USD/JPY

Fundamental View

USD/JPY broke 112 last week, hitting a 1 month high the only times that we see simultaneous strength in pairs like USD/JPY. Stocks pulled back at the start of the week but rebounded strongly on Friday to end the week not far from 6-month highs.

There’s been a lot of talk about recessions, trade tensions between the EU and US are escalating and there’s still no final resolution to US-China trade talks or Brexit.

Last week US CPI and PPI rose sharply, FOMC statement was less hawkish. Saudi Aramco oil company (world’s most profitable company) joined in us bond market. As a result bond goes up and JPY get weaker against all pairs.

Next week next 18th of April USD’s Core Retail Sales m/m and Retail Sales are scheduled. Both market mover data are expecting better than last report. Core Retail Sales m/m previous was -0.4% and forecast 0.7%, Retail Sales previous was -0.2% and forecast 0.9%.

Fundamentally USD is stronger than JPY in short term. So there are more rooms to go up USD/JPY fundamentally. But in the long term fundamental picture is difference. Trade tensions between the EU and US are escalating and there’s still no final resolution to US-China trade talks or Brexit. None has been solved yet.

As a safe haven JPY’s demand can increase anytime. So short term buy USD/JPY is ok, but for long term we need to consider Trade tensions between the EU and US, US-China trade talks or Brexit.

Technical View

Now the question now is whether trend has completely shifted for USD/JPY making 114 more likely to be hit before 110. 

In the daily chart USDJPY Broke 200 SMA. But in the weekly chart USDJPY stuck in 200 SMA. And negative trend line resistance near to 112.30/60 area. Technically market has good chance to go for some minor correction near to 111.50 area. Than go up again.  

LEAVE A REPLY

Please enter your comment!
Please enter your name here