USD/JPY Traders Regroup Ahead Of NFP

Share On Facebook
share on Linkedin

We had strongly suspected that volatility was brewing for USD/JPY, but yesterday’s explosive moves surpassed our expectations. With a high-low range spanning nearly 4% it was its most volatile session since November 2016 (when Trump was elected), most of which was achieved within 15 minutes and kicked off with a -1.75% decline in under 60 seconds.

We can see on the daily chart that the suspected Déjà vu played out, although the trajectory of this decline was more severe. Stopping just shy of the March ’18 low, a volatile rebound saw the session close with a wide-ranging hammer candle. Whilst a break above 108.90 confirms it as a bullish hammer, it’s possible we could see daily compression within the hammer range before the next sizable move unfolds. However, as the trend remaining bearish below 111.41, we could consider short setups if bearish momentum was to return following a consolidation period.




Whilst the four-hour chart was heavily overextended relative to its lower Keltner band, mean reversion is now underway. The 20-period average may provide an area of resistance, but we’d also expect prices to consolidate as we head towards today’s NFP report.

With the trend remaining bearish whilst 109.46, short setups are preferred. Volatility has subsided during its retracement to make way for a potential for a bearish wedge which, if successful could target the 106.75 area. If data disappoints and Powell makes dovish remarks during his panel interview today, we could see USD/JPY turn lower in line with bearish momentum. Yet for us to consider bullish setups we’d need to see a clear break of 109.46 followed by a consolidation phase at the very least.


Faraday Research offers real time FX and Equity trade signals from qualified analysts. Click here to try us free.


CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

Do you want to write for our Newspaper? Get in touch:

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20211017 16:26:46