Online Forex broker
2019-11-11 • Updated
The Japanese yen gained on Wednesday and Thursday against the US Dollar on the comments from the Federal Reserve Chairman Jerome Powell. He said about pausing the path of lifting interest rates after the widely expected rate hike in December. As a result, USD/JPY slipped below 113.5. However, the overall picture for the pair remains positive, as the uptrend which has lasted since March 2018 continues.
One of the reasons for it lies in fears of the Bank of Japan. The BOJ governor warned that the bank was not going to change its ultra-loose monetary policy any time soon amid the growing risks to the global economy resulting from the US-China trade war. This matter can reduce the interest to the Japanese currency.
Analysts also remember the influence of the market sentiment on the USD/JPY, as both of the currencies are considered safe-havens during the time of uncertainties. The recent panic in the equity market showed the USD as a more attractive safe-haven currency for investors. The reason for it lies, again, in the world trade uncertainties, political tensions in Europe and slowing down of the Chinese economy.
That is why the direction of the JPY heavily depends on the macro situation and further steps by the central banks of the countries.
Major Banks see the Japanese yen to continue strengthening. They expect USD/JPY trading solidly below 100 by 2020, reaching the levels of 2013. Others take into account the Fed’s recent dovish tone and push the pair even reaching the 96 level by the end of 2020.
However, let’s look at the middle-term picture for USD/JPY.
On the weekly chart, parabolic SAR shows that the uptrend resumes. The pair is trading above the 200-week MA during the current week. The strong USD can push USD/JPY towards the resistance at 14.730 and, therefore, increase the chances of the reversal. If the Federal Reserve sticks to its dovish tone in the upcoming months, it will make the USD weaker and pull it down to the support at 111.4 (50-months MA). If bears manage to break this level, the next support for USD/JPY is situated at 109.760.
Conclusion
The recent dovish comments of the Federal Reserve are important for predicting the price of the JPY. However, it is also important to take into account political uncertainties such as Brexit and Italian debt problem, world trade tensions and the possible end of the quantitative easing policy by the Bank of Japan.
Last Friday’s NFP was disappointing. The reaction of the markets was astonishing. Will it last longer? Let's find out the main trade opportunities for the upcoming week.
After multiple hawkish remarks over the past few days from non-voters members, the Federal Reserve chairman Powell surprised the markets with some dovish remarks…
Institutional investors speak about further growth in the stock market. In the exact market that has doubled since COVID-19 and doesn’t plan to stop. Is it possible?
The stock market has reversed, and now it’s going lower and lower…
Walmart is one of the biggest retail corporations in the US, with $244 billion in total assets. Does it worth buying amid rising prices and supply concerns that shatter the world economy?
Japan's inflation is set to reach 2% in April's reading, for the first time since 2015. But what about the weaker Yen?!
FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.
Your request is accepted.
A manager will call you shortly.
Next callback request for this phone number
will be available in
If you have an urgent issue please contact us via
Live chat
Internal error. Please try again later
Don’t waste your time – keep track of how NFP affects the US dollar and profit!
Beginner Forex book will guide you through the world of trading.
We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.
|
