Will USDJPY make a run at 140 (or below)?
The stars seem to be lining up for a weaker USDJPY.
- Expectations are for more BoJ rate hikes.
- By contrast, expectations have shifted in favor of 3 Fed rate cuts this year, starting as early as June.
- Trump’s tariff policy has led to uncertainty that is impacting the economy and weighing on stocks.
- The JPY tends to benefit when there is a risk off mood
- President Trump’s warning not to weaken one’s currency to offset the impact of tariffs suggests the MoF/BoJ will have its hands tied should the pace of the USDJPY slide accelerate.
Looking at charts
USDJPY DAILY CHART
As this Amazing Trader (AT) real-time charting algo daily chart shows there is a clear USDJPY downtrend.
However, as the chart also shows, it has not been a straight line move down with plenty of correction attempts that have not followed through.
Is USDJPY headed for 140?
Amazing Trader Logic
The chart shows a classic AT ladder pattern, which repeats in all time frames in any instrument the broker offers on its MT4 platform. The longer the time frame, the stronger the pattern (trend).
The strategy: The AT Ladder Pattern stays intact as long as the last blue line (red in the case of an uptrend) that preceded a new low stays untouched. It is like climbing down a ladder (up a ladder when in an uptrend). The strategy says look to sell (buy) with a stop above (below) the most recent AT line that preceded the new low (high).
So as can be seen by the falling blue AT lines how the ladder pattern, which started at 158.85, has not be violated.
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