AUDJPY Target 90
The Yen has been pretty much toast for quite some time. That was until the 11th of July 2024.
Technicals
1. Candlestick - Evening Star for the start of this corrective move away form 109.50.
2. 200 MAV - price crossed on the 17th July.
3. MAV Alignment - 20/50/200 lined up to the downside.
4. Momentum - from OB zone, a Bearish Divergence as a prelude to the corrective move. RSI staying in the sell zone & pretty much occupying the OS zone.
5. Volume - nearly all high volume bars align with the sellers, showing clearly they are in control.
6. Order Flow - price is trending down progressively and steadily , suggesting it will continue.
There is no blow off shown as yet. We are in the 3rd leg down.
Target - the unmitigated Demand Zone from June 2023.
Fundamentals
Value of AI -
The strengthening of the Japanese Yen since early July 2024 can be attributed to several key factors:
Bank of Japan’s Monetary Policy: The Bank of Japan (BoJ) raised interest rates to their highest level since 2008 and announced an aggressive quantitative tightening plan. This included reducing government bond purchases, which signaled a shift towards a tighter monetary policy12.
Speculation and Market Reactions: There was increased speculation about further interest rate hikes by the BoJ, which led to the unwinding of carry trades. These trades typically involve borrowing in a low-interest-rate currency (like the Yen) to invest in higher-yielding assets elsewhere. As expectations of higher rates grew, investors started unwinding these positions, leading to increased demand for the Yen13.
Global Economic Conditions: The Federal Reserve’s signaling of potential interest rate cuts in the US also played a role. This narrowed the interest rate differential between the US and Japan, making the Yen more attractive to investors13.
Risk Aversion: During times of global economic uncertainty, the Yen is often seen as a safe-haven currency. Recent global market volatility and concerns about economic stability have driven investors towards the Yen
So , from both perspectives a target of 90 is very compelling.
Technicals
1. Candlestick - Evening Star for the start of this corrective move away form 109.50.
2. 200 MAV - price crossed on the 17th July.
3. MAV Alignment - 20/50/200 lined up to the downside.
4. Momentum - from OB zone, a Bearish Divergence as a prelude to the corrective move. RSI staying in the sell zone & pretty much occupying the OS zone.
5. Volume - nearly all high volume bars align with the sellers, showing clearly they are in control.
6. Order Flow - price is trending down progressively and steadily , suggesting it will continue.
There is no blow off shown as yet. We are in the 3rd leg down.
Target - the unmitigated Demand Zone from June 2023.
Fundamentals
Value of AI -
The strengthening of the Japanese Yen since early July 2024 can be attributed to several key factors:
Bank of Japan’s Monetary Policy: The Bank of Japan (BoJ) raised interest rates to their highest level since 2008 and announced an aggressive quantitative tightening plan. This included reducing government bond purchases, which signaled a shift towards a tighter monetary policy12.
Speculation and Market Reactions: There was increased speculation about further interest rate hikes by the BoJ, which led to the unwinding of carry trades. These trades typically involve borrowing in a low-interest-rate currency (like the Yen) to invest in higher-yielding assets elsewhere. As expectations of higher rates grew, investors started unwinding these positions, leading to increased demand for the Yen13.
Global Economic Conditions: The Federal Reserve’s signaling of potential interest rate cuts in the US also played a role. This narrowed the interest rate differential between the US and Japan, making the Yen more attractive to investors13.
Risk Aversion: During times of global economic uncertainty, the Yen is often seen as a safe-haven currency. Recent global market volatility and concerns about economic stability have driven investors towards the Yen
So , from both perspectives a target of 90 is very compelling.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.