USD and JPY: From a technical perspective
2023-02-08
■ The USD/JPY exchange rate broke through the 127–131-yen range formed by the continuous depreciation of the USD and the appreciation of the JPY
■ The short-term outlook is stable between the low and middle range of 131 yen, and the elasticity will be tested by the high point of 134.77 yen on January 6
As the Federal Reserve Board (FRB) of the United States stopped raising interest rates, the exchange rate of the dollar against the yen hit a low of 127.21 yen on January 16, the yen appreciated, and the market speculated that the Bank of Japan would readjust its policy. After that, the dollar continued to weaken to form a range, but the strong employment data of the United States in January stimulated the dollar to strengthen. In addition, it was reported that the government and Vice President Yumiya approached the appointment of the next governor of the Bank of Japan, which led to the devaluation of the yen and the rise of the dollar exchange rate to 132.90 yen.
The price fluctuation factors of the financial market are divided into economic, political, social and market (supply and demand trend). In addition, it is said that the bullish/bearish sentiment of market participants will affect the market. Emotion will also affect technical analysis and predict the future price direction based on the past price trend.
The USD/JPY exchange rate hit a high of 151.94 yen on October 21 last year. Even after breaking resistance through several returns to the high in late January, the exchange rate remained in the range of 127-131 yen on the whole. However, the market opened on the 6th of this week at 132.18 yen, breaking the three-day high of 131.21 yen, opening the gap "window" between the candle foot and the candle foot. It was pushed back to 131.50 yen on the 6th Asian time, and the recent trend is likely to be a stable performance in the middle and low range of 131 yen. On the other hand, if it continues to rebound, the currency pair may be tested after reaching a high of 134.77 yen on January 6. In addition, on the balance sheet, the leading span of the daily and weekly lines shifted to USD/JPY, indicating a period of turbulence in the business situation. Coincidentally, the monetary policy meeting of the Bank of Japan will be held from March 9 to 10, and the Federal Open Market Committee (FOMC) of the United States will be held from March 21 to 22. Whether the market trend will change, technical analysis can not be ignored.