Technical Analyst, Saxo Bank
However, as can be seen from the monthly chart there is strong resistance at 147.65.
147.65 is the peak in 1998 and within few cents also the length of the 3rd vawe from 2012 to 2015. The uptrend since 2021 is the steepest and fastest the past 30+ years and it is quite stretched. There is still no divergence on RSI however, but since October is still not over the jury is still out.
A possible scenario could be for USJPY to spike above the 147.65 to 148-149 and then exhaust.
If USDJPY closes below the lower trendline of the rising wedge on the daily chart it is a strong indication of trend reversal. Break out for wedges usually occurs 2/3 of the way to the apex (where the two lines meet) and we are approximately 60% of the way.
If USDJPY closes above the upper trendline this Wedge reversal scenario has been demolished.
2024: The wasted year
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Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.