Japanese Yen Q1 Recap

The Japanese Yen has had an attention-grabbing Q1 to say the least with the Yen beginning the quarter wanting susceptible towards the Buck. The US Federal Reserve appeared set to proceed on an aggressive mountaineering cycle whereas the Financial institution of Japan appeared set to proceed down its simple financial coverage path.

February turned out to be a troublesome month for the Yen because it posted steep losses towards the US Greenback. The losses had been compounded by the rising odds for the next peak fee from the US Federal Reserve as US information got here in higher than anticipated for almost all of February. Late February was the beginning of the Yen’s restoration with March seeing the Banking sector woes speed up the decline in USDJPY because the pair declined some 700-odd pips since February 28.

As we head into Q2 the Yen is mainly flat towards the Buck with the early positive factors made in Q1 successfully worn out. The query we now have to ask is are we going to see a continuation of the Yen’s current comeback over the approaching months? Whereas this text focuses on the JPY technical outlook, Q2 has a bunch of key fundamentals that would drive the Yens route – obtain the total Q2 forecast under:

Technical Outlook – USD/JPY

USDJPY Month-to-month Chart

Supply: TradingView, chart ready by Zain Vawda

USDJPY on the weekly timeframe has been on a gradual decline since February 27, with 4 consecutive weeks of losses. Value is approaching the psychological 130.000 degree (on the time of writing) with the month-to-month candle wanting set to shut as bearish engulfing candle. A month-to-month shut under the 130.000 deal with ought to result in additional draw back for the pair as we haven’t seen an in depth under since breaking above the psychological 130.00 degree in June 2022.

USDJPY Every day Chart

Supply: TradingView, chart ready by Zain Vawda

Value motion on the every day timeframe has seen us print a contemporary low with retracement now a chance. Ought to a pullback materialize fast resistance rests at 132.600 (50-day MA) with a break greater doubtlessly resulting in a retest of the 100-day MA across the 134.600 deal with. The YTD excessive simply above 137.000 has held agency up to now in 2023 and holds the important thing to maintain the bearish pattern intact.

On the draw back a break of the psychological degree at 130.00 brings the YTD low of 127.250 again into focus. A candle shut under this degree may see a take a look at of assist resting at 125.000 (March 22 swing excessive).

Written by: Zain Vawda, Markets Author for DailyFX.com

Contact and comply with Zain on Twitter:@zvawda