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Home ANALYSIS

The USDJPY is lower today for the 3rd consecutive day but the month belonged to that pair

A.R Chowdhury by A.R Chowdhury
March 31, 2022
Reading Time: 5 mins read
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USDJPY

USDJPY had the largest trading range since March 2020

The price of the  USDJPY 
USD/JPY

The USD/JPY is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Japanese yen of Japan (symbol ¥, code JPY). The pair’s rate indicates how many Japanese yen are needed in order to purchase one US dollar. For example, when the USD/JPY is trading at 100.00, it means 1 US dollar is equivalent to 100 Japanese yen.  The US dollar (USD) is the world’s most traded currency, whilst the Japanese yen is the world’s third most traded currency, resulting in an extremely liquid pair, and very tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Although the range of the USD/JPY isn’t traditionally particularly high, the lack of large price action often associated with other JPY pairs does make it easier to trade.This is especially true for short-term traders, although without offering a great pip potential. Even though the USD/JPY is the world’s second most traded pair, it’s not as popular as one might think with regards to retail traders.The pair carries a reputation as “boring”, although this isn’t an entirely accurate reflection. Trading the USD/JPYThe JPY is highly regarded as a safe haven currency, with investors often increasing their exposure following periods of uncertainty or market-induced fallouts.As both the US and Japan are highly developed economies, there are several key factors affecting the value of either currencies. This includes a range of economic indicators such as gross domestic product (GDP) growth, inflation, interest rates and unemployment data. Monetary policy by the US Federal Reserve and Bank of Japan are also large determinants in the value of each currency.

The USD/JPY is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Japanese yen of Japan (symbol ¥, code JPY). The pair’s rate indicates how many Japanese yen are needed in order to purchase one US dollar. For example, when the USD/JPY is trading at 100.00, it means 1 US dollar is equivalent to 100 Japanese yen.  The US dollar (USD) is the world’s most traded currency, whilst the Japanese yen is the world’s third most traded currency, resulting in an extremely liquid pair, and very tight spreads, often staying within the 0 pip to 2 pip spread range on most forex brokers. Although the range of the USD/JPY isn’t traditionally particularly high, the lack of large price action often associated with other JPY pairs does make it easier to trade.This is especially true for short-term traders, although without offering a great pip potential. Even though the USD/JPY is the world’s second most traded pair, it’s not as popular as one might think with regards to retail traders.The pair carries a reputation as “boring”, although this isn’t an entirely accurate reflection. Trading the USD/JPYThe JPY is highly regarded as a safe haven currency, with investors often increasing their exposure following periods of uncertainty or market-induced fallouts.As both the US and Japan are highly developed economies, there are several key factors affecting the value of either currencies. This includes a range of economic indicators such as gross domestic product (GDP) growth, inflation, interest rates and unemployment data. Monetary policy by the US Federal Reserve and Bank of Japan are also large determinants in the value of each currency.
Read this Term
has been down for 3 consecutive days, but the month of March saw the USDJPY have the largest range for a calendar month since March 2020 – the start of the pandemic lockdown in the US.

In March 2020, the low to high trading range was 1053 pips. This month the range was 1045 pips – just 8 pips from March 2020. The range this month and in March 2020 were the largest one month trading ranges since November 2016.

Looking at the weekly chart, the low for the month (in the first week) based within a swing area between 114.20 to 114.728. The low for the month was at 114.64. The basing at that swing area helped contribute to the upside momentum. A strong launch pad can lead to a powerful first step

ON the way higher, the price ripped through 118.658 swing area from December 2015 to January 2016. A higher swing area between 121.68 and 122.019 gave traders cause for pause, but was broken earlier this week and the price raced up toward the swing highs going back to 2015 at 125.27 and 125.85.

The high price this week reached 125.09 – within 18 pips of the first extreme high level from 2015. Given the extended range for the month, the market was ready to lean against the higher extremes.

USDJPY

USDJPY based against a swing area. Moved up to extremes.

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What next?

Looking at the daily chart, the 38.2% retracement of the move up in March comes in at 121.10. If the price can hold that level, the correction is just a plain-vanilla variety. A resumption of the move to the upside can be expected.

Conversely,iIf that level can be broken, then the sellers can add to their corrective move lower with 120.00 and the 50% of the move up at 119.868 as the next downside targets.

USDJPY

USDJPY corrects from the March range toward the 38.2%
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A.R Chowdhury

A.R Chowdhury

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