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Home ANALYSIS

USDJPY trades below the 50% midpoint of the day’s trading range

A.R Chowdhury by A.R Chowdhury
March 28, 2022
Reading Time: 5 mins read
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USDJPY trades below the 50% midpoint of the day’s trading range

USDJPY

USDJPY falls below 50% and the 200 bar MA on 5 minute 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.
Read this Term
has now retraced more than 50% of the move up from the day’s low at 123.544. The price is also below intraday 100 and 200 bar MAs at 123.91 and 123.406. The price moved below the 100 hour MA and corrected back toward that MA, only to find willing sellers. That was a “tell” for intraday traders that the trend party to the upside may be over.

The pair has been trading above and below the 200 bar MA, but has dipped further to the downside.

Intraday, watch the 200 bar MA at 123.412 and the 50% midpoint at 123.544 for resistance now if inclined to trade the short side.

Giving the sellers some additional hope comes from the weekly chart below.

The move to upside today saw the price move above swing highs from Nov/Dec 2015 above 123.706. The high stalled ahead of the highest highs from 2015 at 125.27and 125.85. The high reached 125.093. The price is now below the Nov/Dec highs at 123.706 with the price at 123.23 as I type.

That too was not great for the buyers. 1. Failed on the upside target, and 2. Fell below the next highest high at 123.706.

USDJPY

USDJPY on the weekly chart

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Now, is it all bad/bearish?

No. The price has trended higher and is up 14 of 16 days. It is hard to get in front of a roaring train.

The price is still higher on the day. The price is testing the 50% of the move up from Friday’s corrective low (not today’s low) at 123.13 (the low reached 123.135). See the hourly chart below.

USDJPY

USDJPY on the hourly chart

A correction below the 50% midpoint of the move higher today is not the end of the world but it is a start especially after the sharp move higher. There are some buyers offside.

So stay below 123.41. Stay below 123.544, and in the short term, the sellers can hold and hope for more downside momentum.

Move above those levels, and the waters are muddy again with 123.706 another upside target that would need to hold resistance if the sellers are to have a shot.

Absent that, and the sellers are not winning.

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A.R Chowdhury

A.R Chowdhury

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