USD/JPY hits fresh multi-year high, holds above 119.00
USD/JPY hits fresh multi-year high, holds above 119.00 amid resurgent USD demand
FUNDAMENTAL:
1
USD/JPY caught fresh bids on Friday after the BoJ stuck to its accommodative policy stance.
A goodish pickup in the USD demand provided an additional boost and remained supportive.
A softer risk tone could benefit the safe-haven JPY and cap gains amid overbought conditions.
The USD/JPY pair extended its steady intraday ascent through the mid-European session and climbed to a fresh multi-year peak, around the 119.10-119.15 region in the last hour.
A combination of supporting factors assisted the USD/JPY pair to regain positive traction on the last day of the week and prolong its recent bullish trajectory witnessed over the past two weeks or so. The Bank of Japan stuck to its dovish stance and left its ultra-easy policy setting unchanged at the end of the March meeting. This, in turn, weighed on the Japanese yen and pushed the pair higher amid a goodish pickup in the US dollar demand.
The greenback made a solid comeback on Friday and reversed the previous day's slide to the one-week low, bolstered by the start of the policy tightening cycle by the Fed. It is worth recalling that the US central bank hike its target fund rate by 25 bps on Wednesday and indicated that it could raise interest rates at all the six remaining meetings in 2022. This, along with elevated US Treasury bond yields, underpinned the greenback.
The latest leg up now seems to have confirmed a near-term bullish breakout and might have already set the stage for a further near-term appreciating move for the USD/JPY pair. The divergence in the BoJ-Fed monetary policy outlook adds credence to the constructive outlook. That said, extremely overbought conditions on the daily chart could hold back traders from placing aggressive bullish bets, at least for the time being.
Moreover, a weaker risk tone, which tends to benefit the safe-haven Japanese yen, might further contribute to capping the USD/JPY pair. The lack of progress in the Russia-Ukraine peace negotiations tempered investors' appetite for riskier assets and led to a fresh leg down in the equity markets. Traders might also prefer to wait on the sidelines ahead of a meeting between US President Joe Biden and his Chinese counterpart Xi Jinping.
Nevertheless, the bias seems tilted firmly in favour of bullish traders, though the technical set-up makes it prudent to wait for some near-term consolidation or a modest pullback before the next leg up. Nevertheless, the USD/JPY pair seems all set to settle near the highest level since February 2016 and record strong gains for the second successive week.
2
Holding 118.595 Puts USD/JPY in Position to Resume Uptrend
The Dollar/Yen is edging higher on Friday after consolidating for nearly two sessions despite the Federal Open Market Committee (FOMC) on Wednesday signaling the equivalent of a quarter-point increase at each of its six remaining policy meetings this year, leaving investors racing to work out how much monetary tightening the economy can handle.
The USD/JPY picked up some support overnight after Bank of Japan (BOJ) policymakers voted to maintain ultra-accommodative monetary settings. This move widened the policy gap with the Fed, which helped make the U.S. Dollar a more attractive asset.
The main trend is up according to the daily swing chart. A trade through 119.118 will signal a resumption of the uptrend. A move through 114.651 will change the main trend to down.
A change in trend to down at this time is highly unlikely, but the Forex pair is currently inside the window of time for a closing price reversal top. If confirmed, this could trigger the start of a minimum 2-3 day correction.
The USD/JPY is currently straddling a pair of former tops at 118.601 and 118.658. They could become new support following the “old top, new bottom” rule. The nearest support level is a minor pivot at 116.765.
Short-Term Outlook
The direction of the USD/JPY on Friday is likely to be determined by trader reaction to 118.595.
Bullish Scenario
A sustained move over 118.595 will indicate the presence of buyers. Taking out 119.118 will indicate the buying is getting stronger.
The daily chart indicates there is plenty of room to the upside with no resistance coming in until the January 29, 2016 main top at 121.678.
Bearish Scenario
A sustained move under 118.595 will signal the presence of sellers. A failure to hold 118.176 will break the chart pattern. This could trigger the start of a pullback with the pivot at 116.765 the next potential downside target.
Side Notes
Taking out 119.118 then closing below 118.595 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a minimum 2 to 3 day correction with 116.765 the first downside target.
If Breaking 121 upward UDJPY can reach 125 and then 130-135!
Strategy on low time frame:
Go with the TREND!POSITION SIZE ONLYIF THE PRIOR POSITION STOP IS IN PROFIT(TRAILING TOPTURNS TO TAKE PROFIT LEVEL)
BUYING PULL BACK RED BARS
FUNDAMENTAL:
1
USD/JPY caught fresh bids on Friday after the BoJ stuck to its accommodative policy stance.
A goodish pickup in the USD demand provided an additional boost and remained supportive.
