USDJPY | Perspective for the new week | Follow-up

28 janv.

The Tokyo Consumer Price Index (CPI) for January witnessed a deceleration in Japan's national capital, dropping to 1.6% from the previous reading of 2.4%. This marks the first time in almost two years that consumer inflation has fallen below the Bank of Japan's (BoJ) 2.0% target. Additionally, the Core CPI (YoY) experienced a decline from 3.5% to 3.1%.

The Bank of Japan's December meeting minutes shed light on the monetary policy outlook and Yield Curve Control (YCC). Members of the BoJ Board expressed a consensus in favor of "patiently maintaining an easy policy." Several emphasized the need to observe a positive wage inflation cycle before contemplating the cessation of negative rates and YCC.

BoJ Governor Kazuo Ueda reaffirmed a strong commitment to achieving the 2.0% inflation target. His statements hinted at a potential gradual reduction of extensive stimulus measures in the future, aligning with the central bank's objectives for inflation and economic stability.

On the flip side, the USD is experiencing a recovery driven by market adjustments in response to the Federal Reserve's (Fed) rate cut expectations. Despite soft Personal Consumption Expenditures (PCE) figures from the US in December, which didn't significantly impact market expectations on the upcoming Fed meeting, there is speculation about a delay in the easing cycle from March to May. However, the Fed's tone in the upcoming meeting could alter these expectations.

Given these recent developments, how should we navigate the current market conditions?

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 148.800. 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.

29 janv.

Transaction en cours

The Japanese Yen has attracted buyers in response to an intraday downtick during the Asian session, exhibiting a mild positive bias against the US Dollar after breaking down the 148.000 level, as highlighted in our recent video.

The heightened conflicts in the Middle East are fostering a cautious sentiment among investors, leading to a generally softer tone in equity markets. This, combined with the Bank of Japan's (BoJ) hawkish stance last week, signaling potential shifts away from extensive stimulus and negative short-term interest rates, may be providing support to the Yen.

However, the sustainability of the JPY's uptick remains uncertain, especially with traders likely to remain on the sidelines ahead of the highly-anticipated two-day FOMC meeting starting on Tuesday [and price action still floating above the ascending trendline highlighted in our recent video]. It's worth noting that the diminishing likelihood of a more aggressive policy easing by the Federal Reserve, coupled with uncertainty about the timing of the first interest rate cut, may constrain any significant USD decline in the absence of pertinent macro data.

Given these factors, the identified structure on the chart will continue to guide trading decisions in response to recent market developments.

Good Morning

29 janv.

Transaction en cours

UPDATE

Protect position as we look out for new trading opportunities

30 janv.

Transaction en cours

We currently hold two sell positions, collectively yielding over 100 pips in profit, as the Japanese Yen attracts some buying activities amidst escalating geopolitical tensions. Concurrently, the US Dollar remains weakened due to positioning ahead of the upcoming Federal Reserve decision.

Intensifying geopolitical concerns point to potential military action against pro-Iranian militias by the US president, heightening the risk of further conflicts in the Middle East. Coupled with the Bank of Japan's recent hawkish stance, indicating a potential shift away from extensive stimulus, these factors strongly support the safe-haven appeal of the JPY.

Furthermore, the continued decline in US Treasury bond yields has narrowed the US-Japan rate differential, further bolstering the appeal of the JPY. As the market awaits the outcome of the two-day FOMC monetary policy meeting, we will safeguard our current sell positions and remain alert for new trading opportunities, utilizing the structures identified in the 1H timeframe.

Good Morning

30 janv.

Transaction en cours

All sell positions as buying pressure reumes and leads to the breakout of the ascending trendline. As discussed during our live session today, we shall be using the identified levels to guide our trading decisions.

31 janv.

Trade fermée manuellement

All buy positions have been closed as the Japanese Yen (JPY) oscillates between modest gains and minor losses against the US Dollar, remaining within a range held over the past couple of weeks. Traders are adopting a cautious stance, choosing to wait on the sidelines due to uncertainty surrounding the Federal Reserve's (Fed) timing for initiating interest rate cuts. The spotlight remains on the eagerly awaited FOMC policy decision scheduled for later today, poised to significantly influence the near-term dynamics of the US Dollar (USD) and potentially provide a new directional impetus to the USD/JPY pair.

Preceding this pivotal central bank event, softer Japanese macroeconomic data, specifically Retail Sales and Industrial Production released this Wednesday, have contributed to weakening the JPY. Additionally, a resurgence of US Dollar (USD) buying, fueled by diminishing expectations for a more aggressive Fed policy easing in 2024, is acting as a supportive factor for the USD/JPY pair. However, this positive influence is counteracted by the Bank of Japan's (BoJ) hawkish stance, persistent concerns about escalating geopolitical tensions in the Middle East, and China's economic challenges, all of which bolster the safe-haven appeal of the JPY.

In navigating today's market conditions, our guiding light will be the structures identified on the chart, providing insights into potential trading opportunities.

Good Morning

31 janv.

Transaction en cours

Protect all sell positions as market participants await the monetary policy decision by the Fed.

1 févr.

Trade fermée manuellement

All sell positions have been closed as the asset continues to trade within a defined range, influenced by a confluence of factors. Soft domestic data is weighing on the JPY, coupled with a moderate uptick in demand for the US Dollar. The positive sentiment surrounding US equity futures acts as a significant headwind for the safe-haven JPY, amidst a bullish run for the US Dollar, backed by the Federal Reserve's less dovish outlook expressed yesterday.

Despite these influences, there are lingering factors offering hope for the Yen. The recent escalation of conflicts in the Middle East, with the potential for a wider war, and China's economic challenges still contribute to a supportive backdrop for the JPY. Furthermore, the Bank of Japan's hawkish stance last week adds an extra layer of support for the domestic currency.

As we navigate the market, attention turns to the US ISM Manufacturing PMI for potential short-term opportunities. The chart levels serve as our guide for identifying new trading prospects, particularly as price action currently oscillates around the descending trendline. Staying attuned to these dynamics enables us to adapt our strategy and capitalize on emerging opportunities in the market.

Happy New Month!

2 févr.

Note

The trading activity has been range-bound over the past 48 hours, with the recent optimism stemming from the Gaza ceasefire discussions supporting a generally positive tone in the equity markets and weakening the Yen. Additionally, the recent increase in US Treasury bond yields may provide some support to the USD. However, market participants seem hesitant to make aggressive directional bets and are waiting for the release of the Nonfarm Payrolls (NFP) report before making any significant decisions. As a result, we will rely on the technical structure to guide our trading decisions going forward. If the price action continues to remain above the descending trendline, we will be on the lookout for a bullish set-up.

Good Morning.

2 févr.

Transaction en cours

Secure all buy positions as the robust NFP data has now cast doubt on the possibility of any interest rate cut and has raised the expectations of interest rates remaining higher for a longer period.