Japanese Yen Value Outlook: USD/JPY, AUD/JPY, CAD/JPY

JAPANESE YEN FORECAST: USD/JPY PRICE ACTION PLUNGES LOWER AS AUD/JPY, CAD/JPY EXTEND RALLY

• Japanese Yen has weakened broadly excluding its US Greenback peer
• USD/JPY value motion appears to be like primed to proceed dealing with downward stress
• AUD/JPY has superior to recent yearly highs and CAD/JPY might catch up

JPY value motion has largely traded on its again foot for the previous couple of months. Weak point throughout the Japanese Yen has broadly stemmed from its posturing as a prime safe-haven forex. Demand for safe-haven currencies just like the Yen has dissipated with market sentiment and dealer danger urge for food flourishing. The Yen has strengthened significantly in opposition to its US Greenback peer, nevertheless, as spot USD/JPY edges towards its lowest month-to-month shut since October 2016.

USD/JPY PRICE CHART: DAILY TIME FRAME (26 JUN TO 30 DEC 2020)

USD/JPY value motion might proceed to face promoting stress headed into the brand new 12 months as US Greenback bears strongarm the main forex pair decrease. The Greenback-Yen would possibly look towards the 102.50-price degree, which is underpinned by the March swing lows, as a possible space of technical help. The underside Bollinger Band and month-to-date lows across the 103.00-handle appears to have supplied a little bit of buoyancy to this point, however the negatively-sloped 20-day easy transferring common appears to be like to be a extra dominant headwind. A bearish crossover on the MACD indicator additionally means that downward momentum is accelerating.

AUD/JPY PRICE CHART: DAILY TIME FRAME (04 SEP TO 30 DEC 2020)

AUD/JPY value motion has superior steadily because the early November swing low. The Aussie-Yen trades over 600-pips increased since then and is on tempo to shut 2020 at a year-to-date excessive. Though the relative power index suggests AUD/JPY has entered ‘overbought’ territory, the bullish development seems firmly intact. If volatility continues to bleed decrease and sentiment stays upbeat, spot AUD/JPY might prolong towards the 80.500-price degree underscored by the April 2019 swing excessive. Then again, a return of danger aversion, which might doubtless correspond with a pullback throughout main inventory indices, the Japanese Yen might catch a safe-haven bid and steer AUD/JPY decrease. This situation might carry the 50-day easy transferring common into focus as a possible space of technical help.

CAD/JPY PRICE CHART: WEEKLY TIME FRAME (AUG 2018 30 DEC 2020)

CAD/JPY value motion has additionally gained floor largely owing to the theme of power throughout commodity currencies and weak spot throughout safe-havens. This ‘reflation commerce’ appears to be like more likely to proceed into the brand new 12 months with stimulus and vaccine developments maintaining markets optimistic. CAD/JPY has confronted technical resistance across the 82.000-handle, however an ascending triangle sample appears to be like to have fashioned from a collection of upper lows since March. As upward stress builds, a breakout above this degree might inspire bulls to propel CAD/JPY towards the 84.500-price degree close to 2019 and year-to-date highs. The path of crude oil costs would possibly function a possible bellwether as to the place CAD/JPY heads subsequent contemplating the robust optimistic correlation between the Canadian Greenback and crude oil.

— Written by Wealthy Dvorak, Analyst for DailyFX.com

Join with @RichDvorakFX on Twitter for real-time market perception