Analysis and forecast for USD/JPY on June 18, 2020
June 18, 2020 11:21 am
Hello!
Today’s review of the USD/JPY currency pair will start with the topic COVID-19. As you know, an outbreak of a new type of coronavirus has been detected again in neighboring China. This time in Beijing. About a thousand domestic flights were canceled in the capital of China. In addition, the Chinese leadership immediately suspended school classes, banned mass events, as well as visits to gyms and swimming pools. Mass testing of residents of the southern part of Beijing for coronavirus is being conducted. Let me remind you that a new outbreak was discovered in one of the capital’s markets, which was immediately closed. Residents of nearby areas are not allowed to leave their homes, and others are not recommended to leave the city unless absolutely necessary. The source of the new infection has not yet been determined, although it is assumed that the virus was imported from Europe.
And in Japan, there is a gradual lifting of restrictive measures, but with great caution. Nevertheless, there are already quite a large number of people on the streets, but everyone is taking the necessary precautions. The Japanese, as we know, are very disciplined people.
Turning to macroeconomic events, on Tuesday, the Japanese Central Bank issued its decision on the main interest rate, which remained unchanged, at minus 0.10%. This decision coincided with the expectations of market participants.
Weekly
If we go to the technical picture of the dollar/yen currency pair, then, despite the second part of the current week, I will start with the results of the previous one. In the past week’s trading, the pair showed a significant decline, during which 144 exponential moving average and 89 exponential were broken. After that, the pair entered the cloud of the Ichimoku indicator and exited it, ending trading at 107.38. Good support was provided by the Kijun line, from which there was a strong rebound.
At this week’s trading, the downward dynamics continue, however, it is not as strong as a week earlier. Once again, the quote is supported by the Kijun line. I dare to assume that if the current weekly trading closes below Kijun, the pressure on the pair will increase and the downward dynamics will continue, and with even greater force. Even more convincing in the bearish prospects of the pair is the breakdown of the strong support level of 106.54, after which one of the key levels of 106.00 will be under the sellers’ sights.
To resume bullish sentiment, it is necessary to close weekly trades not just within the Ichimoku cloud, but also above 50 of the simple moving average. Then you need to bring the price up from the cloud and test again for a breakout of 89 EMA and 144 EMA. We must admit that the task is not easy. Far from easy. Judging by the weekly scale, I assume the continuation of the downward scenario.
Trading recommendations for USD/JPY:
The main trading idea is to sell after rising to the levels of 107.20, 107.35 and 107.60. You can try to sell more aggressively and riskily on attempts to return above the significant mark of 107.00.
For those who want to buy USD/JPY, I recommend looking for signals to open long positions after declines in the price zone of 106.80-106.70. Signals should be in the form of bullish models of Japanese candles on 4-hour or hourly timeframes.
Good luck!
The material has been provided by InstaForex Company – www.instaforex.com
Hello!
Today’s review of the USD/JPY currency pair will start with the topic COVID-19. As you know, an outbreak of a new type of coronavirus has been detected again in neighboring China. This time in Beijing. About a thousand domestic flights were canceled in the capital of China. In addition, the Chinese leadership immediately suspended school classes, banned mass events, as well as visits to gyms and swimming pools. Mass testing of residents of the southern part of Beijing for coronavirus is being conducted. Let me remind you that a new outbreak was discovered in one of the capital’s markets, which was immediately closed. Residents of nearby areas are not allowed to leave their homes, and others are not recommended to leave the city unless absolutely necessary. The source of the new infection has not yet been determined, although it is assumed that the virus was imported from Europe.
And in Japan, there is a gradual lifting of restrictive measures, but with great caution. Nevertheless, there are already quite a large number of people on the streets, but everyone is taking the necessary precautions. The Japanese, as we know, are very disciplined people.
Turning to macroeconomic events, on Tuesday, the Japanese Central Bank issued its decision on the main interest rate, which remained unchanged, at minus 0.10%. This decision coincided with the expectations of market participants.
Weekly
If we go to the technical picture of the dollar/yen currency pair, then, despite the second part of the current week, I will start with the results of the previous one. In the past week’s trading, the pair showed a significant decline, during which 144 exponential moving average and 89 exponential were broken. After that, the pair entered the cloud of the Ichimoku indicator and exited it, ending trading at 107.38. Good support was provided by the Kijun line, from which there was a strong rebound.
At this week’s trading, the downward dynamics continue, however, it is not as strong as a week earlier. Once again, the quote is supported by the Kijun line. I dare to assume that if the current weekly trading closes below Kijun, the pressure on the pair will increase and the downward dynamics will continue, and with even greater force. Even more convincing in the bearish prospects of the pair is the breakdown of the strong support level of 106.54, after which one of the key levels of 106.00 will be under the sellers’ sights.
To resume bullish sentiment, it is necessary to close weekly trades not just within the Ichimoku cloud, but also above 50 of the simple moving average. Then you need to bring the price up from the cloud and test again for a breakout of 89 EMA and 144 EMA. We must admit that the task is not easy. Far from easy. Judging by the weekly scale, I assume the continuation of the downward scenario.
Trading recommendations for USD/JPY:
The main trading idea is to sell after rising to the levels of 107.20, 107.35 and 107.60. You can try to sell more aggressively and riskily on attempts to return above the significant mark of 107.00.
For those who want to buy USD/JPY, I recommend looking for signals to open long positions after declines in the price zone of 106.80-106.70. Signals should be in the form of bullish models of Japanese candles on 4-hour or hourly timeframes.
Good luck!
The material has been provided by InstaForex Company – www.instaforex.com
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