The USD/JPY has been able to sustain its lower mid-term price range after more bearish momentum produced strong selling last week.
The USD/JPY is near the 138.550 mark as of this writing with its typical fast price action on full display. Since trading near a high around 141.550 on Wednesday of last week, the USD/JPY has reignited its bearish trend which began technically after reaching a high of nearly 151.800 on the 21st of October. The road lower for the USD/JPY has not been easy or gentle as it has exhibited definite reversals on occasion, but speculators who pursued lower values may have been rewarded with profits.
After the U.S Federal Reserve issued its Meeting Minutes report this past Wednesday the USD/JPY has certainly traded lower. Acknowledgement for a desire to lessen the aggressive interest rate hike policy within the U.S central bank likely confirmed what many financial institutions had started to believe was true. Hawkish interest rate policy in the U.S is likely within its last gasps.
However Doubt Remains Present and Markets Nervous Regarding Fed Policy
Before speculators dive into selling positions of the USD/JPY however, they should know that some U.S Fed members remain adamant the U.S central bank should remain hawkish. Rhetoric yesterday from Jim Bullard of the St. Louis Federal Reserve Bank rattled equity markets when he said he believes interest rates need to remain high in the U.S to confront inflation.
Speculators of the USD/JPY now Playing a Game of Who Do You Believe
- The 140.000 level in the USD/JPY may remain significant psychologically, it this value can be maintained as resistance it may be a solid selling indicator.
- Yesterday’s low to the 137.550 mark approximately tested values in the USD/JPY not seen since late August.
- Support around the 138.000 could prove vital; if it becomes vulnerable sellers may target the 137.700 mark as a goal for short-term wagers downward.
Behavioral sentiment within the USD/JPY mirrors the broad Forex market, and as a major currency pair is also a leading indicator regarding perception within the financial world. While some U.S Fed members may be ‘talking up’ interest rates and inflation, many financial houses seem to believe they have a better outlook than their counterparts in ‘ivory towers’ who sometimes do not have their feet on the ground of the business world.
If the USD/JPY remains under present resistance levels this may ignite more selling sentiment for the currency pair. Selling the USD/JPY after slight reversals higher, which seek quick-hitting profits using take-profit orders may prove a worthwhile wager for speculators who believe the mindset of financial houses remain bearish.
USD/JPY Short-Term Outlook:
Current Resistance: 139.250
Current Support: 138.200
High Target: 140.100
Low Target: 136.420
Ready to trade our daily Forex forecast? Here’s a list of some of the best Forex brokers to check out.