Yen weakens as “risk on” theme resumes (USDJPY Forecast)

Intermediate
  • Hopes of a COVID-19 vaccine, alongside positive progress by France and Germany with respect to a European recovery fund have seen global financial markets shift back towards a “risk on” theme this week.
  • Global stock averages have surged back higher to reject prior negative signals from mid-May, see our report here from Tuesday.
  • In the Forex markets, most currencies, particularly the “risk currencies” (Australian, New Zealand and Canadian Dollars), have all rallied versus the US Dollar.
  • But in turn, the US Dollar has pushed higher versus the Japanese Yen, with the Yen the weak currency as is usual in a “risk on” phase. Here we spotlight USDJPY

USDJPY day trade outlook: Threat up through key 108.17

A firm advance on Tuesday above 107.50 and 107.77 barriers to stop exactly at the top of our 108.04/08 resistance area, after a tentative probe higher Monday, to retain the positive tone from the firm mid-May rally (to 107.77), to keep the risk higher Wednesday.

·      We see an upside bias for 108.08, then key 108.17; a break above here aims for 108.59 and maybe even towards 109.10, possibly key 109.38.

·      But below 107.31 targets 106.71, maybe even towards 106.24.

USDJPY intermediate-term outlook

The late April selloff up through 106.89 signalled an intermediate-term shift to a bear trend.

  • Downside threat: We see an intermediate-term bear trend to aim for 105.12 and 103.04, maybe 101.16.
  • What changes this? Above 108.17 shift the intermediate-term bear trend to neutral and only through 109.38 to bullish.

4 Hour USDJPY Chart

USDJPY chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

Comment on this video

Your email address will not be published.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


Latest Related News

USDJPY Completing A Pullback and Turning Higher – Elliott wave analysis

USDJPY made a sharp rise from the 101.16 level, following a completed A-B-C move into a leg Y of C), which is part of a bigger triangle correction. We labelled recent rally as A of D), which is completed at 111.72 level, and is being retraced for almost 61.8 percent into a corrective wave B. USDJPY, daily On 4h chart of USDJPY we see price… Continued

Forex Range Bound

A quiet week saw a minor reversal and profit taking point for the US Dollar Index (DXY)EURUSD negative in a rangeElsewhere currencies stuck in the middle of their ranges (GBPUSD, USDJPY, AUDUSD, NZDUSD, USDCAD) Continued

US Dollar stays firm, aiming higher

Pound respects major resistance (GBPUSD)Euro breaks down (EURUSD)Positives appear in Dollar-Yen, as it de-correlates from equities (USDJPY) Continued

USDJPY aiming back lower (USDJPY forecast)

Global financial markets have shifted back to more of a “risk off” phase since the start of Q2 into April, with stock averages lower (see our recent reports on the DAX and S&P500 ).In turn, this “risk off” phase has seen broader US Dollar strength resuming, except against the Yen, with the safe haven Japanese currency probing lower against the US Dollar.Despite a small USDJPY… Continued

Dollar reverses, breaks key support (DXY)

Euro breaks up (EURUSD)Pound hits major resistance (GBPUSD)Dollar-Yen refuses to rise with equities (USDJPY) Continued

Forex Brokers in your location