USD/JPY Price Analysis: Downfall Looking at 109.0, Awaiting FOMC
- The USD/JPY could extend its drop if the DXY and JP225 reached new lows.
- Technically, the price moves sideways, so only escaping from this pattern could bring us great trading opportunities.
- Only a valid breakout through the wl1 could signal a new leg higher.
The USD/JPY price analysis drops like a rock as the DXY, and the JP225 are bearish. The USD was weakened by the Dollar Index’s retreat, while the Japanese Yen was boosted by the Nikkei’s sell-off. It remains to see what will happen around the FOMC.
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As you already know, the pair moves sideways, but I really hope that the Federal Reserve monetary policy meeting could bring a clear direction.
The Japanese banks were closed today in observance of Respect-of-the-Aged Day. On Wednesday, the FOMC and the BOJ could be decisive. The fundamentals will move the pair, so you should be careful as anything could happen.
The USD/JPY pair could register sharp movement right after the Bank of Japan Monetary Policy Statement. BOJ is expected to keep its BOJ Policy Rate in the negative territory at -0.10%. Later, on Wednesday, the FOMC could really move the markets as the FOMC Press Conference represents a high-impact event. A hawkish stance may lift the USD, while a dovish FED amid COVID-19 fourth wave could punish the USD.
JP225 (Nikkei) price technical analysis: New lower low
JP225 failed to reach the ascending pitchfork’s upper median line (UML), signaling high selling pressure and exhausted buyers. The index has registered only a false breakdown through the 29,619 former low. Still, the pressure is high. It could drop further anytime. Technically, it could be attracted by the median line (ML) after failing to hit the UML.
USD/JPY price technical analysis: Sell-off to continue
The USD/JPY pair failed to stay above the descending pitchfork’s warning line (wl1), indicating strong selling pressure. Furthermore, its failure to stay above the weekly pivot point of 109.75 signaled that the price could approach and reach the S1 (109.33).
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Technically, the pair is trapped within an extended range. Only escaping from this pattern could bring great trading opportunities. A new lower low, bearish closure below the 109.11 could signal more declines towards the descending pitchfork’s upper median line (UML). An upside movement could be activated by a valid breakout through the warning line (wl1).
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Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He’s well-known for his day trading reviews and multiple timeframe analysis.
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September 20, 2021 at 09:12AM