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While traders may be correct the USD/JPY is going to establish a lower move, they should also acknowledge knowing when this new trend is going to suddenly emerge is an obstacle.
As of this writing the USD/JPY is trading near the 149.000 ratio and day traders who believe they have enough experience to venture pursuit within the currency pair are likely asking many questions. Yes, the USD/JPY touched the 150.175 ratio on Tuesday. This high which is re-challenging October 2022 marks is causing nervousness for speculators, financial institutions, and most importantly Bank of Japan officials.
After hitting a high around the 150.175 ratio on Tuesday, the Bank of Japan said it would begin buying Japanese bonds as a form of intervention and said it is open to other actions. The USD/JPY abruptly dropped in price and within moments suddenly was trading near the 147.325 level. However, the swift nature of the price velocity in the USD/JPY then began to reverse quickly higher and the 149.000 level was found. The USD/JPY has essentially traded sideways since this minor manipulation by the Bank of Japan. However, speculators should remain suspicious other actions from the BoJ can be initiated without any notice.
- Tomorrow the U.S. will release its Non-Farm Employment Change and Average Hourly Earnings data.
- The jobs numbers and inflation statistics reports from the U.S. will cause additional volatility in the broad Forex market.
- The USD has been stronger than most other major currencies, including the JPY.
The 149.000 level in the USD/JPY should be watched in the near term as traders’ position for tomorrow’s jobs numbers from the U.S, but they should also keep in mind the prospect the BoJ will be watching too and could act if they worry that the 150.000 ratio is going to be challenged again. Last year on the 17th of October 2022, the USD/JPY briefly tested the 152.000 ratio. Traders who believe the USD/JPY is overbought and an immediate sustained downturn is going to occur should be extremely cautious.
Traders with access to long-term charts should look at the USD/JPY. They will see the 150.000 level has been a place of action for the currency pair over the past twenty years. In 1998 the USD/JPY also touched the 150.000 level and then began to proceed lower.
While traders may be correct the USD/JPY is going to establish a lower move, they should also acknowledge knowing when this new trend is going to suddenly emerge is an obstacle. Traders should also note that in 1990, yes 33 years ago, the USD/JPY did trade near the 161.000 ratio. The next two days for the USD/JPY are going to be interesting and speculators should be prepared for rapid price velocity to potentially occur.
Current Resistance: 149.200
Current Support: 148.890
High Target: 149.850
Low Target: 147.990
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