The USDJPY
USD/JPY
The USD/JPY is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Japanese yen of Japan (symbol ¥, code JPY). The pair’s rate indicates how many Japanese yen are needed in order to purchase one US dollar. For example, when the USD/JPY is trading at 100.00, it means 1 US dollar is equivalent to 100 Japanese yen. The US dollar (USD) is the world’s most traded currency, whilst the Japanese yen is the world’s third most traded currency, resulting in an extremely liquid pair, and very tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Although the range of the USD/JPY isn’t traditionally particularly high, the lack of large price action often associated with other JPY pairs does make it easier to trade.This is especially true for short-term traders, although without offering a great pip potential. Even though the USD/JPY is the world’s second most traded pair, it’s not as popular as one might think with regards to retail traders.The pair carries a reputation as “boring”, although this isn’t an entirely accurate reflection. Trading the USD/JPYThe JPY is highly regarded as a safe haven currency, with investors often increasing their exposure following periods of uncertainty or market-induced fallouts.As both the US and Japan are highly developed economies, there are several key factors affecting the value of either currencies. This includes a range of economic indicators such as gross domestic product (GDP) growth, inflation, interest rates and unemployment data. Monetary policy by the US Federal Reserve and Bank of Japan are also large determinants in the value of each currency.
The USD/JPY is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Japanese yen of Japan (symbol ¥, code JPY). The pair’s rate indicates how many Japanese yen are needed in order to purchase one US dollar. For example, when the USD/JPY is trading at 100.00, it means 1 US dollar is equivalent to 100 Japanese yen. The US dollar (USD) is the world’s most traded currency, whilst the Japanese yen is the world’s third most traded currency, resulting in an extremely liquid pair, and very tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Although the range of the USD/JPY isn’t traditionally particularly high, the lack of large price action often associated with other JPY pairs does make it easier to trade.This is especially true for short-term traders, although without offering a great pip potential. Even though the USD/JPY is the world’s second most traded pair, it’s not as popular as one might think with regards to retail traders.The pair carries a reputation as “boring”, although this isn’t an entirely accurate reflection. Trading the USD/JPYThe JPY is highly regarded as a safe haven currency, with investors often increasing their exposure following periods of uncertainty or market-induced fallouts.As both the US and Japan are highly developed economies, there are several key factors affecting the value of either currencies. This includes a range of economic indicators such as gross domestic product (GDP) growth, inflation, interest rates and unemployment data. Monetary policy by the US Federal Reserve and Bank of Japan are also large determinants in the value of each currency. Read this Term has moved to a session low of 141.79. That is just above the swing low from September 23 at 141.73.
Below that level is the 38.2% of the move up from the August low at 141.15, followed by the key (and rising) 100 day MA at 140.735. The last time the price tested that key 100 day MA was back on August 2. The price bounced off that MA level and started the trend move that ultimately peaked at 151.938. That high was the highest level since 1990. Ahead of that MA is the 50% of the move up from the August low. That comes in at 141.155. A low from September 22 comes in at 140.308.
All those levels
141.73 – low from September 23,
141.15 – 50% of move up from August low
140.73 – 100 day MA
140.308 – low from September 22
Are the next downside targets.
Needless to say the lower CPI has the dollar selling momentum going (it was a binary event). Stocks are higher with the Nasdaq now up 5.57% on the day. Yields are lower with the 10 year yield down -27 basis points at 3.86%. The 2 year is down -29 basis points at 4.33%.
Taking a broader look at the USDJPY, looking at the monthly chart, the USDJPY low for the year from January was at 113.46. The move to the upside took the pair up over 3800 pips. That is huge. So there is room to roam to the downside.
As a guide, the 38.2% of the move up from the 2022 low comes in at 137.24. That would be a minimum target if dollar selling becomes more and more entrenched. It certainly is not out of the question. It is important to keep that perspective.
Having said that, that is down the road. What is ahead of us (that we can see) , is the 100 day MA and the swing levels on the daily chart from 140.30 to 141.73. Get below and stay below those levels, will open another downside door for the USDJPY.
Conversely, hold and the sellers are not taking back the control that they need to do to give the sellers more confidence.
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