USDJPY, Nasdaq Analysis: Bull Trends in Question

Article Outline

• Week Ahead: Trump Returns, Earnings, BOJ Decision, and Flash PMIs
• Technical Analysis: USDJPY and Nasdaq (3-Day Time Frames)
• Technical Analysis (TA) Tips: Wicks

Trump Returns

Donald Trump is set to take office on Monday, January 20th, while U.S. markets will be closed for a holiday. With promises of implementing drastic policies from day one, irregular volatility risks are a key concern. These policies are expected to impact global economies gradually, but unexpected developments could introduce significant risk factors.

Earnings

Positive earnings reports from U.S. banks and Taiwan Semiconductor this week have boosted momentum in U.S. indices. Next week’s earnings-related volatility may center on Netflix’s results, scheduled for Wednesday. The Nasdaq remains in an upward trajectory, holding above the 21,000-mark despite sharp downside wicks on the chart.

Ahead of major tech earnings in the final week of January, several events are likely to influence volatility:

• PBOC monetary policies (Monday)
• Netflix earnings (Wednesday)
• Manufacturing and Services PMIs (Friday)
• World Economic Forum (throughout the week)

PBOC and BOJ Decisions

China’s economy continues to exceed expectations, with stimulus-driven loan prime rates under the spotlight. These measures could amplify global economic trends, though Trump’s tough policies may challenge this momentum. Meanwhile, the Japanese Yen remains in a critical state, with intervention risks looming. Market expectations lean toward a 25 bps rate hike from the BOJ, adding pressure to the USDJPY pair.

Source: Tradingview

Wicks, or shadows, on a candlestick chart represent sharp price movements that deviate from the mean before reverting. Extended wicks on the lower side indicate an inability to sustain lows, signaling a potential upward bias (bullish). Conversely, extended wicks on the upper side reflect an inability to sustain highs, amplifying a potential downward bias (bearish). These patterns can provide key insights into market sentiment and price dynamics.