A softer risk tone could benefit the safe-haven JPY and cap gains amid overbought conditions.
The USD/JPY pair extended its steady intraday ascent through the mid-European session and climbed to a fresh multi-year peak, around the 119.10-119.15 region in the last hour.
A combination of supporting factors assisted the USD/JPY pair to regain positive traction on the last day of the week and prolong its recent bullish trajectory witnessed over the past two weeks or so. The Bank of Japan stuck to its dovish stance and left its ultra-easy policy setting unchanged at the end of the March meeting. This, in turn, weighed on the Japanese yen and pushed the pair higher amid a goodish pickup in the US dollar demand.
The greenback made a solid comeback on Friday and reversed the previous day's slide to the one-week low, bolstered by the start of the policy tightening cycle by the Fed. It is worth recalling that the US central bank hike its target fund rate by 25 bps on Wednesday and indicated that it could raise interest rates at all the six remaining meetings in 2022. This, along with elevated US Treasury bond yields, underpinned the greenback.
The latest leg up now seems to have confirmed a near-term bullish breakout and might have already set the stage for a further near-term appreciating move for the USD/JPY pair. The divergence in the BoJ-Fed monetary policy outlook adds credence to the constructive outlook. That said, extremely overbought conditions on the daily chart could hold back traders from placing aggressive bullish bets, at least for the time being.
Moreover, a weaker risk tone, which tends to benefit the safe-haven Japanese yen, might further contribute to capping the USD/JPY pair. The lack of progress in the Russia-Ukraine peace negotiations tempered investors' appetite for riskier assets and led to a fresh leg down in the equity markets. Traders might also prefer to wait on the sidelines ahead of a meeting between US President Joe Biden and his Chinese counterpart Xi Jinping.
Nevertheless, the bias seems tilted firmly in favour of bullish traders, though the technical set-up makes it prudent to wait for some near-term consolidation or a modest pullback before the next leg up. Nevertheless, the USD/JPY pair seems all set to settle near the highest level since February 2016 and record strong gains for the second successive week.
2
Holding 118.595 Puts USD/JPY in Position to Resume Uptrend
The Dollar/Yen is edging higher on Friday after consolidating for nearly two sessions despite the Federal Open Market Committee (FOMC) on Wednesday signaling the equivalent of a quarter-point increase at each of its six remaining policy meetings this year, leaving investors racing to work out how much monetary tightening the economy can handle.
The USD/JPY picked up some support overnight after Bank of Japan (BOJ) policymakers voted to maintain ultra-accommodative monetary settings. This move widened the policy gap with the Fed, which helped make the U.S. Dollar a more attractive asset.
The main trend is up according to the daily swing chart. A trade through 119.118 will signal a resumption of the uptrend. A move through 114.651 will change the main trend to down.
A change in trend to down at this time is highly unlikely, but the Forex pair is currently inside the window of time for a closing price reversal top. If confirmed, this could trigger the start of a minimum 2-3 day correction.
The USD/JPY is currently straddling a pair of former tops at 118.601 and 118.658. They could become new support following the “old top, new bottom” rule. The nearest support level is a minor pivot at 116.765.
Short-Term Outlook
The direction of the USD/JPY on Friday is likely to be determined by trader reaction to 118.595.
Bullish Scenario
A sustained move over 118.595 will indicate the presence of buyers. Taking out 119.118 will indicate the buying is getting stronger.
The daily chart indicates there is plenty of room to the upside with no resistance coming in until the January 29, 2016 main top at 121.678.
Bearish Scenario
A sustained move under 118.595 will signal the presence of sellers. A failure to hold 118.176 will break the chart pattern. This could trigger the start of a pullback with the pivot at 116.765 the next potential downside target.
Side Notes
Taking out 119.118 then closing below 118.595 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a minimum 2 to 3 day correction with 116.765 the first downside target.
If Breaking 121 upward UDJPY can reach 125 and then 130-135!
Strategy on low time frame:
Go with the TREND!POSITION SIZE ONLYIF THE PRIOR POSITION STOP IS IN PROFIT(TRAILING TOPTURNS TO TAKE PROFIT LEVEL)
BUYING PULL BACK RED BARS
U.S. Dollar Index lost momentum and pulled back below the 101.50 level as traders reacted to the better-than-expected Non Farm Payrolls report. The report showed that U.S. economy added 253,000 jobs in April, compared to analyst consensus of 180,000.
The nearest support level for the U.S. Dollar Index is located at 101.05. In case the U.S. Dollar Index declines below this level, it will move towards the support at 100.80. A successful test of this level will push the U.S. Dollar Index towards the next support at 100.50.
R1:101.50 – R2:102.00 – R3:102.30
S1:101.05 – S2:100.80 – S3:100.50