Ultima Markets

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDJPY for 4th June 2024.

Key Takeaways

• Carry trading drives the depreciation: The weakening of the Japanese yen and the strengthening of the US dollar have increased the attractiveness of carry trading, which refers to borrowing Japanese currency to buy US dollar while earning more than 5% of profits. The weakening of the yen has further boosted the returns of carry trading, and only when there is unexpected positive news on the fundamentals can the yen break the current vicious cycle.
• Differences in monetary policies: With the Federal Reserve still tight-lipped in terms of interest rates, focus will be placed upon this week’s unemployment claims data. In addition, traders will also pay attention to policy meeting by Federal Reserve and Bank of Japan next week to gauge the trend direction of USD/JPY.

Technical Analysis

Daily Chart Insights

• Stochastic Oscillator: The indicator sends a bearish signal in the overbought area, followed by a downward trend in the fast line indicator. The slow line indicator completely deviated from the overbought area yesterday, indicating that the current bearish position has the upper hand and is worth switching to a smaller time cycle to focus on selling opportunities.
• Moving average support: The red downward trend line above the USD/JPY prevents the exchange rate from further rebounding and rising. Yesterday, the exchange rate fell below the black support line of 156.560. If the exchange rate rebounds within this range during the Asian session, it is highly likely to fall below the red 33-day moving average and inch towards the black 65-day moving average.

H4 Chart Insights

• Stochastic Oscillator: The indicator sends a bearish signal above the 50 median line, indicating that it is about to enter an oversold area, indicating a strong short-term decline in the exchange rate. It is worth paying attention to short selling opportunities at any time.
• Head and shoulder pattern: The random indicator and price of the US dollar against the Japanese yen show a clear deviation trend, which is a typical head and shoulder top pattern. After breaking through the neckline and short-term moving average groups (red 33-day and black 65-day) yesterday, the probability of subsequent declines increased. At present, the area along the downward channel line has been touched, and the next target is to look towards the green 200-day moving average.

Pivot Indicator

• According to the trading central in Ultima Markets APP, the central price of the day is established at 155.75,
• Bullish Scenario: Bullish sentiment prevails above 155.75, first target 157.03, second target 157.40;
• Bearish Outlook: In a bearish scenario below 155.75, first target 155.13, second target 154.75.

Conclusion

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Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.