Now is the time when market participants will seriously start injecting funds! This is the currency to gauge the U.S. dollar exchange rate against!

Last week, the dollar/yen exchange rate fluctuated wildly due to statements from both the U.S. and Japan sides.

The dollar weakness panic surrounding Mnuchin seemed to subside for now after President Trump’s counter-statements.

However, at Davos, there were no remarks from President Trump that would particularly drive the dollar lower, and



with Governor Kuroda’s remark that the 2% price target at the Bank of Japan is finally getting closer,

expectations for normalizing BOJ monetary policy rekindled, and the dollar weakened to the low 108 yen area for a time, with the yen strengthening.





Among such comments about one’s own currency, as January ends the market is entering a period with limited participants and trends are hard to establish.

Historically, investors begin to participate more actively around the U.S. president’s annual address; this year it is scheduled for January 30.






Reference article
“How long can the historically high levels be sustained?”



It is already clear that President Trump’s annual address will revolve around the theme of “Safe and Strong America,”

and it may put a damper on the year-start unilateral dollar selling trend.

Moreover, with the FOMC maintaining a hawkish stance and the employment data

recently focusing more on wage growth than employment indices,

as large-scale tax reform by the U.S. government prompts domestic investment and job creation, wage growth

is expected to rise gradually, which could lead to a rebound in the dollar.



We have examined the dollar/yen and euro/dollar after year-end and year-start.


Dollar/yen attempted to break above resistance toward year-end, but stalled after the new year,

and by the weekend it had reached near the downside support line, making 107-and-some-yen the next notable level to watch.

At present, it closed the week near its low, suggesting downside pressure for the dollar/yen, though

there are signs of an oversold condition on daily charts, and this week, with President Trump’s annual address, as well as

the FOMC and U.S. employment data, there are factors that could keep the yen under pressure, possibly allowing some dollar buyback.

A rebound toward a long-term support line is also anticipated.


Dollar/yen ends the week at a low
“The End-of-Period Market: The Yen Rally Was Fueled by the Unexpected Kuroda Remarks”




Meanwhile, euro/dollar corrected after last year’s near 1.20 on a weekly basis, and

in January it again began testing higher, rising to the 1.25 range.

Indeed, as participation at the start of the year remains limited,

it seems there was some market “trickery.” However, around 1.25 lies a long-term resistance line, and the euro/dollar is again approaching an overbought level,

making it unlikely that the move will continue unimpeded; rather, a pause or consolidation is likely.

It would not be surprising if the euro/dollar remains in a situation where a correction occurs.

Draghi, at the ECB meeting, expressed concerns about a near-term euro appreciation, and even in response to Mnuchin’s dollar-depreciation comments

called it “jawboning.” The euro/dollar movement that day was a see-saw, forming a long upper shadow.

Currently, it has nearly reached the upper resistance line, and a renewed overbought signal is lighting up,

and since it has also hit a long-term upper band on the monthly chart, in the near term a sense of achievement may lead to a correction in the dollar market this week.






The euro/dollar is in a volatile state following the ECB meeting. Indicators show“Ask Ultimate: Shadow Player”


Market participants are only just beginning to inject funds seriously, so

to assess the dollar market, it is best to confirm at key levels for the dollar/yen and euro/dollar.




I was interviewed recently, so an update will be posted soon!
There is also a valuable indicator giveaway in the article section…


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