USDJPY Bearish Projection 2/5
Updated
After mixed data surrounding NFP, I expect that USD could be momentarily bullish at market open this week. However, from a technical perspective we can see that USDJPY has formed two potential bearish triangles, one on the Daily and another on the 4hr last week.
Fundamentally, a rate hike is now off the table for at least a month's time and despite positive NFP numbers, wage increases listed Friday fell under expectations and unemployment is up for the first time in months, although it's only .1 percent and the number is still a healthy figure. Lastly, China and Russia just signed a trade deal to move away from usage of the dollar in their bilateral trade. This will lower demand for the dollar by roughly $100 billion annually. Thus, over the next couple of weeks I expect the USD to take a hit. In these uncertain times, JPY is a very reliable reserve currency, with a potential rate hike on the table for Japan this year as well and an economy that is healthy and a political climate much more stable than that in the West. Thus, my prediction for most of the month of February is a bearish USDJPY.
Key levels will be 112, 111.200, 110.750, and 110.
Fundamentally, a rate hike is now off the table for at least a month's time and despite positive NFP numbers, wage increases listed Friday fell under expectations and unemployment is up for the first time in months, although it's only .1 percent and the number is still a healthy figure. Lastly, China and Russia just signed a trade deal to move away from usage of the dollar in their bilateral trade. This will lower demand for the dollar by roughly $100 billion annually. Thus, over the next couple of weeks I expect the USD to take a hit. In these uncertain times, JPY is a very reliable reserve currency, with a potential rate hike on the table for Japan this year as well and an economy that is healthy and a political climate much more stable than that in the West. Thus, my prediction for most of the month of February is a bearish USDJPY.
Key levels will be 112, 111.200, 110.750, and 110.
Note
As expected, USDJPY tested the triangle one last time at 112.750, ranged at the bottom of the triangle for a moment, and then broke downwards. Take profit whenever you feel comfortable. Target is still 111.300. I would take profit and look for a last kiss to resistance at 112 for reentry.
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