(MENAFN- Daily Forex) Advertisement The yen is a popular asset during turbulent times.trade usd/jpy now! Bearish view
Sell the usd/jpy pair and set a take-profit at 128.50. Add a stop-loss at 132. Timeline: 1-2 days.
Bullish view Set a buy-stop at 131.35 and a take-profit at 134. Add a stop-loss at 129.50.
The Japanese yen drifted downwards against the US dollar on Tuesday morning as the market embraced a risk-on sentiment. The USD/JPY exchange rate rose to a high of 130.58, which was significantly higher than last week's low of 128.Risk-on sentiment
Investors have embraced a risk-on sentiment as the US dollar index (DXY) has plunged to $102 from last year's high of $115. Stocks have rallied, with the Dow Jones adding over 300 points on Monday. Bitcoin has risen above $23,000, the highest level in more than five months.
The main reason for this price action is that the market believes that the Federal Reserve will have to start pivoting its monetary policy soon. This pivot could see the bank hike rates by 0.50% in its upcoming meeting followed by another 0.25%.
It will then pause hiking rates as it assesses the state of the economy. Some analysts, such as those from ING, expect that the Fed will start cutting rates in the fourth quarter of the year.
The Bank of Japan (BoJ), on the other hand, decided to leave interest rates unchanged in its meeting last week. It left rates at minus 0.10% and its yield curve control intact. Through the yield curve policy, the BoJ is ensuring that the 10-year bond yield remains close to 0.50%. It is spending billions of dollars per week to ensure that yields remain at that.
There will be no important economic data from the US on Tuesday. The only notable one will be the flash manufacturing and services numbers. While important, these numbers rarely move the US dollar and other assets. The key data to watch this week will be the US GDP numbers scheduled for Thursday and PCE set for Friday. This being the first GDP estimate for the fourth quarter, it could lead to some volatility.USD/JPY analysis
The USD/JPY price has been in an overall bearish trend after it soared to a multi-decade high in 2022. It has formed a descending regression channel and is now approaching its upper side. The MACD has moved above the neutral point while the histogram is in the green area. The pair has moved above the 25-day moving average .
Therefore, with the pair approaching the upper side of the channel, there are two potential scenarios. The first one is where it retreats as sellers aim for the lower side. On the other hand, the pair could break above this channel, bringing the resistance at 134.67 to view.
Ready to trade our free trading signals ? We've made a list of the best forex brokers worth trading with.
MENAFN24012023000131011023ID1105471641
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.