USDJPY Breaking to Lower Levels

  • Dollar bulls are scattered
  • The Dollar is reeling after Trump’s tariff attack on Mexico
  • There is no economic outperformance from Japan, but still Yen rises
  • Target USDJPY down to 107.45

USDJPY posted losses on Friday after two positive sessions to close the month at 108.28 (-1.21%).


Source:, Spotlight Ideas

This came amid a widespread risk-off trade throughout the global financial markets as risk sentiment deteriorated after Trump announced tariffs on all goods from Mexico. The price he seeks to not impose these charges is that its southern neighbour curb illegal immigration into the U.S.

This created fresh concerns over the aggressive external policy by the U.S. President and if there is truth in the way, Mexico has promised to retaliate the situation could get even worse down the road. All at a time when there seems little progress in the trade dispute with China or any lowering of tension between the U.S. and Iran.

The chart above shows a Fibonacci extension of the major range in May 2019. The fact that 109.00 was not defended with any conviction underlines the rapid collapse in the pair on Friday. Indeed, all the technical measures from “One Minute” through to “One Month” all read as “Strong Sell”.

Therefore, despite a sense that some market participants may take a contrary view and see being short-term oversold I am looking for USDJPY to fall further, That, will only be ameliorated if 109.00 is regained in quick time.

The Yen has stayed strong despite Japanese data disappointing the market. Tokyo inflation rose by less-than-anticipated in May, up by 1.1% vs. the previous 1.4%, while Retail Trade posted a modest 0.4% advance in April. Housing-related data showed that Construction Orders fell in April a whopping 19.9%, while Housing Starts decreased by 5.9%. Industrial Production was the only figure that showed some improvement, up by 0.6% MoM and down by 1.1% YoY.

The Yen is the notable outperformer in the G10 space as safe-haven flows support and for that reason I am seeking more Yen gains to 107.45.


Sell at opening

Target 1 107.45

Stop at 109.20

Macroeconomic Strategist

Stephen Pope is the Managing Partner of Spotlight Group. He has worked in the world of finance since 1982 and has performed d... Continued

Comments on this analysis

Your email address will not be published. Required fields are marked *

Latest Related News

Broad US Dollar weakness and the Pound stays strong, in the Forex Zone

EURUSD trying to negate the intermediate-term down trendGBPUSD stays strong with prod through key psychological barrier at 1.40AUDUSD hits new, multi-month cycle highNZDUSD starting to look more positive USDCAD bear threatUSDJPY correcting lower Continued

US Dollar 2021 strength is trying to resume

The US dollar has seen significant gains versus major currencies in early 2021This was assisted by higher US yields in anticipation of a large, Democrat-driven fiscal boost Corrective US Dollar losses seen over the past week have started to stallThis has seen the US Dollar see notable turning points and rally against the major currencies over the past 24 hoursHere we focus on EURUSD, GBPUSD, AUDUSD,… Continued

US Dollar recovery theme continues, US earnings mostly inspire

Macroeconomic/ geopolitical developments President Joe Biden’s inauguration passed without any notable incident, which was likely a relief for financial markets.Four central banks were in play last week, with modest signals from the Bank of Canada and the European Central Bank of less dovish, de facto minimally more hawkish tones.Earnings season played a significant role, with most banks and financials beating expectations, whilst Netflix was extremely… Continued

Q1/Q2 Elliott Wave views for the Forex Majors – Exclusive interview with Jim Martens!

Here is an in-depth interview with Jim Martens, Elliott Wave International's (EWI) Senior Currency Strategist and editor of the trader-focused Currency Pro Service. In this interview, we will discuss the Major currency pairs, including EURUSD, the US Dollar Index (DXY), GBPUSD, USDCHF, USDJPY, AUDUSD and USDCAD. Here is a link to a free report on trading FX with EWI. It’s normally $79 and not available on… Continued

Bullish into 2021 with blue sweep confirmed

Macroeconomic/ geopolitical developments The Democrats won both seats in the Georgia Senate runoff elections from Wednesday, confirming a “blue sweep”, the Democrats now taking control of both houses of Congress alongside the presidency. Then, Thursday saw unprecedented and shocking events in Washington DC, with Trump supporters storming the Capitol building. The fact that President Trump appeared to incite this activity has seen his social media… Continued

Forex Brokers in your location


72% of retail investor accounts lose money when trading CFDs with this provider.


67% of retail investor accounts lose money when trading CFDs with this provider.


76.4% of retail investor accounts lose money when trading CFDs with this provider.