USDJPY | Perspective for the new week | Follow-up

Updated

Explore the latest market dynamics in our new video as we analyze the USD/JPY movement, surging over 0.90% to 148.05 following a robust US jobs report and elevated Treasury yields. The addition of 353K jobs in January has shifted Fed rate cut forecasts, reflecting a tightening labor market and bolstering confidence in the US economy.

However, amidst this positive momentum, factors such as heightened conflicts in the Middle East are fostering cautious sentiment among investors. The Japanese Yen, drawing in some buying potential, cannot be overlooked. Additionally, the Bank of Japan's recent hawkish stance signals potential shifts away from extensive stimulus and negative short-term interest rates, potentially providing support to the Yen.

As we navigate these intricate market dynamics, this video serves as your guide, offering insights on how to plan your positions strategically for the upcoming week.

USDJPY Technical Analysis:
As discussed in the video, the recent upward momentum is showing signs of easing, leaving room for a possible USD pullback. However, for a confirmed uptrend continuation, we need to see sustained trading above 148.500. Our detailed technical analysis focused on the current bullish market structure, with particular attention to the crucial level of 148.800, set as a pivotal point for the upcoming week. This level gains significance as a potential catalyst for a clear uptrend if buying pressure persists. The market's response to this level at the beginning of the new week will strongly influence the direction of price action in the days ahead.

Join me in exploring potential trading opportunities using trendlines, key levels, and chart patterns. Stay connected to my channel, follow updates, and actively participate in the comment section as we navigate the dynamic USDJPY market together.

Wishing you success as you navigate the USDJPY market this week!
#USDJPY #technicalanalysis #tradingopportunities #inflation #monetarypolicy #Fed #interestrates #economicanalysis #Forextrading

Disclaimer Notice:
Please be aware that margin trading in the foreign exchange market, including commodity trading, CFDs, stocks, and other instruments, carries a high level of risk and may not be suitable for all investors. The content of this speculative material, including all data, is provided by me for educational purposes only and to assist in making independent investment decisions. All information presented here is for reference purposes only, and I do not assume any responsibility for its accuracy.

It is important that you carefully evaluate your investment experience, financial situation, investment objectives, and risk tolerance level. Before making any investment, it is advisable to consult with your independent financial advisor to assess the suitability of your circumstances.

Please note that I cannot guarantee the accuracy of the information provided, and I am not liable for any loss or damage that may directly or indirectly result from the content or the receipt of any instructions or notifications associated with it.

Remember that past performance is not necessarily indicative of future results. Keep this in mind while considering any investment opportunities.

Note

The week has kicked off with a period of consolidation, with price action hovering around the weekly key level as discussed in our recent video. The Japanese Yen is struggling to recover after hitting a new low during the Asian session. The Bank of Japan's hawkish stance on pulling short-term rates out of negative territory may serve as a crucial factor in lending support to the Yen this week. Additionally, concerns about geopolitical tensions arising from conflicts in the Middle East, coupled with worries about slowing growth in China, are factors that may bolster the ascent of the Yen.

On the other hand, the increasing belief that the Federal Reserve (Fed) will maintain higher interest rates for an extended period continues to underpin a potential uptick in US Treasury bond yields, providing support for the US Dollar. Consequently, it is essential to exercise caution ahead of the release of the US ISM Services PMI later today. In light of these developments, the newly identified structure on the 1-hour timeframe will be our primary guide for today.

Good Morning

Note

UPDATE

Trade closed manually

We experienced our first loss of the week as our second buy position from yesterday hit the stop-loss. The Japanese Yen attracted some buyers and broke a two-day losing streak against the USD. A softer risk tone favored the Yen following the Bank of Japan’s hawkish tilt earlier this month. The shift in global risk sentiment, characterized by a subdued tone in equity markets, has contributed to increased flows into the JPY.

This could be attributed to a corrective pullback in US Treasury bond yields, leading to some US Dollar selling and exerting pressure on the USD/JPY pair. It's important to note that the growing acceptance of the Federal Reserve's intention to maintain higher interest rates for a longer period may act as a buffer for this asset. Therefore, short-term trading opportunities will be prioritized using the structures identified on the chart.

Good Morning

Trade active

It's time to secure the sell position as the Japanese Yen finds support from various factors but lacks sustained momentum. Recent market activity suggests short-term trading interest, with the Yen encountering selling pressure and halting its modest recovery against the US Dollar.

Data released from Japan's labor ministry yesterday revealed a concerning trend: real wages fell in December, while household spending declined. This development is undesirable news for the Bank of Japan and, combined with the generally positive sentiment surrounding equity markets, appears to undermine the JPY.

On the other hand, the US Dollar still has the potential to gain momentum amid expectations that the Federal Reserve will maintain higher interest rates for an extended period. This sentiment is reinforced by stronger-than-expected US macroeconomic data and recent hawkish commentary from several FOMC members, which have led investors to reassess their expectations for early and aggressive rate cuts in 2024. Consequently, elevated US Treasury bond yields persist.

In light of these developments, it's advisable to secure all positions while remaining alert for new trading opportunities.

Good Morning

Trade active

The Japanese Yen (JPY) faces selling pressure following dovish remarks from Bank of Japan (BoJ) Deputy Governor Uchida Shinichi, indicating a cautious approach to hiking rates upon ending negative rates. Meanwhile, Federal Reserve officials have expressed no urgency in lowering borrowing costs amidst the resilience of the US economy. Despite this, markets still anticipate five rate cuts throughout the remaining FOMC meetings this year, potentially keeping the USD subdued. Coupled with expectations for a possible shift in the BoJ's policy stance, this may limit the upside potential for the USD/JPY pair. Hence, it's prudent to protect the current buy position and maintain a short-term trading stance.

Good Morning

Trade active

#USDJPY

UPDATE

Protect all buy positions

Trade active

With over 250 pips in profit from four buy positions, the Japanese Yen remains under pressure due to dovish remarks from BoJ Deputy Governor Uchida Shinichi, who indicated a cautious approach toward ending negative rates. Also, because people are more willing to take risks in the market, the Yen might weaken more, helping the USD/JPY pair.

But for now, market participants might hold off on making new bets until they have a clearer idea about what the Federal Reserve might do with interest rates in 2024. So, everyone's waiting for the US consumer inflation figures to come out next week, which will impact the Fed's future policy decisions. This data will be crucial in shaping market sentiment towards the US Dollar and determining the short-term trajectory for the USD/JPY pair.

In the interim, prices may consolidate recent gains amid expectations of a potential shift in the BoJ's policy stance. It is advisable to protect existing buy positions while remaining vigilant for new trading opportunities.

Good Morning

darcsherry

Trade smart. Trade consciously

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USDJPY | Perspective for the new week | Follow-up

by darcsherry

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