The USD/JPY has traded lower and has not suffered a strong reversal higher as it shows the potential to create a new speculative trend.
The USD/JPY has a long history of creating what can be described as sincere trends in value. This however does little good for day traders who often don’t have deep enough pockets to linger in trades for more than a handful of hours sometimes. The USD/JPY was trading near a value of 146.600 on Thursday the 10th of November. As of this writing the USD/JPY is now near the 140.300 ratio with full price action being demonstrated.
Friday November 11th’s USD/JPY Low was Approximately 138.480
After better-than-expected inflation data from the U.S last week, the USD/JPY was able to spike downwards with solid price velocity, which likely made some speculators very happy and others quite bewildered. The USD/JPY can be fast, volatile and speculatively dangerous while being pursued via Forex wagers by retail traders. Risk management is essential at all times. Friday’s lows before going into the weekend appeared rather quickly; yesterday’s trading created an incremental small bullish move for the USD/JPY.
The 140.000 Level for the USD/JPY will be a key Psychological Inflection Point for Traders
- Japan released Gross Domestic Product numbers yesterday and they came in worse than expected. A gain of 0.3% was expected, instead a decline of minus -0.3% was the result.
- The ability of the USD/JPY to climb after hitting lows on Friday and climbing yesterday is a natural part of Forex trading.
- What may prove interesting is that the move higher off of the ‘new’ low has not been too violent. The USD/JPY remains clearly within sight of the important 140.000 ratio.
A speculative opportunity awaits traders who like to wager and believe their perception of the USD/JPY is correct. The USD/JPY has endured a very long bullish trend. In early January of 2021 the USD/JPY was trading near the 102.575 value. The currency pair’s move higher has mirrored the broad Forex market as the USD has gotten strong against many other currencies. The question now is if the long term bullish trend is running out of power, it appears that some financial institutions are beginning to position for the USD to weaken.
If a trader believes the USD/JPY is starting to run out of its bullish ‘juice’ and is embarking on a move lower they may want to wager on the scenario starting to develop. It will not be an easy path downwards. Reversals higher are likely to be seen because financial markets remain fragile and global equity indices may be staging a false rally in the short term.
However, traders may be tempted to wait for slight moves higher in the USD/JPY and bet on downturns which target new support levels which are being flirted. If the 140.000 level proves vulnerable, it would not be a surprise to see the 139.000 come into sight in the near –term.
USD/JPY Short-Term Outlook:
Current Resistance: 140.425
Current Support: 140.010
High Target: 141.190
Low Target: 138.100
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