In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDJPY for 26th April 2024.
Key Takeaways
- BoJ interest rate decision: The market predicts that the Bank of Japan will hold steady on Friday, and the recent sharp depreciation of the yen makes it more likely that the Bank of Japan will downplay its stance of maintaining an accommodative policy.
- Pressure to raise interest rates: Strong wage growth resulting from negotiations between Japanese companies and labor unions this year has increased pressure on the Bank of Japan to raise interest rates. After implementing a historic rate hike last month, the Bank of Japan may still raise interest rates three more times this year, and the rate hike may exceed market expectations.
Technical Analysis
Weekly Chart Insights
- MACD: In early February, the macd energy column once again uploaded a red slow line above the 0 axis. In theory, this is a strong bull signal. However, judging from the trend of the energy column since last year, although the recent depreciation of the yen has exceeded the historical price, the fluctuation range is attenuating. Be wary of the exchange rate showing a top divergence pattern after hitting the resistance level.
- Potential target level: The current USD/JPY is close to 155.674, which is the 61.8% Fibonacci extension of the upward trend since last year. In line with today’s fundamental information, there is the possibility of a short-term adjustment in the exchange rate. But if it continues to break above, it will look towards the 61.8% expansion level of the upward trend since 2020, which is also the upper edge of the green upward channel line.
1-hour Chart Analysis
- Stochastic oscillator: Recent adjustments of the indicator have stopped at the 50 midline. Therefore, whether the short signal during today’s Asian session can clearly indicate the start of a downward trend requires attention to whether the indicator can fall below the midline.
- Support price: The exchange rate is in correction at a high level, and no clear top pattern has emerged. The price of downward adjustment is always supported by the red 33 moving average and the green trend line. If it falls below the support, an M-top pattern can be established, and only then can we focus on short-term selling opportunities for the US dollar against the Japanese yen.
Pivot Indicator
- According to the trading central in Ultima Markets APP, the central price of the day is established at 1.3690,
- Bullish Scenario: Bullish sentiment prevails above 1.3690, first target 1.3715, second target 1.3740;
- Bearish Outlook: In a bearish scenario below 1.3690, first target 1.3645, second target 1.3625.
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.
