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USD/JPY Fundamental + Technical Macroeconomic Update | 3.14.23The Japanese yen strengthened to 133 per dollar, reaching its highest levels in almost a month. This was due to the US regulators stepping in to protect depositors and financial institutions following the collapse of Silicon Valley Bank, causing speculation that the US Federal Reserve may take a less aggressive approach to policy tightening to avoid further risks to the financial system. Meanwhile, the Bank of Japan, under Governor Haruhiko Kuroda’s final policy meeting before retirement, maintained its ultra-low interest rates at its March meeting. Japanese policymakers made no indication of ending the bank’s yield curve control, preferring to hold off on big policy changes until Kuroda’s successor, Kazuo Ueda, steps in as head in April. The dollar index traded around 103.5 on Wednesday, nearing its weakest levels in a month. The recent turmoil in the US banking sector and the latest US inflation report caused investors to reassess the outlook for Federal Reserve monetary policy. Fresh data showed that the annual inflation rate in the US slowed further to 6% in February, in line with expectations. This led to money markets pricing an 80% chance of a 25 basis point rate hike from the Fed next week, lower than the half-percentage point increase expected a week ago. In the stock market, the Nikkei 225 Index rose 0.2% to above 27,250 while the broader Topix Index gained 0.7% to 1,960 on Wednesday, with banking stocks leading the rebound. The collapse of Silicon Valley Bank and Signature Bank had caused concern, but investors were hopeful that the worst of the fallout had passed. Financial stocks led the advance, with gains from Mitsubishi UFJ (4.3%), Sumitomo Mitsui (2.6%) and Mizuho Financial (2.4%). Minutes from the Bank of Japan’s January meeting showed that members reiterated the need to maintain ultra-easy policies, stating that it will take time to achieve the 2% inflation target in a sustainable and stable manner. Overall, there was optimism in the market, with investors betting on a smaller interest rate hike by the Federal Reserve next week.
by TayFx
USD/JPY pulls back into resistance for potential swing trade The US dollar has continued to face selling pressure following the collapse of Silicon Valley Bank, as traders bet that the Fed may pause their tightening cycle at next month's meeting. Whilst Fed fund futures imply a 60.5% chance of a 25bp hike (or 39.5% odds of a pause), this is quite a sudden chance considering the curve suggested ~80% chance of a 50bp hike last week. US inflation data is released in ~14 hours and is likely to be a closely watched report, as a soft print could increase odds of a pause, weigh on the dollar and send USD/JPY lower. Yet a hot inflation print likely cements a 25bp hike and sees the dollar coup some of its losses. Purely on a technical front, USD/JPY looks appealing for a bearish sewing trade. It has an established downtrend on the 1-hour chart, and prices have retraced higher into a resistance zone including the monthly pivot point and weekly S1 pivot. A rising wedge / bear flag is also forming, which generally breaks out in the direction of the underlying trend. A weak inflation report could likely help. The bias is bearish beneath the recent cycle highs and for a move down to 132.
Short
by CityIndex
USDJPY Outlook 10th March 2023The Bank of Japan (BoJ) released an unchanged monetary policy statement, with no surprises from Governor Kuroda at his last policy meeting. As the monetary policy statement was unchanged, this disappointed the market slightly, resulting in the significant weakening of the Japanese Yen. The USDJPY spiked up from the 136 price area, breaking above the 23.60% Fibonacci retracement level at 136.40 to reach the 137 round number resistance and 61.8% Fibonacci retracement level following the release of the news. Although the price retraced lower, the USDJPY could continue trading higher toward the 137 resistance level and beyond that, the next key resistance level is at 138.
Long
by JinDao_Tai
USDJPYHi USDJPY has been examined in different dimensions: 1- Strong supply and demand levels that I identify with my own indicator and system. 2- The structure of recently formed waves 3- Current market momentum 4- The structure of classical and price patterns In this idea, I identified the direction of the market in different ways and in the second step, I analyzed the potential of continuation or reversal. Usually, paying attention to the trend and strength of the trend can greatly increase the accuracy of the analysis. In general, I tried to describe the continuation of the movement in the simplest possible way in the diagram. ⚠️ Disclaimer:
Short
by HamidRamezani1992
1
USDJPY Outlook 9th March 2023Although the USDJPY traded significantly higher following the bullish news from the US Federal Reserve, with the price reaching the 138-round number resistance level, it has since retraced significantly to the downside and is trading below the 137-round number level. With the short term bearish trendline indicating downward pressure, look for the USDJPY to continue trading lower to retest the 136.40 (and 61.8% Fibonacci retracement level), similar to the price action overnight. However, watchout for significant price volatility tomorrow with the Bank of Japan (BoJ) due to release its monetary policy decision (and it is also Governor Kuroda's last meeting). While it is unlikely that any changes will be made to the monetary policy, the market is anticipating the potential of a surprise since it is Kuroda's last meeting. If he adjusts/removes limits on the JGB yield, the Yen could strengthen significantly, with the next key support level for the USDJPY at 135.26.
