Technical Update - USDJPY resumes uptrend after volatile days. 145 set to be key support
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Despite being hit by heavy selling USDJPY stays the course and could move higher towards 160. 145 support could be key
USDJPY spiked to 151.94, which is the 2.0 projection (200%) of the volatile market 22nd September, before hit by heavy selling. Possible instigated by the Japanese Central Bank, sending the pair down below 146, spiking below the peak from then last time USDJPY got hit by heavy selling resulting in extreme volatility. Strong rebound followed and USDJPY is crawling back higher.
RSI is still bullish without divergence suggesting we could see higher levels on USDJPY.
However, the spike low at 145.29 should be observed. If USDJPY breaks below it could drop to around 140
Monthly chart shows how the 5th extended in USDJPY has almost reached the 2.0 projection of the 4th corrective vawe which is 152.90. If USDJPY reaches 157 it is the same distance as the 3rd vawe. However, no strong resistance until around 160.
RSI is at extreme level above 82 with no divergence indicating higher levels. The uptrend is very stretched however, and more volatility should be expected, both due to Central Bank intervention and profit taking.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)