USDJPY currency pair continues to form an uptrend

15 May 2023 249
Elena_Dorokhina
Elena_Dorokhina

Listed among the best MarketCheese authors
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USDJPY currency pair continues to form an uptrend

Uncertainty in the market related to the government debt gives support to the U.S. dollar.

 

President of the U.S. Joe Biden is optimistic about the negotiations with representatives of the Republican Party about raising the national debt limit. The country is under risk of default, the consequences of which, according to the Biden administration, will be massive and catastrophic for the economy.

 

Republicans are demanding budget cuts in response to an increase in the U.S. debt ceiling. The White House does not agree to these conditions, and negotiations are delayed. The next meeting of the parties will be held this week.

Meanwhile, concerns about a possible default in the country are growing. Uncertainty over whether the government will be able to repay the debt remains.

 

According to U.S. Treasury Secretary Janet Yellen, the country could default by June 1. The nonpartisan Congressional Budget Office, in turn, predicts it in the middle of next month.

 

As Deputy Treasury Secretary Wally Adeyemo said, if Congress fails to raise the limit of public debt by the time of default, the country faces recession.

 

On Thursday, the dollar managed to recover amid incoming information about the U.S. debt ceiling.

Representatives of ING Bank believe that the lack of progress in resolving this issue may continue to support the dollar.

 

At the same time, if a bipartisan agreement is reached, the U.S. currency could become weak again.

Support for the dollar may continue if there is no positive change.

 

Today, in another part of the world, Supreme Economic Council of Japan held a meeting to discuss the role of the government and the Bank of Japan in sustaining salary increases and eliminating the risk of a return to deflation.

 

The government considers it appropriate for the Bank of Japan to review the previous monetary policy.

 

Some participants of the economic council meeting and private experts called for the Bank of Japan to stop quantitative easing when inflation stabilizes at 2%.

 

On this background, the USDJPY quotes rose by 40 points.

 

The pair continues to form an upward corrective corridor on the H4 timeframe.

USDJPY currency pair continues to form an uptrend - Photo 1


The price showed a good impulse pulling back from the trend support, and the fundamentals are pointing to further growth. However, the most profitable position for buying will be near the local support at 135.35.

 

USDJPY signal:

 

To buy near the level of 135.35. 

The target is at the level of 137,75.

Part of the profit should be fixed near the level of 136.25.

The stop-loss is at the level of 134.05.

Bullish trend has a short-term character, so the volume of trade should not exceed 2% of your balance.

This content is for informational purposes only and is not intended to be investing advice.

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Elena_Dorokhina
Elena_Dorokhina

Listed among the best MarketCheese authors
1st in the segment "Metals"
2nd in the segments "Currencies" and "Oil and gas"
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