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Home ANALYSIS

USDJPY lower after 6 days higher

A.R Chowdhury by A.R Chowdhury
March 15, 2022
Reading Time: 5 mins read
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USDJPY lower after 6 days higher

USDJPY

USDJPY retest its broken trendline on the daily chart

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.
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has moved higher for 6 consecutive days. The move took the price from 114.80 to the high today at 118.44. The price yesterday closed at 118.20. The low price today reached 116.688. The current price is at 118.00.

Looking at the daily chart, the move to the upside yesterday broke above a topside trendline connecting highs going back to the end of March, November, and early January. The underside of that trendline cuts across at 117.74. The low price today did dipped below that level but has quickly rebounded.

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Watch the 117.74 level going forward. A move below with momentum should see a corrective probing to the downside.

Drilling down to the five minute chart, recall from a post yesterday, the pair had been stepping higher in a trend like fashion. The price action yesterday held support near its 50% midpoint of the last leg higher (follow the yellow areas on the chart below), and extended to a new high at the close. That momentum continued into the new trading day with the 100 bar moving average holding support as the price rose to the new cycle high at 118.44.

However, the 100 bar moving average (blue line) was finally broken with momentum, as was the 200 bar moving average (green line), and the buyers turned to sellers pushing the price down to the low for the day at 117.688.

Since then, the price has seen a rebound and is currently up retesting it’s broken 100 bar moving average. A move above it and the 200 bar moving average at 118.14 (green line in the chart below), would give buyers more hope. Stay below and the short term bias is still corrective to the downside for the USDJPY.

USDJPY

USDJPY trend stalls on the break below MAs
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A.R Chowdhury

A.R Chowdhury

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