Analysis of the technical aspects of the US dollar and Japanese yen
2023-11-08
■ The US dollar/Japanese yen exchange rate has fallen for three consecutive days after reaching a high in about a year. According to the analysis of the "Sakata Five", the market may turn bearish.
■ If the high point on November 3rd can limit the rise, it may move towards the low point on October 30th, which is a decline in the US dollar and a rise in the Japanese yen.
When predicting market trends, technical analysis is as important as fundamental analysis. The "Sakata Five" is an ancient technical analysis method in Japan, based on five rules (Three gaps pattern, three parallel lines, three rivers, three mountains, and three methods), used to determine market trends. Although there is controversy over the inventor of this method, we will now focus on the "three soldiers" pattern of three consecutive positive (or negative) lines and attempt to conduct a technical analysis of the future US dollar/yen trend.
As of October 31st, the US dollar/Japanese yen exchange rate has risen to 151.74 yen, reaching a nearly one-year high, but failed to reach the high of 151.94 yen on October 21st last year, and subsequently declined. In the following three days from November 1st to November 3rd, price fluctuations almost offset the positive line formed on October 31st. The daily candle chart shows that prices have formed three negative lines at high levels, known as the "Black Three Soldiers" (or "Three Crows"), indicating that the US dollar/yen may decline, indicating that a strong market may soon turn into a weak market. Although prices in Asia are relatively weak around 149 yen, if prices in Europe and America do not receive support around the 3-day high of 150.52 yen, we can expect prices to decline to the low of 148.79 yen on October 30th.
This week, Bank of Japan Governor Ueda will also participate in an online event hosted by the FT on the 9th and will announce the "main opinions" of the Bank of Japan's monetary policy decision-making meeting held from October 30th to 31st. In the United States, Federal Reserve Chairman Powell will participate in the annual seminar of the International Monetary Fund (IMF). Considering that both events occurred at a time after policy decisions, we may not be able to obtain new insights related to policies. Given the release of the Japan-US October Consumer Price Index next week, the US dollar/yen exchange rate may be relatively stable this week.
■ If the high point on November 3rd can limit the rise, it may move towards the low point on October 30th, which is a decline in the US dollar and a rise in the Japanese yen.
When predicting market trends, technical analysis is as important as fundamental analysis. The "Sakata Five" is an ancient technical analysis method in Japan, based on five rules (Three gaps pattern, three parallel lines, three rivers, three mountains, and three methods), used to determine market trends. Although there is controversy over the inventor of this method, we will now focus on the "three soldiers" pattern of three consecutive positive (or negative) lines and attempt to conduct a technical analysis of the future US dollar/yen trend.
As of October 31st, the US dollar/Japanese yen exchange rate has risen to 151.74 yen, reaching a nearly one-year high, but failed to reach the high of 151.94 yen on October 21st last year, and subsequently declined. In the following three days from November 1st to November 3rd, price fluctuations almost offset the positive line formed on October 31st. The daily candle chart shows that prices have formed three negative lines at high levels, known as the "Black Three Soldiers" (or "Three Crows"), indicating that the US dollar/yen may decline, indicating that a strong market may soon turn into a weak market. Although prices in Asia are relatively weak around 149 yen, if prices in Europe and America do not receive support around the 3-day high of 150.52 yen, we can expect prices to decline to the low of 148.79 yen on October 30th.
This week, Bank of Japan Governor Ueda will also participate in an online event hosted by the FT on the 9th and will announce the "main opinions" of the Bank of Japan's monetary policy decision-making meeting held from October 30th to 31st. In the United States, Federal Reserve Chairman Powell will participate in the annual seminar of the International Monetary Fund (IMF). Considering that both events occurred at a time after policy decisions, we may not be able to obtain new insights related to policies. Given the release of the Japan-US October Consumer Price Index next week, the US dollar/yen exchange rate may be relatively stable this week.