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Home ANALYSIS

USDJPY moves below old March high. Can the sellers keep the pressure on?

A.R Chowdhury by A.R Chowdhury
April 12, 2022
Reading Time: 4 mins read
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USDJPY

USDJPY moved back below the old March high

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 moved below the old high from March 28 at 125.093. Recall from yesterday, the price moved above that level, and on the hourly chart peaked against the underside of a old broken trendline (see chart above). Sellers leaned against that level and consolidated over the last 24 hours or so.

The CPI has helped to push the price lower and back below that old high level. That level will be a barometer for both buyers and sellers in trading today. Can the sellers keep pressure on?

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On more downside momentum, the 100 hour moving average comes in at 124.487 and would be the next major target on the increased selling pressure.

Of note technically off the longer term monthly chart below, is that the price high yesterday and today tested the swing high from June 2015 at 125.851. The high price yesterday reached 125.764 just below that key level. The high price today was at 125.75. The highs going back to 2015 are symmetrical to the highs seen over the last two months. The inability to move above those levels may give sellers more confidence to lean and push lower.

Conversely a break above would likely lead to stops being triggered and more upside momentum.

USDJPY

USDJPY backed off from 2015 highs

The opening bell is a head with the S&P index up around 36 points in premarket trading. The S&P E-mini contract has come off it’s highs and trades up around 0.75% or 32.25 points at 4441.50.

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A.R Chowdhury

A.R Chowdhury

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