Attack and Defense of the 200-Day Moving Average
2024-10-24
■ Against political uncertainty in Japan and the United States, the USD/JPY pair rose again to 151 yen after about three months.
■ Whether the USD/JPY pair will enter a consolidation period or rise further, attention should be paid to the attack and defense of the 200-day moving average.
In Japan, voting and counting votes for the House of Representatives election will be held on the 27th. According to a poll by NHK, the proportion of non-partisan people was close to 35% on the 18th. If the voter turnout rises, the increase in floating votes may be unfavorable to the ruling party. The Liberal Democratic Party may not only lose seats due to political funding issues but is also more likely to be unable to retain most seats after joining the Komeito Party. If this political instability intensifies, market sentiment may deteriorate, triggering concerns about stock market declines and yen appreciation. In the options market, the expected volatility of the 1-month USD/JPY pair rose to 12%, indicating that the market is still wary of the yen's appreciation. In addition, the Bank of Japan's financial policy decision-making meeting will be held on the 30th and 31st. If financial markets are turbulent, the Bank of Japan's monetary tightening policy may be delayed, accelerating the yen depreciation trend.
In the United States, the presidential election will be held on November 5th. According to Real Clear Politics, a U.S. political information website, since President Biden announced his withdrawal from the campaign on July 21, the support rate of Democratic candidate Kamala Harris has risen sharply, surpassing Republican candidate Trump by two percentage points. However, the current support rates of the two are 49.3% and 48.5%, respectively, and the gap has narrowed to 0.8 percentage points. In addition, in the seven key swing states considered to determine the outcome, Trump's support rate is leading in all states (data on the 21st). Since there are few precedents for the vice president to win the presidential election, some opinions have re-believed that the possibility of Trump's victory has increased.
Technical analysis has become an effective means of coping with the drastic changes in the market. The 200-day moving average (DMA), the average of the prices in the past 200 days, is usually used as a trend line of support or resistance. In addition, because it can smooth price fluctuations and remove price "noise," it is valuable in long-term investment strategies. However, because it reacts slowly to sudden price changes, it can also be more effective to judge market trends by combining short-term and medium-term moving averages such as 20 days or 90 days or oscillators showing market overheating (overbought/oversold) signals. Whether USD/JPY will enter a consolidation period or rise further, we need to pay attention to the attack and defense of the 200-day moving average (151.35 yen).
■ Whether the USD/JPY pair will enter a consolidation period or rise further, attention should be paid to the attack and defense of the 200-day moving average.
In Japan, voting and counting votes for the House of Representatives election will be held on the 27th. According to a poll by NHK, the proportion of non-partisan people was close to 35% on the 18th. If the voter turnout rises, the increase in floating votes may be unfavorable to the ruling party. The Liberal Democratic Party may not only lose seats due to political funding issues but is also more likely to be unable to retain most seats after joining the Komeito Party. If this political instability intensifies, market sentiment may deteriorate, triggering concerns about stock market declines and yen appreciation. In the options market, the expected volatility of the 1-month USD/JPY pair rose to 12%, indicating that the market is still wary of the yen's appreciation. In addition, the Bank of Japan's financial policy decision-making meeting will be held on the 30th and 31st. If financial markets are turbulent, the Bank of Japan's monetary tightening policy may be delayed, accelerating the yen depreciation trend.
In the United States, the presidential election will be held on November 5th. According to Real Clear Politics, a U.S. political information website, since President Biden announced his withdrawal from the campaign on July 21, the support rate of Democratic candidate Kamala Harris has risen sharply, surpassing Republican candidate Trump by two percentage points. However, the current support rates of the two are 49.3% and 48.5%, respectively, and the gap has narrowed to 0.8 percentage points. In addition, in the seven key swing states considered to determine the outcome, Trump's support rate is leading in all states (data on the 21st). Since there are few precedents for the vice president to win the presidential election, some opinions have re-believed that the possibility of Trump's victory has increased.
Technical analysis has become an effective means of coping with the drastic changes in the market. The 200-day moving average (DMA), the average of the prices in the past 200 days, is usually used as a trend line of support or resistance. In addition, because it can smooth price fluctuations and remove price "noise," it is valuable in long-term investment strategies. However, because it reacts slowly to sudden price changes, it can also be more effective to judge market trends by combining short-term and medium-term moving averages such as 20 days or 90 days or oscillators showing market overheating (overbought/oversold) signals. Whether USD/JPY will enter a consolidation period or rise further, we need to pay attention to the attack and defense of the 200-day moving average (151.35 yen).