Will JPY recover in April?

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Japan's new central bank governor, Kazuo Ueda, isn't planning drastic ultra-low interest rate policy changes. He's all about maintaining stability in prices and financial systems in the world's third-largest economy. And why not? According to Ueda, Japan's financial institutions aren't facing the same turmoil as their counterparts in the US and Europe. Plus, he's taking over from his predecessor, Haruhiko Kuroda, whose work he's determined to continue. On the charts, however, we have seen currencies like the Pounds and the Euro outperforming the Yen - can we expect any changes soon?

GBPJPY - Daily Timeframe

GBPJPY is trading within a rising channel while approaching a rally-base-drop supply zone. We also see the price action to the left presenting a strong case of an AMD (Accumulation-Manipulation-Distribution) pattern. I expect a bearish price reaction from the intersection of the trendline resistance and the supply zone.

Analysts’ Expectations:

Direction: Bearish

Target: 164.674

Invalidation: 168.900

CADJPY - Weekly Timeframe

In the case of CADJPY, we see a consolidation inside the descending channel, and the price is currently approaching a rally-base-drop supply zone which aligns perfectly with the trendline resistance of the channel. When we consider the fact that the price has only recently created a lower low after surpassing the previous low at 94.739; I believe there should be some bearish reaction from the supply zone.

Analysts’ Expectations:

Direction: Bearish

Target: 96.070

Invalidation: 100.948

EURJPY - Weekly Timeframe

EURJPY was a bit troublesome to look at. Too many wicks made it difficult to figure out the exact area of the supply zone. However, I've had to make do with the pivot zone on the weekly timeframe, which I confirmed based on the Fibonacci retracement levels. Based on this scarcity of multiple confluences, I would scan for a clear break of structure, in whatever direction, on the lower timeframes (4 Hours and Daily).

Analysts’ Expectations:

Direction: Bearish

Target: 141.997

Invalidation: 148.530

USDJPY - Daily Timeframe

The market structure (lows and highs) on the USDJPY chart says one thing, whereas the momentum is visibly rebelling against that direction. I'm saying this because the price action following the most reaction from the trendline support failed to deliver impressive momentum. As a result, I have marked out the demand zone that intersects the trendline support, and I will be taking special interest in the reaction at or within that demand zone. This means a clear breakout in either a bullish or bearish direction would be my trade trigger.

Analysts’ Expectations:

Direction: Bullish

Target: 130.154

Invalidation: 136.100

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

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FBS Analyst Team

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