Japanese Yen Q1 Recap
The Japanese Yen has had an fascinating Q1 to say the least with the Yen beginning the quarter trying susceptible towards the Buck. The US Federal Reserve seemed set to proceed on an aggressive climbing cycle whereas the Financial institution of Japan seemed set to proceed down its simple financial coverage path.
February turned out to be a tough month for the Yen because it posted steep losses towards the US Greenback. The losses had been compounded by the rising odds for a better peak fee from the US Federal Reserve as US information got here in higher than anticipated for almost all of February. Late February was the beginning of the Yen’s restoration with March seeing the Banking sector woes speed up the decline in USDJPY because the pair declined some 700-odd pips since February 28.
As we head into Q2 the Yen is principally flat towards the Buck with the early features made in Q1 successfully worn out. The query we’ve to ask is are we going to see a continuation of the Yen’s latest comeback over the approaching months? Whereas this text focuses on the JPY technical outlook, Q2 has a number of key fundamentals that would drive the Yens path – obtain the total Q2 forecast beneath:
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Technical Outlook – USD/JPY
USDJPY Month-to-month Chart
Supply: TradingView, chart ready by Zain Vawda
USDJPY on the weekly timeframe has been on a gradual decline since February 27, with 4 consecutive weeks of losses. Worth is approaching the psychological 130.000 degree (on the time of writing) with the month-to-month candle trying set to shut as bearish engulfing candle. A month-to-month shut beneath the 130.000 deal with ought to result in additional draw back for the pair as we haven’t seen an in depth beneath since breaking above the psychological 130.00 degree in June 2022.
USDJPY Each day Chart
Supply: TradingView, chart ready by Zain Vawda
Worth motion on the every day timeframe has seen us print a recent low with retracement now a risk. Ought to a pullback materialize speedy resistance rests at 132.600 (50-day MA) with a break larger probably resulting in a retest of the 100-day MA across the 134.600 deal with. The YTD excessive simply above 137.000 has held agency to date in 2023 and holds the important thing to maintain the bearish development intact.
On the draw back a break of the psychological degree at 130.00 brings the YTD low of 127.250 again into focus. A candle shut beneath this degree may see a take a look at of assist resting at 125.000 (March 22 swing excessive).
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Written by: Zain Vawda, Markets Author for DailyFX.com
Contact and observe Zain on Twitter:@zvawda
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