Summary
This week has vital scheduled economic data and commentary from FED policy makers. The biggest event which most market participants have been waiting for is president Trump’s address at the joint congress on Wednesday (01 March 2017). We didn’t see much positive reactions to the FOMC minutes and consistent hawkish speeches that have been delivered from the FED. Trump sadly announced prior to the joint congress that he won’t be making any announcements regarding his tax plan. This left me disappointed as I was expecting a speech on substantive policy specifics regarding his tax plan. His speech will be focused on Infrastructure and security spending. Market participants are now looking forward to a speech from Yellen later this week.

Today’s top tier Economic data
– A revised set of Q4 and YoY GDP data are projected to deliver some positiveness in the greenback later on during the day.
– Consumer confidence
– FOMC member Williams speech
– Goods Trade Balance
– Personal Consumption Expenditures Prices (QoQ)

Should be a good day for the greenback

Technical Analysis
Why do bond prices fall when Interest rates rise

UsdJpy Daily Chart

Prices has been ranging between 111.6 and 115.204 throughout the part of last month and february. With price having recently come off support and expected to trade up to the top of the range, I will be looking for another opportunity to buy.

UsdJpy H4 Chart

Price opened between the weekly pivot and WM2 at the beginning of the week. We saw it break through what was then an immediate support at 112.500. Price is currently at a minor resistance level and a retest at the role reversal(112.500) is imminent.

UsdJpy H1 Chart

We saw price range for most part of yesterday until it broke the upside of the range. With overbought stochastic, we might see price retrace all the way to the fibzone should it manage to break down the 112.500 psych level. The 61.8 fib level coincides with DM2 and the role reversal.

It is also worth mentioning on my technical analysis the correlation between the 10 year T-Note and Japanese Yen(Well this pair in particular). Having seen how the UsdJpy has been ranging the entire month, the same has been happening with the T-Note. They are inversely correlated. With recent pressures surrounding interest rate hikes in the US, fundamentally it hasn't been making sense why the T-Note has been moving up until the top of the range. It only makes sense now that it recently came off the top of the range and moving down.

2 thoughts on “UsdJpy Long Setup”

  1. Dumisani Vilakazi says:

    Beautiful set up Tsholanang. Keep it up man. Nice 🙂

  2. Ryan Gandalf van Jaarsveld says:

    Hey Tsholanang

    Nice intro with all the fundamental news we need to be aware of and a nice link explaining the relationship between interest rates and the bond market. I also like the use of the 10Y with USDJPY, as you know we use this a lot at MetaTraders so it’s good to see you incorporating it with this pair. With USDJPY being range bound currently I prefer only entering at the bottom of the range or the top of the range though the entry on H1 does make sense.

    Best
    Ryan Gandalf van Jaarsveld
    Skype Ryan.Gandalf
    e-mail [email protected]
    Coach @ MetaTraders.com
    Analyst @ Forex.Today

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