Forex And Cryptocurrencies Forecast For Aug. 16 - 20

USD/JPY: South Following Treasury Yields

Forex and Cryptocurrencies Forecast for August 16 - 20, 20211

  • Last week we named our forecast for this pair “North Following Treasury Yields”. In the current one, only one word has been replaced, "North" for "South".

    The previous title has fully justified itself. As anticipated, USD/JPY grew in the first half of the week, reaching the height of 110.80 on August 11. However, then “something went wrong”, the pair turned around and flew down, putting the last chord at 109.55. The first reason is repeated many times above. An additional advantage to the Japanese safe-haven currency was given by the yield on 10-year US Treasury bonds. This indicator dropped sharply by 4.5%, reaching a weekly low of 1.3%.

    The USD/JPY pair finished five days substantially below the key 110.00 horizon, and experts say this does not bode well for the dollar. (Of course it's about the near term). Thus, 45% of analysts vote for the continuation of the downtrend, another 45% prefer a sideways trend, and only 10% believe that the bulls will be able to turn the pair northward again.

    As for the trend indicators, there is also a clear advantage on the side of the reds: 100% side with them on H4, 75% on D1. There is not a single one among the oscillators on H4 that would point to the north. True, 25% have taken a neutral position, and out of 75% of those looking down, almost half are in the oversold zone. On D1, 65% point south, 20% point west, and 15% point north.

    Support levels are 109.35, 109.05 and 108.70, the target of the bears is to retest the April low of 107.45. The nearest resistance levels are the zone 110.00, 110.55, 110.80, 111.00 and 111.65.  The ultimate goal of the bulls is still the same: to get to the cherished height of 112.00.

    Among the week's events would be the release of preliminary Japanese GDP figures for Q2 2021 (forecast: growth from minus 1.0% to plus 0.2%). However, as the practice shows, this will have little effect on the pair's behavior. The main focus should be on US macro statistics. And it could quite break the current trend and re-send the pair north.
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