The USDJPY price looks to remain bearish this week as the USD starts to weaken. News from the Federal Reserve Chairman Powell could affect the USD further this week.
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The USDJPY price is an interesting watch going into this week as we have multiple reasons why the price could reverse and continue to move lower. The strength meter going into this week showed the USD as the strongest currency but in a reversal zone and the JPY has been rising from the lows of the meter showing signs of strength. This can often lead to a reversal forming in the market and the price is currently showing the possibility of doing that. The Federal Reserve Chairman Jerome Powell has stated that they will want to look at bringing the inflation tool down by trying to balance the supply and demand for jobs in the market. The Chairman also talked about the global issues with China going into further lockdown and supply chain issues preventing inflation from slowing.
The price of the USDJPY formed a weekly reversal candle on the close last week for the first time in 9 weeks shows some JPY buyers have returned to the market. The weekly volume profile shows the price currently trading above the value area low but below a low volume node. This low volume node could offer short opportunities if the right price action can form here. If the price breaks back below the value area low the market will more than likely see a move back to the lows at 127.60. If the price breaks higher we could see the price back at the weekly point of control which could also act as a resistance level if the price was to reject this area.
Have you watched our AUDUSD analysis video yet? You can watch it here.
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