At the auction on September 13-17, the US dollar was the undisputed favorite and strengthened against all its main competitors. In particular, the dollar/yen currency pair increased by 0.05%. I want to draw your attention to the fact that the Japanese yen has suffered the most insignificant losses of all the major currencies. I believe that this became possible because both the US dollar and the Japanese yen, depending on the situation and market sentiment, are safe-haven currencies. It is also necessary to emphasize that the US dollar is supported by the expectations of market participants regarding the timing of the US Federal Reserve's (FRS) curtailment of its quantitative easing program. It is also worth emphasizing that this week's main event will be an extended meeting of the Federal Reserve, the results of which will be announced on Wednesday evening. Let me remind you again that the extended meeting of the Fed implies a press conference by the chairman of this organization, Jerome Powell. Moreover, the direction of the price movement of the US currency will depend on what this high-ranking official will say about the timing of the initial reduction in asset purchases.
At the auction on September 13-17, everything was not as clear and simple for the USD/JPY currency pair as it could be imagined. Bears on the instrument started last week quite actively and were able to lower the quote to the level of 109.14. However, the pair found very strong support and turned in the opposite direction. It is worth noting that it is not the first time this level supports the price and protects it from further decline. As for the upward movement, the dollar/yen bulls were so inspired that they decided to go up the most important psychological and technical mark of 110.00. However, they failed to do this, and the trading of the past five days closed at the level of 109.98.
Nevertheless, we note that the pair could close last week above the red Tenkan line and the blue Kijun line of the Ichimoku indicator. This factor should certainly be attributed to the piggy bank of bulls for this trading instrument. The prospects for further price movement on the weekly chart look like this. The nearest target at the top is the price area near 110.47, where the maximum trading values of the week before last were shown. The minimum values of last week at 109.14 are the nearest target of the bears for the dollar/yen. Given the ambiguous course of trading in recent weeks, as well as the lack of a pronounced price orientation, I suggest that we take a wait-and-see approach to enter the market for now. In other words, I suggest that for the time being, for USD/JPY, we stay out of the market and closely monitor further developments. We will return to the consideration of this trading instrument in the next few days. When more clear signals appear, we will identify specific positions for entering the market and trading USD/JPY. In the meantime, we are waiting.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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