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. See our updated Privacy Policy here.

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
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/FqAsp91Gia
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/cKOUmtj7Dj
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/TnL91f7sl7
  • Human error in the forex market is common and often leads to familiar trading mistakes. These trading mistakes crop up particularly with novice traders on a regular basis. Learn about the top ten trading mistakes and how you can avoid them here: https://t.co/i8E2AXtzF3 https://t.co/cDcjl3Ue09
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/KWOX5wSipe
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/cwSWCpKtaj
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sZLTs https://t.co/zu5hMovbz6
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/QMKyTBOKNG
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/aRkGoNvj6D
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9Flsqcxo9 https://t.co/ltVTNO2sjT
Japanese Yen Forecast: Are the USD/JPY & AUD/JPY Rallies Overcooked?

Japanese Yen Forecast: Are the USD/JPY & AUD/JPY Rallies Overcooked?

Peter Hanks, Strategist

Japanese Yen Outlook:

  • The Japanese Yen has fallen versus the US Dollar since late August despite the Fed’s balance sheet expansion
  • Consequently, USD/JPY surpassed trendline resistance from 2018 which may now provide support
  • AUD/JPY has also rallied, but failed to post a higher-high like USD/JPY which may leave the door open for bearish opportunities

USD/JPY Forecast

The Japanese Yen has faltered against the US Dollar in recent weeks, even as the Fed has expanded its balance sheet, flushing more Dollars into the economy. Despite the seemingly bearish headwind for the Greenback, a period of subdued volatility and robust risk appetite has helped to lift USD/JPY to its highest level since May 2019. In turn, the pair has broken a descending trendline dating to October 2018, a development that could allow for an extension higher – or an early area of support if risk aversion should emerge.

That being said, the week ahead possesses the potential to spark such an emergence. Among a collection of other Yen crosses, USD/JPY and AUD/JPY have seen their implied volatilities wilt to near record lows – which has likely played a role in the Yen’s weakness – but the upcoming trade deal signing between the United States and China could usher in a fresh regime of volatility.

After negotiating for months, the two sides were seemingly unable to agree on many matters until the surprise announcement was made in mid-December that the two sides had come to a Phase One agreement. Since then, risk assets like the S&P 500 and Dow Jones have surged, while volatility – via the VIX – and the Yen have been pressured. Therefore, if the trade deal is short on details or market expectations are not met, the event could bolster the Yen as risk aversion climbs.

USD/JPY Price Chart: Daily Time Frame (April 2018 – January 2020) (Chart 1)

usdjpy price chart rally

In the case of USD/JPY, a series of higher highs and higher lows from August paint an encouraging picture for the medium-term. Surging above a descending trendline from October 2018, the pair may look to employ the level as support if needed.

Similarly, USD/JPY may enjoy buoyancy from the horizontal level at 109.71 which influenced price throughout December. Together, the two areas will look to ward off a deeper retracement that could look to target 108.47 or the 200-day simple moving average. In the meantime, follow @PeterHanksFX on Twitter for updates.

AUD/JPY Forecast

AUD/JPY is another Yen cross which has enjoyed a boost since August, but bulls have been somewhat more constrained. Unlike USD/JPY, the Australian Dollar failed to post a new higher-high versus the Yen since late December as horizontal resistance around the 76.40 level has kept a lid on the pair.

Fundamentally speaking, it can be argued AUD is more sensitive to changes in risk appetite than the US Dollar, so AUD/JPY may provide a better opportunity for bearish biases to be exercised than USD/JPY – especially when considering the technical formations.

AUD/JPY Price Chart: Daily Time Frame (December 2018 – January 2020) (Chart 2)

audjpy price chart

With that in mind, the 200-day simple moving average and the descending trendline from December 2018 will look to act as initial support around the 74 level. If, on the other hand, trade war proceedings impress the market, it would be within reason to expect a continuation higher for AUD/JPY.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Read more:How to Invest During a Recession: Investments & Strategy

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

DISCLOSURES