USD/JPY Technical Analysis: Alignment of Forces Keeps Yen Weak

USD/JPY Rate Forecast Talking Points:

  • The ONE Thing: Despite showing overbought on momentum indicators, USD/JPY may continue pushing higher as JPY weakness remains supported on multiple fronts.
  • Seasonal studies show JPY weakness remains the preferred FX play in Q4. Over the last ten years, traders who were short USD/JPY often ended the year with a sour taste in their mouth. More precicely, when inflation concerns arose (as they are now), USD/JPY saw significant jumps in the rate, most notably in 2014 and 2016.
  • Technical Analysis of the Japanese Yen: USD/JPY holds a bullish structure north of 112.37, which is the 21-Day moving average. Lack of haven demand and widespread US Dollar strength and falling haven demand as evidenced by higher yields and higher equities on falling implied volatility that seem also to support a weakening JPY.

KEY TECHNICAL LEVELS FOR JAPANESE YEN RATE TO US DOLLAR:

  • Overall Bias: 11-month high favors pull-back risk, seen as opportunity to add risk
  • Resistance: ¥114.73, November 6 intraday high
  • Spot: ¥114.35 per USD
  • Support: 112.37, 21-Day Moving Average

USD/JPY is trading at 11-month

Article source: https://www.dailyfx.com/forex/technical/home/analysis/usd-jpy/2018/10/03/US-Dollar-Japanese-Yen-Technical-Analysis-Nikkei-Rates-Intermarket-Analysis.html