Open an Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an Account
✖

USDJPY Forecast: The Yen's Drop Approaches Dec 2023 Low

Article By: ,  Market Analyst
August 5, 2024 6:58 AM
  • The ISM Services PMI today is set to boost or hold USDJPY’s drop
  • The US Dollar Index is retesting March 2024 lows
  • USDJPY Technical Analysis

Following a bearish streak of US economic indicators, from the leading ISM Manufacturing PMI to the non-farm payrolls, bearish dominance has been evident on the US Dollar index and USDJPY charts. Today's ISM Services PMI, which has dropped from a 9-month high to a 4-year low, is expected to introduce further volatility to the charts.

From a technical perspective, the extended momentum suggests a potential reversal is on the horizon. Additionally, the safe-haven demand driven by geopolitical tensions, particularly the escalating war potential in the Middle East, may also influence market dynamics in the near term.

Technical Outlook:

USDJPY Forecast: DXY – 3 Day Time Frame - Log Scale

Source: Tradingview

Retesting March 2024 lows, the US dollar index could face a potential support at the 102 border, which aligns with the trendline connecting the lows of July 2023 and December 2023. A further break to the 102 border could add further bearish pressures down towards the 101 zone.

A reversal from the 102 zone can retest the 103.80-104 zone and support a bullish reversal on the USDJPY chart.

USDJPY Forecast: USDJPY – Daily Timeframe – Log Scale

Source: Tradingview

The steep decline of the USDJPY pair is currently facing the significant December 2023 low at 140.25, which aligns with the 0.618 Fibonacci retracement of the 2024 uptrend. With momentum overstretched on the oversold side, the 140-price zone is acting as a potential support level for the ongoing 5-week drop.

Should the pair fall further below 140, additional support is anticipated around the 137 level.

Conversely, rebounds could see the pair retesting levels 146.40 and 148.60.

 

--- Written by Razan Hilal, CMT

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.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.

© FOREX.COM 2024