Comprehensive USD/JPY for November 14, 2023

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USD/JPY for 14th November 2023. 

Key Takeaways 

• The widening interest rate gap is the fundamental factor: On October 31, the Bank of Japan further relaxed its control on government bond yields, while the Federal Reserve still has the possibility of raising interest rates. The policy interest rate gap between the two continues to widen, causing the Japanese yen to fall into a continued depreciation trend. 
• Carry trade is a booster: The interest rate differential between the two countries and the recent continued low volatility of the yen also encourage carry trade. It is a strategy of selling low-interest Japanese yen funds in exchange for high-yielding currencies. This is a contributing factor that keeps the yen under pressure. 
• The Japanese yen unexpectedly surged: The Japanese yen unexpectedly surged during the U.S. trading session yesterday, which once made the market think that the Bank of Japan had intervened. However, according to the current news, it may be an appreciation fluctuation caused by the adjustment of Japanese yen options positions. Previously, when asked whether he was prepared to intervene in the foreign exchange market or take other measures to curb the yen’s decline, Japan’s top monetary official Masato Kanda said that the authorities “are on standby.” 
• Frightened Japanese Yen: If the U.S. economic data released this week is good, the Fed’s suspense about raising interest rates will remain. This could push USD/JPY towards the 152 range. However, the continued depreciation of the yen will make the market continue to be wary of the intervention of the Bank of Japan. Once there are signs of appreciation of the yen, the withdrawal of profit-making positions and traders preparing to go long yen on the sidelines will cause the dollar to experience a rapid downward trend against the yen. 

USD/JPY Technical Analysis

USD/JPY Weekly Chart Insights

• Stochastic Oscillator: The indicator has already showed a short signal in early October, but the current market price and the indicator continue to deviate. This implies that the current upward trend is very fragile. Even if it breaks through the high point of October last year again, it cannot be judged as bullish.
• 5-week moving average: Since August this year, the overall upward trend of the US dollar against the yen has always been supported by the 5-week moving average. If the 5-week moving average cannot support the overall upward trend, the market’s downward trend could be established.

USD/JPY 1-hour Chart Analysis

• ATR combination indicator: The volatility suddenly rose yesterday, but it still did not break through the average volatility of the past 200 hours. This implies that yesterday’s rapid decline was not an effective breakthrough, and there is still a possibility that the market will continue to rise.
• Neckline: The rapid decline in the market fell below the neckline support level, and then the market price slowly rose. It is now back to test the neckline price. If it continues to rise, the top structure will be effective, and the market will continue to hit highs.

Ultima Markets MT4 Pivot Indicator

• According to the pivot indicator in Ultima Markets MT4, the central price of the day is established at 151.607,
• Bullish Scenario: Bullish sentiment prevails above 151.607, first target 152.017, second target 152.321;
• Bearish Outlook: In a bearish scenario below 151.607, first target 151.307, second target 150.900.

Conclusion