In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDJPY for 31st January 2024.
Key Takeaways
- Negative interest rate policy: The minutes of the Bank of Japan showed that policymakers are preparing to exit negative interest rates in the short term. Members actively discussed the conditions for phasing out stimulus measures and agreed to discuss in depth the appropriate pace of future interest rate increases.
- Economic recovery: Japan’s industrial production increased by 1.8% in December, the largest increase since June last year. This proves to a certain extent that the Japanese economy has resumed growth, which may clear the way for the Bank of Japan, considering the timing of raising interest rates.
Technical Analysis
Daily Chart Insights
- Stochastic Oscillator: The indicator illustrates a short signal after entering the overbought area. In addition, its downward curvature suggests that the current downward trend is more likely to be a correction. It is not advisable to go long before the indicator is completely out of the overbought area.
- Potential support level: The pair began to fluctuate after rising above the 65-day moving average, and the correction was supported by the 65-day moving average. The red 33-day moving average is still below the 65-day moving average, so be wary that the pair may continue to adjust downward after falling below the 65-day moving average, with the target being the 38.2% Fibonacci retracement level.
4-hour Chart Analysis
- Converging triangle: The pair forms a converging triangle pattern at a high level, which implies that the long and short positions are in the game stage. It is advisable to wait for further prominent signal to gauge its trading opportunities.
- Platform correction: If the exchange rate falls below the convergence triangle, the exchange rate will most likely form the ABC platform correction in Elliott Wave Theory. It is currently in the falling C wave. Looking below is the proportional height of the A wave, which is also the lower edge of the downward channel line at 146.186.
Pivot Indicator
- According to the trading central in Ultima Markets APP, the central price of the day is established at 147.90,
- Bullish Scenario: Bullish sentiment prevails above 147.90, first target 148.10, second target 148.30;
- Bearish Outlook: In a bearish scenario below 147.90, first target 147.15, second target 146.90.
Conclusion
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Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.
