/ -$74
USD/JPY Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
* USDJPY exhibiting strong bullish bias, crossing above the 150-day moving average at 134.250
* Technical indicators, such as RSI and MACD, support an upward trend continuation; potential target at 135.100 and possibly 136.050
* Suggested strategy: buying position above 134.250 with targets at 135 or 136.050
On Friday, the USDJPY currency pair is exhibiting a strong bullish bias, surging to the 134.800 level. On the four-hourly timeframe, the USDJPY currency pair crossed above the 150-day moving average, which was providing major resistance around the 134.250 level.
Moreover, the USDJPY currency pair has formed a bullish engulfing pattern, suggesting a strong bullish sentiment among investors. At the same time, there is an upward trendline that also supports a buying trend in the pair today.
Leading technical indicators, such as RSI and MACD, are situated in the buying zone, further supporting the likelihood of an upward trend continuation.
With this in mind, the USDJPY has the potential to target the 135.100 level, and the increased demand for this particular currency pair may allow it to break through the 135.100 level and reach the 136.050 resistance level.
On the downside, support continues to hold around 134. The suggested strategy is to look for a buying position today above the 134.250 level, with a target of 135 or 136.050.
USD/JPY – Trade Ideas
Entry Price – Buy Above 134.183
Stop Loss – 133.037
Take Profit – 136.029
Risk to Reward – 1 : 2.5
Profit & Loss Per Standard Lot = +$184/ -$114
Profit & Loss Per Micro Lot = +$18/ -$11
USD/JPY Price Analysis – March 31, 2023
Daily Price Outlook
The USD/JPY is trading at 133.16, up by 0.36% in 24 hours. The release of Japan's economic figures related to the labor market, retail demand, and Tokyo CPI has resulted in a substantial upward movement for the currency pair.
Moreover, as concerns about additional bank collapse fade, the Japanese Yen, one of the global safe-haven assets, is moving downward versus the US dollar.
US GDP Plunges, Pushing USD/JPY Lower
The final estimate of the US GDP for the fourth quarter of 2022 decreased marginally from 2.7% to 2.6%, down from the Q3 print of 3.2%. Also, according to US data issued on Thursday, the unemployment claims from the previous week rose to 198K, more than expected, pointing to a softening labor market. The data supports the argument for a softer Fed attitude.
Meanwhile, as markets continued to minimize the chance of additional rate rises, the US Dollar Basket (DXY), a gauge of USD performance, fell to 102.17 after the GDP report release.
On Friday, the core PCE price index, which the Fed prefers to use as a gauge of inflation, will be issued. The index will provide more details on the state of the leading economy in the world. Furthermore, it may offer more support for the USD/JPY pair.
Tokyo Inflation Slowdown, Weakening JPY
Inflation in Tokyo continued to drop in March after a strong decline in February, caused by government subsidies for electricity costs.
According to statistics from the Statistical Bureau, Tokyo's Core CPI has increased by 3.2% in the 12 months ending in March, above forecasts for growth of 3.1% but falling short of the previous month's figure of 3.3%. Tokyo's CPI rose 3.3% overall in March, slightly down from the 3.4% increase recorded in February.
Steady inflation indicates that the Bank of Japan's (BoJ) aim to keep inflation consistently at desired targets remains unaffected. It might ensure the likelihood of ending the ultra-loose monetary policy.
Nonetheless, retail demand in Japan remained strong in February. Yearly Retail Sales data has increased significantly from an estimated 5.8% to 6.6%. The BoJ's policymakers and the Japanese government are concerned that factors outside of domestic demand are primarily responsible for inflationary pressures in Japan. However, retail demand right now might ease some concerns.
Moreover, the dismal labor market statistics are the driving force behind the Japanese Yen's recent decline. Compared to the consensus and the previous announcement of 2.4%, the unemployment rate has jumped to 2.6%.
Safe haven USD/JPY rises as Japan's rising unemployment rate demands the continuation of the BoJ's loose policy.
USD/JPY Intraday Technical Levels
Support Resistance
132.52 133.57
131.84 133.94
131.46 134.62
Pivot Point: 132.89
USD/JPY – Technical Outlook
The USD/JPY pair has been exhibiting tight sideways fluctuations since yesterday, hovering around the 133.30 level and maintaining its position below it for now. This sustains the likelihood of resuming the primary bearish trend, with initial targets at 131.60 followed by 130.40.
The price requires a negative impetus to help it achieve the anticipated decline. Notably, breaking below 132.00 would facilitate reaching the desired targets, while surpassing 133.30 would introduce a positive factor, pushing the price towards an intraday and short-term increase.
Today's expected trading range is between 131.90 support and 133.50 resistance.
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USD/JPY Price Analysis – March 10, 2023
Daily Price Outlook
The USD/JPY currency pair is trading at 136.50, up 0.26% in the last 24 hours. The Bank of Japan's dovish stance and concerns over rising US interest rates have declined the Japanese yen.
US Initial Jobless Claims Increase, Driving Down Dollar Value
The US Initial Jobless Claims for the week ended on March 4th showed a significant increase to 211K, the highest since January, compared to the expected 195K and the previous 190K. The markets remain apprehensive due to mixed US data and growing concerns about inflation.
The higher-than-expected unemployment claims have caused a decrease in the dollar's value, with the DXY trading lower at 105.20.
Currently, investors are waiting for positive changes in the nonfarm job market, average hourly wage, and unemployment rate, as these factors are expected to boost the value of the US dollar.
The Bank of Japan's Dovish Stance
Last week, Kazuo Ueda, the upcoming Bank of Japan (BoJ) Governor, declared that he would continue with the accommodative monetary policies implemented by his predecessor, Haruhiko Kuroda. Ueda stated that the Japanese economy has not yet fully recovered and requires sustained support.
Recently released data shows that the Japanese economy avoided a recession in the fourth quarter of 2022. The report indicates that the GDP remained unchanged in Q4 2022, falling short of economists' predictions of 0.2% growth.
According to reports, Kazuo Ueda, the next Governor of the Bank of Japan (BoJ), is expected to maintain the bank's ultra-dovish position in the short term during today's policy meeting. However, experts predict a shift in the bank's stance later this year.
The BoJ decided to keep interest rates at record lows on Friday, stating that it would maintain its current pace of yield curve control (YCC) as it deals with a severe slowdown in the Japanese economy and pursues a leadership change. The central bank retained its short-term and long-term policy interest rates at -0.1% and 0%, respectively.
The bank also stated that it would keep the volatility in 10-year bond rates at 0.5% to negative 0.5% and maintain the pace of quantitative easing at its present level, with no surprises before a change in its top executives.
As a result of the Bank of Japan's dovish outlook, the Japanese yen dropped sharply, losing ground against the US dollar and boosting the momentum of the USD/JPY currency pair.
USD/JPY Intraday Technical Levels
Support Resistance
135.60 137.03
135.06 137.92
134.17 138.46
Pivot Points:136.49
USD/JPY – Technical Outlook
The USD/JPY pair tested the bullish channel's support line yesterday, causing downward pressure. However, today the pair is trading above the line, indicating a higher possibility for a bullish trend to resume shortly, with the initial objective being the 137.70 level.
Although stochastic signals are currently positive, the price is supported by the EMA50 from below, further increasing the likelihood of a projected bullish trend.
If the price breaks below 136.30, it could result in downward pressure and end the predicted advance. The trading range for today is expected to be between 135.90 - 137.50.