boutique trading strategies: How Much Further Will The USDJPY Plunge?
The USDJPY pair has had a tumble for the past few days. How much further can we expect it to fall?
This past week, US President Trump made a comment about the US Dollar being too high and the currency immediately had a decline. Trump's reference to the USDollar strength allowed China to push the yuan lower and the currency wars are still alive and well.
Here is a Daily chart of the USDJPY pair illustrating the recent free fall.
The Weekly chart shows what may be coming for the pair. As you can see the price is in the Ichimoku cloud which may present some good support. We will have to watch closely to see what happens, will it break through the support or be range bound and then climb higher.
On this Monthly chart is marked some support lines based on past support and resistance. It may well be that the top of the cloud will be strong support, only time will tell.
In the next few days, the US Commerce Secretary, Wilbur Ross, will be visiting Japan to meet with Japanese Trade Minister Hiroshige Seko.
The United States is going to be pushing for a Free Trade Agreement which Japan is not necessarily in favor of.
The United States also has a concern that the pending bankruptcy of Toshiba Westinghouse may allow some valuable technology to fall into the hands of Chinese investors.
Another important pending meeting will be US Vice President Pence meeting with Japanese Prime Minister Shinzo Abe. Undoubtedly they will be discussing North Korea.
Both of these meetings can result in volatility for the USDJPY pair in coming days.
The Japanese economy has been moving to higher ground for 52 months in a row, one interesting statistic is that for each 100 people seeking employment, there are 143 open jobs, Tokyo has 203 openings per 100 job seekers.
Retail growth has been slow, there have been 12 months of decline in household spending as employers are switching to contract employees resulting in very slow wage growth.