Market Analysis: USD/JPY stabilises and holds above 111.00 – downside potential limited?

March 13, 2019 09:30

Source: Economic Events March 13, 2019 - Admiral Markets' Forex Calendar

After last Friday's wear NFP reading, the USD/JPY saw a short push below 111.00. Over the last few days it has stabilised, but due to low volatility in equities, it seems as if the potential on the downside for the USD/JPY is limited.

Technically speaking, another attack on the region around 112.00 remains an option as long as we trade above last Friday's lows of around 110.80. Above 112.00, further gains up to 112.30/50 become likely, particularly if such an upwards push would not only be driven by JPY weakness, but also the pullback in 10-year US Treasury yields above 270 basis points.

On the other hand, in the current market environment, one should carefully watch any comments from the Trump administration regarding the current strength in the US dollar (note: the USD index future is currently eyeing a key resistance zone around 97.50/80 points, where a break higher would match the highest readings since April/May 2017).

That said, every push below 110.80 activates the region around 110.30 as a first target on the downside.

Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY H4 chart (between December 12, 2018, to March 12, 2019). Accessed: March 12, 2019, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of USD/JPY increased by 13.7%, in 2015, it increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, meaning that after five years, it was up by 4.1%.

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