USD/JPY ANALYSIS
USD/JPY FUNDAMENTAL BACKDROP
The Japanese Yen has sustained its depreciation in opposition to the U.S. Greenback after yesterday’s U.S. treasury yield rally – as increased bond yields usually lend itself to a stronger buck. In the present day exhibits a marginal slowing in yields which might see a slight pullback amongst USD crosses.
Later at the moment, Fed Chair Powell will make an deal with outlining the dangers related to the current spike in long-term borrowing prices. Increased U.S. borrowing prices are drastically amplified (negatively) by safe-haven belongings such because the Yen (see chart under). Powell’s response to rising treasury yields will probably be fascinating to see as markets await additional transparency.
U.S. BENCHMARK 10Y TREASURY YIELDS VS USD/JPY
Chart ready by Warren Venketas, Refinitiv
USD/JPY ECONOMIC CALENDAR
After Fed Chair Powell’s speech tonight (1705GMT) on the Wall Road Journal convention, the main focus will shift to tomorrows NFP information (see calendar under) which is probably going to supply some volatility pre and submit announcement, notably if precise figures markedly deviate from estimates.
Supply: DailyFX Financial Calendar
Really helpful by Warren Venketas
Buying and selling Foreign exchange Information: The Technique
USD/JPY OPTIONS
Notable choices expiries (see under) on USD/JPY at the moment at 1500GMT are additionally anticipated which might see a battle between stakeholders of the respective strikes. Usually, massive choices expiries are preceded by worth strikes towards the actual strike because it approaches expiration as buyers push for his or her choices contracts to run out within the cash.
March 4, 2021:
- 106.30 – 106.50 (1BLN)
- 106.90 – 107.00 (535M)
Supply: Refinitiv
USD/JPY TECHNICAL ANALYSIS
Really helpful by Warren Venketas
Get Your Free JPY Forecast
USD/JPY Every day Chart:
Chart ready by Warren Venketas, IG
A powerful week for USD/JPY bulls as worth motion offered a push above the important thing 107.00 psychological resistance degree and the August 2020 swing excessive (107.05) – now help.
The bullish channel (yellow) has been breached at topside resistance which may very well be short-lived as bond yields rescind. The Relative Power Index (RSI) exhibits a discount in upside momentum whereas the USD/JPY spot worth continues to push increased. This phenomenon is named divergence and extra particularly ‘bearish divergence’. Bearish divergence suggests {that a} doable worth reversal might ensue nonetheless, the time horizon when judging divergence can lack readability.
Additional upside could also be capped at resistance supplied by the July 2020 swing excessive at 107.54or an resultant lengthy higher wick candle (each day) formation at market shut at the moment. Ought to worth rejection happen the 107.05 help degree will reclaim short-term resistance.
From the bearish perspective, help targets will come from 107.05 adopted by the 106.23 swing excessive.
Key technical factors to contemplate:
- USD/JPY: 107.05 help, 107.54 resistance
- RSI bearish divergence
Begins in:
Dwell now:
Mar 16
( 17:03 GMT )
Maintain updated with worth motion setups!
Buying and selling Value Motion
IG CLIENT SENTIMENT FAVORS BULLS
| Change in | Longs | Shorts | OI |
| Every day | -10% | -12% | -11% |
| Weekly | -22% | 33% | 1% |
IGCS exhibits retail merchants are at present web lengthy on USD/JPY, with 45% of merchants at present holding lengthy positions (as of this writing). Merchants are additional net-short than yesterday and final week, and the mixture of present sentiment and up to date modifications provides us a stronger USD/JPY-bullish contrarian buying and selling bias.
— Written by Warren Venketas for DailyFX.com
Contact and comply with Warren on Twitter: @WVenketas
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