Short
by JinDao_Tai
Get ready to be long Gold and short JPYThe chart of Gold expressed in Japanese Yen has remained in a very tight weekly closing price range of 7% for almost a year. The boundaries are clear as an ascending triangle. This is a trade I will lean into hard by buying Gold and either selling Yen futures or buying USDJPY spot in approximately equal USD values. JCB will continue to inject money into the system. The Yen is likely to becoming the garbage can currency of the world. By buying Gold and selling Yen I become USD neutral in the trade.
OANDA:XAUJPYLong
by PeterLBrandt
6
USDJPY Outlook 7th March 2023Yesterday, the USDJPY traded down to retest the support level of 135.35, but failed to break lower. This move to test and reject the support level was similar to the price action on the 1st of March. As the USDJPY consolidates along the 136 price level and 38.20% Fibonacci Retracement level, look for breakout potential on the USDJPY. A recovery in strength on the DXY could see the USDJPY climb higher toward the 137 round number resistance level, with the 61.8% Fibonacci Retracement level possibly forming a strong intermediate resistance level. Alternatively, if the DXY continues with the current downtrend and weakens further, look for the USDJPY to trade below the 135.80 price level to signal a possible retest of the 135.35 support level again.
Short
by JinDao_Tai
GBPJPY Potential Forecast | 6th March 2023Fundamental Backdrop 1. GBP inflation continues to remain elevated at 10.1% for the month of January. 2. BOE continues to take a hawkish stance and most recently raised rates by 50bps to 4.0% in its February meeting. 3. Inflation would need to make a marked fall for the BOE to revise its hawkish stance in the market. 4. BOJ continues to maintain its key short-term i/r at -0.1%, signifying the dovish stance in the market. 5. This wide interest rate differential continues to play a pivotal role in the appreciation of pound over the yen. Technical Confluences 1. Price is currently flirting the H4 support level at 162.8. 2. Price has also retraced past the 50% in the fibonacci retracement. 3. Price is also resting on the Ichimoku cloud on the H4 timeframe and this serves as a dynamic support zone for price to continue higher as well. Idea Looking for long positions on the GBPJPY for price to head up to tap into the HTF resistance at 166.04. NOT FINANCIAL ADVICE DISCLAIMER The trading related ideas posted by OlympusLabs are for educational and informational purposes only and should not be considered as financial advice. Trading in financial markets involves a high degree of risk, and individuals should carefully consider their investment objectives, financial situation, and risk tolerance before making any trading decisions based on our ideas. We are not a licensed financial advisor or professional, and the information we are providing is based on our personal experience and research. We make no guarantees or promises regarding the accuracy, completeness, or reliability of the information provided, and users should do their own research and analysis before making any trades. Users should be aware that trading involves significant risk, and there is no guarantee of profit. Any trading strategy may result in losses, and individuals should be prepared to accept those risks. OlympusLabs and its affiliates are not responsible for any losses or damages that may result from the use of our trading related ideas or the information provided on our platform. Users should seek the advice of a licensed financial advisor or professional if they have any doubts or concerns about their investment strategies.
Long
by OlympusLab
USDJPY Outlook 6th March 2023The USDJPY reversed strongly from the 137 round number resistance level, trading lower through the session on Friday, ending the week at the 135.80 price area. This move lower, as we know was due to the weakness in the DXY, hence, if the weakness continues, the USDJPY could continue trading lower, down to retest the 135.35 key support level. The USDJPY could see significant volatility this week, given that the JGB 10yr yield had recently breached the 0.5% ceiling and the BoJ monetary policy statement is due to be released (and it is Kuroda's last meeting as Governor). If the price breaks below the immediate support level, the USDJPY could see significant downside potential, with the next key support level at the round number level of 134.
Short
by JinDao_Tai
2
USDJPY Outlook 3rd March 2023Overnight, the USDJPY climbed steadily to the upside, reaching the recent high and round number resistance level of 137. However, the price failed to break the resistance level, retracing lower down to the current level of 136.61. While further upside could be expected especially if the DXY continues to strengthen, watch out for significant volatility on the Japanese Yen with the recent news that the Japanese bond yields have again risen above the 0.5% ceiling previously set by the BoJ. On 20th December 2022, when the BoJ increased flexibility by increasing the bond yield ceiling, the USDJPY spiked from the 137.17 level down to 133.50 within the hour. In the meantime, look for the USDJPY to consolidate along the current price level (supported by the 23.6% Fibonacci retracement level) before trading higher again with the 138 key resistance level a target level.
Long
by JinDao_Tai
4
Cheeky long for USD/JPYUSD/JPY is grinding higher on the daily chart, although it seems wary of the 200-day MA overhead. But at the same time, it looks as though it at least wants to test it (and is sat near the daily R1 pivot). Prices have pulled back on the 1-hour chart in a corrective fashion, and the corrective lows found support at the 50-hour EMA and a previous swing high. Prices are also trying to hold above the daily pivot points. - The bias is for an upside break due to the underlying trend, and that is something a strong ISM services report later today could help with. - The initial target is 137, ahead of the daily R1 / 200-day MA, - The bias remains bullish above 137.40
Long
by CityIndex
1