USDJPY Weekly Forex Analysis: The Hyperinflation Flames Around US Economy Is Yet To Be Quenched

Last week Wednesday saw a positive comeback in the price of the greenback as the Consumer Price Index rose to its highest all-time high of 6.2% in the past three decades. And it was considered to be far larger than the estimated 5.8% forecast of the economic analysts.

The CPI data which served as the main inflationary gauge of the US economy has been put to watch by the policymakers and the market traders along with the financial institution's bodies. And In connection with the last FOMC meeting which was aimed at inducing interest rates hike and was later kept unchanged by the policymakers. However, a statement by the Fed Chairman Jeremy Powell pointed out that “ inflation is transitory” meaning the inflationary condition of the US is for a temporary moment.

However, the case has never been similar with financial market players as rising inflationary conditions posed alarming emotions on the value of the greenback.

Until the present, the term “inflation is transitory” has been considered to be the triggering factor that's causing the negative price sentiment in the major currency market. Most essentially the Dollar/Japanese yen market. The assertion inflation is transitory '' also influences the feds to overlook the unending chaos that is in connection with the hyperinflation economic situation. At the moment this should have compelled the decision of the federal reserve towards taking a look at the inflationary condition of the United States to hasten a tighter monetary policy as soon as possible. On the other hand, this will be enough to quench the burning flames of hyperinflation Saga.

What Is In-Store For USDJPY In The Coming Days Ahead？ Technical Analysis Outlook For USD/JPY Summary

USDJPY 1-Hour Chart

The price of USDJPY had a sharp decline after making a touch at the ¥114.283 resistance level at the close of the last trading session on Friday. The price of the pair was said to have plummeted following the not so good dip in the U.S. consumer sentiment survey that was announced by the University of Michigan last week.

Meanwhile, the Fibonacci retracement level spotted in the 1-hour chart implied that; the likelihood of pricing dwindling further above the present price will ignite a bullish move at attaining the initial positive closing price of ¥114.283. While a negative price action below the 61.8 Fibo retracement levels will endeavour price to settle around the average price of ¥113.00s.

Above all the Relative Strength Index (RSI indicator) illustrates a steady approach to the near term average market profit and loss ratio of 50 as it was recently seen at 48.14 from the 1-hour chart. In connection to retracement levels expressed in the fibo diagram the original resistance point of the pair remains at ¥114.331 and ¥113.727 equates to the major support.

USD/JPY 4-Hour Chart

Diving further into the 4-Hour chart, the market had been trading in a swing price-action sentiment as the higher highs and lower lows continued to expand their wings in similar Supply and demand quantities. However, the price of the pair had its initial pullout from the swing price pattern on the 20th of October and made fresh hourly lows at the target price of ¥112.697 before pulling back into the swing trading price action horizontal neutral trend direction. In general, as at the time of writing this technical analysis both the RSI and the ATR indicator are pointing lower to a value below the average which is a good hint for a short position determinant.

USD/JPY Daily Chart

Up till now the all-around trend direction of USDJPY has been in above the ground bullish preference as the technical analysis sentiment around the US dollar performance in the last 15 days has been brought to attracting limelight, that's causing the dollar to strengthen against the Japanese Yen. However, the USDJPY daily price chart. printed a bullish flag candlestick chart structure. In all cases, the bullish flag pattern represents a possible bullish comeback in the value of the US dollar against the yen. And to bring clarity to the favourable trading recommendations for this pair it should be noted that the Average True Range that measures the volatility strength of the market revolves around a less bullish tone. While the RSI indicator is considerably trading below average which is an indication of neutral trend direction, In essence, an increase in the volume of traders can spur the volatility strength of the pair.

Bottom line

The rest of 2021 will be faced with fewer volatility conditions while the bullish run for the pair could remain unchanged. Hence trading USDJPY from a bullish outlook could enable a positive yield in market value.

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