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
Bearish
Wall Street
Bullish
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
Gold
Bullish
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
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
USD/JPY
Mixed
More View more
Real Time News
  • Both the S&P 500 and $EURUSD will enter the coming week with momentum to their back. What can trip up the rallies? What could keep them going? My overview for the week ahead: https://www.dailyfx.com/forex/video/daily_news_report/2020/12/05/SP-500-and-EURUSD-Rallies-Face-Different-Conviction-Questions-.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/YfEXEhkbhl
  • After the recent strength of EUR/USD, a period of consolidation is likely ahead of two critical meetings: of the European Central Bank and the European Council. Get your $EURUSD market update from @MartinSEssex here:https://t.co/Slu7tHo2a4 https://t.co/9am4szeia1
  • Triangle patterns have three main variations and appear frequently in the forex market. These patterns provide traders with greater insight into future price movement and the possible resumption of the current trend. Learn about triangles here: https://t.co/ZukLITx2KG https://t.co/gvkXqKDQyH
  • Continuation patterns can present favorable entry levels to trade in the direction of the prevailing trend. Use continuation patterns in your technical analysis here: https://t.co/TUVnO3bO1P https://t.co/vBLkMKjf4x
  • Cyclical and non-cyclical stocks can help diversify a trader’s equity portfolio. Get your guide to understanding these stocks here: https://t.co/h7BKTd2J8N https://t.co/n8vpmuLdTW
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/CZePv1JEFh
  • The US dollar is unloved, oversold and at lows last seen over 30-months ago. At the moment there seems to be very little reason to buy the greenback. Get your $USD market update from @nickcawley1 here:https://t.co/VY3SLs35cp https://t.co/AVpY2GkGUG
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here: https://t.co/DWm7cBMUg9 https://t.co/IUii5478Jf
  • The Swiss Franc may continue higher against the US Dollar as technical pressure favors USD/CHF bears. .Get your market update from @FxWestwater here:https://t.co/yqJbbhAWiu https://t.co/TCBkQdrMAR
  • RT @jposhaughnessy: BOOM! Mystery solved. https://t.co/njXlgejE0j
Japanese Yen Weekly Technical Outlook: Recent Yen Selloff May Hit Pause

Japanese Yen Weekly Technical Outlook: Recent Yen Selloff May Hit Pause

2018-09-24 11:00:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- The Japanese Yen was once again the worst performing currency last week, but USD/JPY only gained +0.47% percent in the process.

- Buoyed risk appetite will favor the commodity currency crosses over the core developed currency crosses now that ‘hard Brexit’ fears have been stoked.

- Retail traders continue to buy the Yen on dips, suggesting that price losses are still likely in the near-term.

See our long-term forecasts for the Japanese Yen and other major currencies with the DailyFX Trading Guides.

Technical Forecast for the Japanese Yen: Mixed

The Japanese Yen had another rough week, diving deeper into the red across the board in September: AUD/JPY is now leading the pack, up by +2.83% on the month after gaining +2.59% between September 16 and 21 (the best performance among the JPY-crosses). Similarly, EUR/JPY added +1.54% last week and is now up by +2.69% on the month.

The ongoing improvement in risk appetite across the board is helping keep the Yen down. Fresh all-time highs in US equity markets, a breakout in the Nikkei 225, and another drift higher in sovereign bond yields in developed markets has investors dropping lower yielding currencies (CHF/JPY and USD/JPY) in favor of their higher yielding counterparts (AUD/JPY, CAD/JPY, and NZD/JPY). In an environment where stocks rally, particularly in Japan and the US, the Yen should remain generally weak; but now that ‘hard Brexit’ fears have started to materialize once again, pairs like EUR/JPY and GBP/JPY should lag behind.

USD/JPY Price Chart: Daily Timeframe (January to September 2018)

Japanese Yen Weekly Technical Outlook: Recent Yen Selloff May Hit Pause

There was more topside follow-through over the past five days in USD/JPY following the breakout above the downtrend from the July 19 and September 5 highs. On September 18, price closed above the August 1 swing high at 112.15, in the process triggering a targeted return to the July high at 113.18. Price is still above its daily 8-, 13, and 21-EMA envelope, and both daily MACD and Slow Stochastics trend higher above their respective signal or neutral lines, the near-term outlook for USD/JPY remains bullish.

The shooting star/hammer on Friday, however, warns that the current bullish may be tested in the coming sessions; a move below the daily 8-EMA, which provided support for the September 18 bullish outside engulfing bar, would invalidate the near-term bullish outlook.

GBP/JPY Price Chart: Daily Timeframe (January to September 2018)

Japanese Yen Weekly Technical Outlook: Recent Yen Selloff May Hit Pause

GBP/JPY’s breakout last week was moving along unencumbered, clearing the August 1 high at 147.15, triggering the upgraded outlook for a move into the July high near 149.31. While the July high was indeed achieved, price action on Friday, September 21, suggests that the near-term outlook has changed. Even though price remains above its daily 8-, 13, and 21-EMA envelope, the bearish outside engulfing bar at the end of the week neutralizes near-term bullish momentum.

To this end, both daily MACD and Slow Stochastics remain above their respective signal or neutral lines, but have started to compress and turn lower. Considering that the catalyst for the turn – fears of a ‘hard Brexit’ – aren’t likely to die down in the coming week, GBP/JPY’s previously bullish outlook must be downgraded to neutral.

EUR/JPY Price Chart: Daily Timeframe (January to September 2018)

Japanese Yen Weekly Technical Outlook: Recent Yen Selloff May Hit Pause

EUR/JPY showed follow-through on its breakout attempt, fulfilling its bullish impulse higher by running into its highest level since April 26, in the process clearing out the August 1 high at 131.15. EUR/JPY continues to hold above its daily 8-, 13, and 21-EMA envelope, and both daily MACD and Slow Stochastics trend higher above their respective signal or neutral lines. Price gains on Friday were cut down to end the session with a shooting/star hammer, suggesting that the run up to the July high near 131.99 may not be achieved so easily in the near-term. A move below the daily 8-EMA would invalidate the near-term bullish outlook, as EUR/JPY hasn’t closed below its daily 8-EMA since September 10.

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

OTHER TECHNICAL FORECASTS:

Australian Dollar Forecast: AUD/USD Eyes Key February Trend Line as EUR/AUD Prolongs Reversal

Euro Forecast: Looking for Euro Breakout to Hold

US Dollar Forecast: Dollar Triggers a Technical Breakdown, Will Bears Show Up?

Equity Forecast as Risk-On Takes Hold: S&P 500, Dow, DAX, FTSE and Nikkei

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX.

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

DISCLOSURES