USDJPY, Silver Analysis: Dollar Rally Risks vs Yen and Silver
Key Events
- BOJ intervention risks align with US Dollar rally and Japanese inflation metrics
- BOJ Governor Ueda to speak at the International Finance Forum on Thursday
- National Core CPI and Japanese/US Flash Manufacturing PMI scheduled for Friday for volatility risks
- Sharp metal retracement sent silver to retest the lower boundary of its one-year uptrend
USDJPY Analysis: 3Day Time Frame – Log Scale
Source: Tradingview
Historical chart patterns and BOJ policies against yen weakness suggest that a USDJPY rally beyond the critical resistance levels of 157 and 160 could heighten intervention risks, similar to the BOJ’s market-shaking actions in August. A decisive close above the 107-mark on the DXY could trigger further currency sell-offs, impacting global monetary policy adjustments.
- Upside Potential: Without intervention, USDJPY could break past 157 and 160 resistance levels, heading toward the 167–170 zone, aligning with the upper boundary of the parallel channel connecting the 2023–2024 highs.
- Downside Risk: A retreat below the 151 mark could lead to support at 149 and 146, before potentially confirming a deeper drop toward the yearly low.
BOJ Governor Ueda’s recent remarks emphasize their readiness to act on rates without waiting for complete clarity, warning that delays could necessitate more aggressive hikes.
Silver Analysis: 3Day Time Frame – Log Scale
Source: Tradingview
The US Dollar’s rally and a decrease in market uncertainty have driven a sharp retracement in precious metals, pressuring silver to retest key technical levels. These include the trendline connecting consecutive lows between 2023 and 2024, the trendline connecting highs from May to September 2024, and the 0.618 Fibonacci retracement of the trend between August and October 2024.
Silver remains within the boundaries of its one-year up-trending parallel channel, and the scenarios are the following:
- Bullish Scenario: If the primary uptrend holds, silver could recover toward resistance levels at 31.60, 32.60, and 35, with the potential to reach a new decade high of 37
- Bearish Scenario: A decisive close below the critical support at 29.60 could extend the drop toward the 26-price zone, with possible support levels at 28.70 and 27.70
--- Written by Razan Hilal, CMT on X: @Rh_waves
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Contracts for Difference (CFDs) are not available to US residents.
FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of Stonex Group Inc.
Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.
© FOREX.COM 2024