April-28, 2022, Currency trading weekly analysis and forex market forecast, By forex forum.
The EUR/JPY is about to close in April with gains of 2.25% in the month.
The shared currency is rallying against the Japanese yen after the Bank of Japan (BoJ) committed to its dovish stance, despite expressions of the Japanese Minister of Finance that FX volatility is undesirable and calling recent moves “extremely worrying.” At 137.68, the EUR/JPY is up 1.55% in the day, up almost 200-pips in the trading session.
EUR/JPY Price Forecast: Technical outlook
On Wednesday’s note, I wrote, “As long as the EUR/JPY sits above 134.29,” the EUR/JPY “would stay bullish.” The Bank of Japan helped in fulfilling the aforementioned, being the only bank without tightening monetary policy. The EUR/JPY, on its way north, broke all the resistance levels mentioned on Wednesday’s vote, opening the door for further upside.
With that said, the EUR/JPY’s first resistance would be 138.00. Break above would expose 139, followed by April’s 25 daily high at 139.23, which, once cleared, will push the EUR/JPY towards the YTD high at 140.00.
On the other hand, USD/JPY THROTTLES HIGHER
When I looked into USD earlier this week, USD/JPY looked like it might have some pullback potential. That has since turned out to be incorrect as the Yen got another major shot overnight, and this move in the Yen was even weaker than that of the Euro or British Pound as indicated by the gains in EUR/JPY and GBP/JPY that are showing as of now.
Previously the 130.00 level was looked at as important. This morning, that seems to be less so as price has forced a push above the 130 level and even touched 131.
Yesterday’s bullish engulfing candlestick in USD/JPY has extended up to another fresh 20-year-high.
Moreover, AUDUSD trades to the lowest level since February 2022 The AUDUSD has seen the price back below a swing area between 0.7079 and 0.71038 on the daily chart in trading today.
The low price reached 0.70543. Going back in time, the February 4 low reached 0.70512. That was the next target, but buyers leaned against the level and have since pushed the price back within the aforementioned swing area.
With US stocks now trading at their highest levels of the day, the pair is now testing the 0.71038 high swing area level. Getting above that level increases the bullish bias in the short term at least.
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Elsewhere, EUR/USD remains in negative territory. Early in the American session, it fell to lows of about 1.04701, an area that was last visited in January 2017.
According to the daily chart, we can see that a strong downward trend began in early February. EUR/USD is likely to be reaching oversold levels. The zone of 1.0498 is viewed as the key support level. Around 1.0470, there is the lower border of the downtrend channel.
Both levels could offer a technical bounce for the pair and it could reach the level 4/8 Murray at 1.0742. The outlook for EUR/USD remains skewed to the downside, in response to dollar dynamics, geopolitical concerns and the divergence in the Fed and ECB rhetoric.
Investor concerns continue to push them toward the US dollar as a safe haven and toward US Treasuries, thus weakening the euro and other assets that trade against the dollar.
On the other hand, USD/CAD is down 25 pips on the day and testing support from a pair of lows over the past 24 hours.
The main catalyst is a rapidly-improving mood in risk assets. The Nasdaq is up 2.75% and the S&P 500 up 2.3%. Both have bounced around recently but the bulls look like they're finally making a strong stand ahead of the Nasdaq 's lows of the year. That will be tested with Amazon set to report after the close.
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