MO USDJPY 12.03.2018
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MO USDJPY 12.03.2018

Long Term Overview:

Economic Analysis

JPY Prelim GDP QoQ figure came in unchanged from forecast, as a result seeing a decrease from the previous figure – giving off negative sentiment in the JPY. The United States and Canadian government have forged a new trade agreement to replace NAFTA, preserving President Trump’s ability to impose a 25 percent global tariffs on auto parts from Canada and Mexico – The USMCA trade deal is set to strengthen the dollar in the mid – long term, as a result of a combination of lower market uncertainty and stabilisation of the continents long standing trading relationships.


Strength in the Dollar is forecast to see a further growth after the Federal Reserve’s FOMC Chairman Powell stated that Interest Rates “are not quite at normalisation”. implied once again that FOMC Interest Rate policy is likely to remain relatively hawkish, after FOMC Powel turning Dovish in the most resent Interest Rate Decision; preventing excessive inflation in a firming economic environment. Interest rate normalisation is expected to be in the region of 2.50% to 3.50% which may reinforce overall positivity in the greenback.

Long Term Analysis

Price in the USDJPY has consolidated sideways on top of the EMAs from the beginning of 2016. Since then, price has pullback into the EMAs, with Major EMAs below price, while crossing green over red on the Monthly MacD Indicator. Bias is Long on the Monthly and 2 Month Charts and due future forecast strength in the Dollar, the Buyers may rally price further to the upside and to previous highs nearing the 118.60 area in the next couple of months.

Decision Point: Push and close above previous highs nearing the 113.75 area

Long Term Trend: Mixed

Channel Range: N/A

Possible Bias: Long

Medium Term Analysis

Bias for the USDJPY is Long on the Weekly charts presented. Price has pushed above previous highs before retreating and forming a bullish Spinning Top weekly candlestick – suggesting some indecision around this area. Because of this, price may pullback deeper into the respected 21EMA before seeing a further push from the Buyers to the upside. USDJPY may approach previous highs around the 115.50 area in the next couple of weeks.

Decision Point: Pullback into Weekly 21EMA nearing the 111.515 area

Long Term Trend: Long

Channel Range: N/A

Possible Bias: Long