USDJPY Ready for the distribution phase down to 142!

23 Nov 2023

Currently, I am closely monitoring the dynamics of the currency market between the Japanese yen (JPY) and the United States dollar (USD). I realize that the JPY is regaining ground against the USD, and this trend seems to be driven by expectations that the Bank of Japan (BoJ) is preparing to conclude its accommodative monetary policy. At the same time, the USD is losing momentum due to the growing belief that the Federal Reserve (Fed) has indeed completed its tightening efforts. Speculation about the BoJ possibly abandoning its negative interest rate policy in 2024 is contributing to the decline in the USD/JPY pair. I am also reacting to contrasting economic information from the United States, including mixed signals on the job market and consumer sentiment. Technical analysis reveals that the USD/JPY pair has surpassed the 23.6% Fibonacci retracement level, and a potential drop below 149.00 could indicate further declines. I am eagerly awaiting preliminary PMI data from the Eurozone and the United Kingdom, along with Japan's Core CPI, as they could influence global risk sentiment. On the daily chart, I have highlighted an upward channel followed by an accumulation phase and a manipulation phase. I am now awaiting the distribution phase after the price dropped to the 147.40 level and then retested the 149.11 level with an A-B-C-D pattern. Wishing everyone a good day of trading.

26 Nov 2023

Catatan

The USD/JPY exchange rate closed the week around 149.47 with a slight loss of 0.02%. From a technical standpoint, surpassing the weekly peak at 149.75 could encounter resistance near 150.00. Strength above this level might negate the negative bias, pushing the exchange rate towards 151.00 and beyond. Conversely, a decrease could find support at 149.00, with a break below potentially leading the exchange rate to the range of 148.35-148.30 and potentially 148.00. The recovery of the yen is driven by speculation about a change in the Bank of Japan's policy and inflation data above 2%. Expectations of substantial salary increases support the outlook for stable inflation, allowing the BoJ to end the negative interest rate policy by 2024. The JPY also benefits from investor caution regarding potential interest rate hikes by the Federal Reserve, with a weak dollar contributing to the withdrawal of the USD/JPY exchange rate from weekly highs. A modest increase provides support to the dollar ahead of the release of preliminary PMI indices for the United States.