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31.01.202210:26 Forex Analysis & Reviews: USD/JPY analysis and outlook for January 31, 2022

Hi, dear traders!

Last week, USD advanced against all major currencies, including the Japanese yen. The US dollar was pushed up by stronger hawkish rethoric of the Federal Reserve, reflected in statements by Fed chairman Jerome Powell after its January meeting. Raphael Bostic, president of the Federal Reserve Bank of Atlanta, spoke in favor of raising the fed funds rate by 50 points, depending on the latest macroeconomic data. Bostic also stated that the Fed could hike the rate at any following Fed meeting, reiterated his call for three interest rate increases starting in March, expressed his satisfaction with the state of the US economy and called for a balance sheet reduction to begin as soon as possible. Bostic also hoped that wage growth is not a factor boosting inflation, and expected wage growth to slow down in the future. Overall, Bostic reiterated the Federal Reserve's hawkish position.

Weekly

Exchange Rates 31.01.2022 analysis

According to the weekly chart, USD/JPY continued to be on the uptrend - its candlestick eclipsed the previous candle with a long upper shadow and a bearish body. The pair surpassed the key psychological, historical and technical level of 115.00, closing at 115.71. If it continues to climb, it would then encounter resistance at 116.37. A true breakout of this level would allow the bullish trend to continue further. The US labor market data, which is due on Friday, will significantly affect the pair's trajectory this week.

Daily

Exchange Rates 31.01.2022 analysis

On Friday, a Shooting Star reversal pattern appeared - it can be seen on the daily chart. The main goal for bullish traders is pushing the pair up above the resistance at 115.71 - early on Monday, the pair was approaching this level. Taking into account the hawkish position of the Fed and technical factors, traders could open long positions at the current levels, though it would be risky. Another, less risky option is opening long positions after the pair performs a true breakout of the resistance level at 115.71 as the pair retraces towards it. If USD/JPY fails to perform a true breakout of 115.71, and another bearish reversal pattern appears below this level, short positions could be opened.

Good luck!

*Phân tích thị trường được đăng tải ở đây có nghĩa là để gia tăng nhận thức của bạn, nhưng không đưa ra các chỉ dẫn để thực hiện một giao dịch.

Ivan Aleksandrov,
Analytical expert of InstaSpot
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