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Home ANALYSIS

USDJPY marginally higher. Stays under swing area and above 200 hour MA

A.R Chowdhury by A.R Chowdhury
April 5, 2022
Reading Time: 4 mins read
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USDJPY

USDJPY trades between swing area and MAs

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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
moved lower in the Asian session but ran into support against it’s 200 hour moving average (green line) currently at 122.475. The price moved back above that moving average on Friday after bottoming ahead of its 38.2% retracement of the move up from the March 4 low on Wednesday and Thursday of last week. The inability to move below the 38.2% retracement gave the buyers more confidence to push the price higher from a technical perspective.

The USDJPY price has remained above its 200 hour moving average since the break higher on Friday

Although the support has held against the 200 hour moving average, the topside has been restricted as well. Looking at the hourly chart, the high price from Friday, yesterday and again today has stayed below a swing area between 123.02 and 123.188. It would take a move above that area to increase the bullish bias.

So a battle is on between support near the moving averages (the 100 hour moving average at 122.32 is also in play on the downside), and resistance against a swing area. Those technical levels are defining the trading range.

It would take a move and shove outside of those levels to increase the bias in the direction of the break. Until then, buyers are leaning near the support – with stops below – and sellers are leaning against swing area resistance -with stops on a break above.

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A.R Chowdhury

A.R Chowdhury

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