Japanese Yen Technical Outlook Early Oct 2018

Japanese Yen Currency

Japanese Yen still sinking, yet the rate shows sign of exhaustion

The USD/JPY pair is still trading well over 113.50 and it is at the year’s peak as well. Although the fundamental picture is still favoring the USD, GBP and EUR against JPY, the rate of fall has shown significant level of exhaustion. Besides, the fall has been halted at the 113.70 region for USD/JPY, 131.20 region for EUR/JPY and 148.10 region for GBP/JPY. While comparing Japanese yen with USD, the FED is hiking the rate regularly, while the BoJ leaves its monetary taps wide open. According to Bank of Japan policy, no rate decision will be provided until the consumer price inflation reaches 2%, and it is still a long way to go as the consumer price inflation currently resides at 1.3%.

At this moment, the short-term base rate of Japan remains at -0.1%, where the Fed’s target rate resides at 2-2.5%. Besides, EUR is gaining quickly as there is significant improvement in the political turmoil of Italy and Italy has agreed to cut down the budget deficit. However, local political leaders were not happy about it, as the decision was made by the influence of European Union. GBP is gaining rapidly as well, as the Brexit deal is more likely to happen and it is turning the fortune wheel of GBP as well. In the last 120 minutes, we have observed 30 pips upward momentum from the GBP, it is residing well over 1.3010 at this moment. The EUR/JPY was looking forward to break above 132.50, yet it failed to continue the momentum and it is residing at 131.92 at this moment. GBP/JPY was expected to break above 150.10 region, yet it has shown significant exhaustion around 148.35 and it is residing at 148.08 at this moment.

  • USD/JPY remains on the peak of this year, yet the pair seems to be overdoing and a pause is due
  • The rise was abrupt and a break downward seems likely to happen
  • EUR/JPY appears to remain aggressive and still trying to break above 132.10 region.
  • GBP/JPY seems to be rather defensive, as it fails to touch the 150 zone, key resistance at 148.68 region.

USD/JPY daily chart

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USD JPY daily chart 03-10-2018

EUR/JPY daily chart

EUR JPY Daily Chart 03-10-2018

To the bottom lines

Considering the monetary policy of Bank of Japan, we did not find too much things to talk about in favor of JPY and the fall of JPY against USD, GBP and EUR is more likely to be continued. The recent exhaustion was happened, because the progression was too rapid and a halt was due as well. At this moment, we are expecting the GBP, EUR and USD to break above 150.10, 132.20 & 114.50 region in a recent future. Although there is a pause in the progression, there is nothing really to back JPY up in near future.

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Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.


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