FED Rate Hike Expectations Likely To Decide The Fate Of USDJPY!
Talk about the safe haven FX pairs. The JPY, CHF & GOLD have long been carrying these characteristics. Here we focus on the JPY & the USDJPY pair. Recently everything in the market is being USD driven! and looking at this pair, it has been so much vulnerable to the fundamental factors affecting the USD such as the ongoing trade war and the FED rate hike proposals. In my opinion the technical analysis at this stage of the market can only be done when the fundamental factors start to clear up.
JPY has long been regraded as a SAFE HAVEN asset, however with recent tensions in the world, the largest reserve currency (USD) has been gaining its own reputation as the safe haven pair as investors see the world's largest economy doing well. So with that said, since the economy is doing so well the FED are expected to hike rates 2 more times this year and if they hike the rate as expected (although the market have already priced in the 4 hikes) the USD is still expected to get much stronger. This will in turn lead to the appreciation of the USD against basket of all major currencies!.
NOW COMING TO THE TECHNICAL ANALYSIS OF THIS PAIR
Looking at the main weekly chart here, it can be seen the long term wedge was violated and retested!. the pair is showing signs of trending upwards however a crucial monthly resistance seems to be blocking this from happening (112.000 level). For this pair to trend upwards the monthly candle needs to close above the 112.000 level and then only then we can decide to go LONG on this pair!. Trading directly into the resistance might be a very risky choice and its not recommended at all
On the flip side, to confirm the price has indeed rejected the 112.00 level, the wedge developing on the weekly charts needs to break and retested in order to take this pair SHORT
To add to the confluence to the downside, the daily chart is showing a strong channel developing and the break and retest of the channel would confirm the pair is headed down.
In short, the pairs direction is in the hands of the FED and other minor fundamental factors. Depending on the fundamental outcome either one of the scenarios is likely to take place and make this pair to trend again.
thank you for your support, please follow me if you like my analysis. if there are any signals pertaining to this thread i will update in the near future but patience is required here
JPY has long been regraded as a SAFE HAVEN asset, however with recent tensions in the world, the largest reserve currency (USD) has been gaining its own reputation as the safe haven pair as investors see the world's largest economy doing well. So with that said, since the economy is doing so well the FED are expected to hike rates 2 more times this year and if they hike the rate as expected (although the market have already priced in the 4 hikes) the USD is still expected to get much stronger. This will in turn lead to the appreciation of the USD against basket of all major currencies!.
NOW COMING TO THE TECHNICAL ANALYSIS OF THIS PAIR
Looking at the main weekly chart here, it can be seen the long term wedge was violated and retested!. the pair is showing signs of trending upwards however a crucial monthly resistance seems to be blocking this from happening (112.000 level). For this pair to trend upwards the monthly candle needs to close above the 112.000 level and then only then we can decide to go LONG on this pair!. Trading directly into the resistance might be a very risky choice and its not recommended at all
On the flip side, to confirm the price has indeed rejected the 112.00 level, the wedge developing on the weekly charts needs to break and retested in order to take this pair SHORT
To add to the confluence to the downside, the daily chart is showing a strong channel developing and the break and retest of the channel would confirm the pair is headed down.
In short, the pairs direction is in the hands of the FED and other minor fundamental factors. Depending on the fundamental outcome either one of the scenarios is likely to take place and make this pair to trend again.
thank you for your support, please follow me if you like my analysis. if there are any signals pertaining to this thread i will update in the near future but patience is required here
