USD/JPY Trading Support and Resistance
USD JPY Forecast and Analysis
This week, I'll start with my monthly and weekly Forex prediction of currency pairings to keep an eye on. The first portion of my projection is based on my analysis of Forex prices over the last 20 years, which shows that the following approaches have all delivered positive results:
Trading the two currencies that have been moving the strongest over the last six months.
Trading against exceptionally significant weekly counter-trend movements made by currency pairings the previous week.
Carry Trading: Purchasing high-interest-rate currencies and selling low-interest-rate ones.
Let's have a look at the most recent statistics on currency price fluctuations and interest rates, which we gathered using a trade-weighted index of the world's main currencies:
Monthly Outlook for January 2023
I predicted that the EUR/USD currency pair would grow in value and the USD/JPY currency pair would decline in value in January.
The anticipated performance is as follows:
Weekly Forecast for January 8th, 2023
I didn't make a weekly forecast last week. I'm not making a weekly forecast this week because there were no abnormally big counter-trend price swings in the market last week.
Because of high-impact data released this week, directional volatility in the Forex market is anticipated to rise in the following week.
Last week was dominated by the Australian Dollar's relative strength and the Japanese Yen's relative weakness.
Popular Pairs' Key Support/Resistance Levels
Trades should be entered and terminated at or near critical support and resistance levels, according to what I teach. This week, significant support and resistance levels on the most popular currency pairs may be tracked.
Let's look at how trading one of these important pairs off key support and resistance levels last week may have played out:
USD/JPY Levels
Last week, I predicted that the level at 129.60 would operate as support in the USD/JPY currency pair, as it has previously performed as both support and resistance. Take note of how nicely these "role reversal" levels may function.
The H1 price chart below illustrates how the price rejected this level near the close of last Tuesday's Tokyo session (which may sometimes be a good time to begin Forex trades with the Japanese Yen) with a massive bullish engulfing candlestick, as shown by the up arrow.
Based on the scale of the entrance candlestick structure, this trade has been exceptionally successful, with a maximum positive reward-to-risk ratio of more than 9 to 1.