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
EUR/USD
Mixed
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
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.32% 🇨🇦CAD: 0.05% 🇦🇺AUD: -0.00% 🇯🇵JPY: -0.28% 🇪🇺EUR: -0.34% 🇬🇧GBP: -0.50% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/XWscJjWQHq
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: -0.02% Gold: -1.05% Silver: -1.40% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ySjnrTUWnk
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.54%, while traders in EUR/USD are at opposite extremes with 72.12%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/tyXcZZL0qf
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.39% France 40: 0.32% FTSE 100: 0.26% US 500: 0.01% Wall Street: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/ljSeRVDbh8
  • Gilead Sciences receives FDA approval for Remdesivir - BBG
  • $GILD | Gilead Sciences receives FDA approval for coronavirus treatment remdiesivir
  • https://t.co/WnuPTDjq0J
  • Can bulls continue to push? While the bullish theme in Gold remains on hold, buyers haven’t been so bashful around Bitcoin. Get your $btc technical analysis from @JStanleyFX here:https://t.co/yLoAnTe6Py https://t.co/HD2spNq4FC
  • Precious Metals Update: #Gold 1904.24 (-1.04%), #Aluminum 1843.50 (+0.49%), and #Copper 6991.50 (+1.34%) [delayed]
  • US Dollar volatility remains heightened in the midst of back-and-forth stimulus negotiations. Get your $USD market update from @RichDvorakFX here:https://t.co/CfpaGfgTrq https://t.co/YCU6VIjlwX
USD/JPY Technical Analysis: Is This The Pre-Helicopter Money Run Up?

USD/JPY Technical Analysis: Is This The Pre-Helicopter Money Run Up?

2016-10-04 14:55:00
Tyler Yell, CMT, Currency Strategist
Share:

Talking Points:

  • USD/JPY Technical Strategy: USD now turning into multiple levels of resistance
  • Bank of Japan's “yield curve control,” may set the stage for a large JPY drop

Access Our Free Q4 Trading Guides That Focus On Tradeable Themes Here

The price of USD/JPY is running higher as the opening range for October is getting set. Friday will bring Non-Farm Payroll in the United States for September, and Fed Speakers continue to introduce two-way risk regarding the path of interest rates in the US.

Over the last two-weeks since the Bank of Japan introduced “Yield-Curve Control” in exchange for targeting the monetary base (introducing more stimulus), we are seeing a subtle shift in attitude toward the implications of shifting policy strategy thanks to the mind and words of our James Stanley.

In short, Helicopter Money has been discussed as a possible new frontier of monetary easing to go from recession recovery (QE’s focus) to fostering growth. However, helicopter money may be coming in the form of “Yield Curve Control,” by encouraging private money to buy bonds to support a fiscal action like infrastructure. The price of bonds can be guaranteed by the BoJ with the new policy, and this could help support what the Abe government is looking to achieve with their government.

While aggressive JPY weakness will not happen right away, even though a new trend could be setting itself up, we could see the path being set for the next great wave of JPY selling. We’ve long noted that JPY strength from June 2015 to present is due in large part to the repatriation of JPY from Japanese institutions. However, a fixed zero-yielding JGB could spark the next great carry trade from Japan as institutional investors go once again on the great hunt for yield in spite of the zero-yielding domestic bond market.

USD/JPY Accelerates To Median Line Resistance Extending Late-September’s Uptrend

USD/JPY Technical Analysis: Is This The Pre-Helicopter Money Run Up?

Chart Analysis:

Looking above, you can see what appears to be a very clear downtrend as highlighted by Andrew’s Pitchfork (Red). The long-term trend shows the path of least resistance, but it is worth being watchful for signs of a trend change.

On the pitchfork above, you can see that there are three key levels of resistance on USD/JPY. The median line itself, which has a leading slope in the direction of the trend is 102.71. The middle line between the upper parallel and the median line sits at 105, and the upper parallel line comes at a strong confluence of technical resistance. The upper median line lands in-between 107/108.5 and aligns with the 200-DMA and the 38.2% retracement of the November-July price range.

In previous market notes, we’ve discussed how Ichimoku Cloud would be one of the first long-term indicators to register a Bullish signal on a break and close above 103.20 on the daily chart.

Another thing to note is the opening range of October that was briefly mentioned at that the beginning. Opening Range reversals are commonplace and should be indicative of trend continuation. In the case of October, we’d have an opening range reversal if the price of USD/JPY broke below 101.17 (Monday’s low) in the second week of October and continued lower. However, a continuation of the resistance levels mentioned above breaking and we could see traders start to push the market higher in fear of missing out on the next USD/JPY long trade.

Shorter-Term USD/JPY Technical Levels: October 4, 2016

For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours.

USD/JPY Technical Analysis: Is This The Pre-Helicopter Money Run Up?

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

DISCLOSURES