News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Indices Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.25% US 500: -0.30% Germany 30: -0.45% France 40: -0.65% FTSE 100: -0.72% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/e4UVs9zs2k
  • 🇫🇷 Balance of Trade (JAN) Actual: €-3.95B Previous: €-3.39B https://www.dailyfx.com/economic-calendar#2021-03-05
  • The Consumer Price Index, better known by the acronym CPI, is an important economic indicator released on a regular basis by major economies to give a timely glimpse into current growth and inflation levels. Learn how to better understand CPI here: https://t.co/nAa0fHHGbZ https://t.co/pBlhEa03sI
  • Heads Up:🇫🇷 Balance of Trade (JAN) due at 07:45 GMT (15min) Previous: €-3.39B https://www.dailyfx.com/economic-calendar#2021-03-05
  • China Foreign Ministry Spokesman Wang Wenbin: Fighting virus requires solidarity, nations to cooperate China, US should cooperate to counter virus - BBG
  • (Commodities Briefing) Gold Prices at Risk as Crude Oil Benefits from Surprise OPEC+ Output Hold #Gold #CrudeOil #OPEC #nfp https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/03/05/Gold-Prices-at-Risk-as-Crude-Oil-Benefits-from-Surprise-OPEC-Output-Hold.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/7MckHTReTu
  • The New Zealand Dollar may resume its broader uptrend, with NZD/USD and NZD/JPY eyeing key rising support. NZD/CAD and NZD/CHF appear to have more room for near-term losses, however.Get your market update from @ddubrovskyFX here:https://t.co/6hD7zsNHIh https://t.co/zYKUh6mVj1
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.87%, while traders in Germany 30 are at opposite extremes with 66.27%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/rNFAg78N7v
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.00% 🇨🇭CHF: -0.04% 🇯🇵JPY: -0.07% 🇪🇺EUR: -0.11% 🇦🇺AUD: -0.19% 🇳🇿NZD: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/hpiN5FbuNz
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Wall Street: -0.32% US 500: -0.38% Germany 30: -0.65% France 40: -0.80% FTSE 100: -0.89% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/B19fwTOt3O
USDJPY Running Out of Steam as Extremes Are Not Meant to Last

USDJPY Running Out of Steam as Extremes Are Not Meant to Last

Daniel Dubrovsky, Strategist

Talking Points:

  • It’s quite rare for the USDJPY to gain or decline for more than 6 consecutive weeks
  • A negative divergence in the pair’s persistent runs has developed over the two years
  • Download the Consecutive Bars Indicator to see these same runs on the Tradestation Marketscope 2.0 platform for free, here

Between 2005 and 2012, it was a rare event to see USDJPY rally or tumble for more than six consecutive weeks. Since the pair started its incredible run from record lows, however, these instances have grown more dramatic. Runs of such remarkable consistency represent exceptionally strong trends, but the more mature these moves are, the greater the likelihood that a correction (be it small or large) is going to occur. Using the DailyFX Consecutive Bars App we find that a record breaking 11-consecutive week run formed in the lead up to the Bank of Japan’s open-ended stimulus program (introduced April 4, 2013). Since then though, the bullish drive has come in shorter and shorter waves.

A divergence in the consistency of the USDJPY’s rallies does not necessarily indicate that a reversal is at hand (this is a weekly chart, so timing needs to account for the periodicity at the very least). Given the proper fundamentals and speculative appetite, the pair can continue its advance; but its progress would likely be more measured.

Looking at the 1Q 2015 forecasts for the US Dollar and Japanese Yen produced by the DailyFX Analysts, the long-term bull trend does find significant support. However, as bullish appetite dries up; the chance of a rebalancing grows. In fact, after the 11 consecutive week rally through 11/10/2012 and the 8 week rally through 10/26/2013, the USDJPY failed to go to any relative extremes over a period spanning 8 months. When BOJ surprised us with additional stimulus (introduced October 31, 2014) the USDJPY diverted from a rebalancing towards a shorter wave of consecutive gains that lasted 6 weeks. The DailyFX Consecutive Bars App can be used to find extreme movements and we can use past performance to see just how persistent trends are (in this case on a weekly basis).

USDJPY Running Out of Steam as Extremes Are Not Meant to Last

Weekly Chart Created Using FXCM Tradestation Marketscope 2.0

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES