The yen has generally continued to perform well in recent days as participants continue to focus on probable further tightening by the Bank of Japan this year as the outlook for rates in the USA has become somewhat more dovish. Although unemployment rose slightly in Japan to 2.5% last month, the job market there is overall quite strong while Japanese annual headline inflation reached a high of more than two years at 4%.
Dollar-yen’s downtrend had seemed quite mature last week but now momentum has returned, pushing the price below support from the 38.2% weekly Fibonacci retracement. Although there’s no oversold signal from either the slow stochastic or Bollinger Bands at the time of writing, the former remains very close to the zone of selling saturation. Volume meanwhile has increased significantly in recent days, which might suggest larger intraday movements.
The next obvious strong support is the area of the 50% weekly Fibonacci retracement around ¥144.30. That would be quite an aggressive target, so it’d probably take the price a while to reach there if the downtrend continues. Continuation lower might be confirmed by two consecutive closes below ¥148. ¥151 is a possible short-term resistance based on behaviour earlier in the week.
The upcoming NFP might complicate the current technical picture, especially if the result is at all surprising. Other things being equal, a better NFP suggests higher inflation also, and the opposite is also often true, so if there’s a surprise either way traders might start to price in expectations for next week’s CPI more firmly.
This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.
Dollar-yen’s downtrend had seemed quite mature last week but now momentum has returned, pushing the price below support from the 38.2% weekly Fibonacci retracement. Although there’s no oversold signal from either the slow stochastic or Bollinger Bands at the time of writing, the former remains very close to the zone of selling saturation. Volume meanwhile has increased significantly in recent days, which might suggest larger intraday movements.
The next obvious strong support is the area of the 50% weekly Fibonacci retracement around ¥144.30. That would be quite an aggressive target, so it’d probably take the price a while to reach there if the downtrend continues. Continuation lower might be confirmed by two consecutive closes below ¥148. ¥151 is a possible short-term resistance based on behaviour earlier in the week.
The upcoming NFP might complicate the current technical picture, especially if the result is at all surprising. Other things being equal, a better NFP suggests higher inflation also, and the opposite is also often true, so if there’s a surprise either way traders might start to price in expectations for next week’s CPI more firmly.
This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.