Facts:
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The bearish setup on USDJPY after the last recommendation has been confirmed. The rate has broken through the lower limit of the last downward channel and is currently testing this line from below.
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The other arguments remain valid. The Japanese yen remains the most oversold currency in the G10, losing over 13% this year. However, the potential end of yield curve control in the new year may encourage capital to invest in the Japanese currency.
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Given the lack of further expected interest rate hikes by the market, the dollar is starting to lack catalysts for further increases. Assuming that the base scenario without a recession in 2024 materializes, we may have already seen the bottom for the dollar.
Recommendation:
Short position on USDJPY at market price
- TP1: 145,000
- TP2: 140,000
- SL: 150,000
Opinion:
The weakness of the Japanese yen remains evident in 2023. The currency has weakened the most among the G10 currencies. However, recently, there may be a shortage of catalysts to continue this movement. USDJPY failed to confirm a breakout above the resistance at 151,800 and after several attempts in recent weeks, the rate fell below 150.
We are currently observing a break of USDJPY below the rising growth channel that started at the beginning of 2023. The rate has broken below the line (blue line) and is currently testing it from below. In case of a return to USDJPY declines, we will get confirmation of the setup and a favorable scenario to open a short position. Therefore, we recommend taking such a position while simultaneously setting a tight stop loss to minimize risk.
Source: xStation 5.
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The Week Ahead
- XTB data
- A person preparing a recommendation
- Bartłomiej Mętrak
- Other persons participating in preparation of recommendation
- A name of entity supervising
- Date and hour of preparation of recommendation
- 11/30/2023 12:11
- Date and hour of publication of recommendation
- 11/30/2023 12:26
- A group of addressees of the recommendation
- XTB customers and potential customers
- Relevant information sources
- xStation5
- A time horizon for the recommendation
- Till reaching target or stop loss price
- Projected date of actualization
- Unspecified
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