In the foreign exchange market for the week that ended on November 16th, the USDJPY climbed to the 155 yen range as the U.S. government shutdown was expected to end, and as financial policy directions remained different between the U.S. and Japanese central banks. The EURUSD moved slightly higher despite the strong dollar. The GBPUSD remained above the 1.30 level but failed to advance.

November 10 (Mon)

During Tokyo trading hours, risk aversion eased and yen selling strengthened in anticipation of the imminent end of the U.S. government shutdown. The USDJPY moved steadily and rose to 154.25 yen.

The EURUSD hovered within the upper 1.15 range, while the GBPUSD climbed to touch the 1.319 range.

November 11 (Tue)

After the Senate reportedly passed the funding bill, the USDJPY rose to just below 154.5 yen. Although the pair fell to 153.65 yen after the ADP National Employment Report showed a decline in private-sector jobs, it rebounded to the 154 yen range.

The EURUSD temporarily advanced above the 1.16 level. Meanwhile, weak U.K. employment figures pushed the GBPUSD down to the 1.311 range.

November 12 (Wed)

While the yen continued to weaken against the dollar, the USDJPY temporarily broke above the 155 yen level, renewing an annual high since February. The yen-carry trade was supported by market speculation that the U.S.-Japan interest rate differential would shrink later than expected.

The dollar strengthened against the euro and the pound as well. The EURUSD halted its rally and fell to the 1.156 range. The GBPUSD dropped to 1.308 but managed to remain above the 1.30 level.

November 13 (Thu)

The House of Representatives passed the funding bill, clearing the way for an end to the government shutdown. Traders took a risk-on stance and sold the yen. Nevertheless, USDJPY struggled to advance but fell to the 154.1 yen range.

Meanwhile, the EURUSD moved solidly to the 1.165 range, and the GBPUSD rebounded to the 1.32 range.

November 14 (Fri)

Traders' correction of their positions pushed the USDJPY down to the 153.6 yen range. However, the pair quickly erased the decline and concluded the weekly trading session with the dollar maintaining its strength.

The EURUSD fluctuated around the previous day's close but finished the weekly trading session in the lower 1.16 range. The GBPUSD concluded the weekly session in the upper 1.31 range.

November 16 (Sun)

• 23:50 Japan: July-September Quarterly Gross Domestic Product (preliminary GDP)

November 19 (Wed)

• 10:00 Europe: October Harmonised Index of Consumer Prices (revised HICP)
• 10:00 Europe: October Harmonised Index of Consumer Prices (revised HICP core index)
• 19:00 U.S.: Federal Reserve Open Market Committee (FOMC) meeting minutes

November 20 (Thu)

• 13:30 U.S.: September change in nonfarm payrolls
• 13:30 U.S.: September unemployment rate
• 13:30 U.S.: September average hourly earnings
• 23:30 Japan: October Consumer Price Index (CPI, all items, year-on-year data)
• 23:30 Japan: October Consumer Price Index (CPI, all items less fresh food)
• 23:30 Japan: October Consumer Price Index (CPI, all items less fresh food and energy)

The following currency pair charts are analyzed using an overlay of the ±1σ and ±2σ standard deviation Bollinger Bands, with a 20-period moving average.

U.S. employment figures for September will be released on November 20th. However, the market is waiting for the minutes of the latest FOMC meeting, due out the previous day, to determine whether the Federal Reserve Board intends to cut rates in December. Meanwhile, if the USDJPY climbs above 155 yen, the Japanese government will strengthen its warning against the weak yen, capping the pair's uptick.

Next is an analysis of the USDJPY daily chart.

The pair was pushed down after reaching the 155 yen range last Wednesday. However, as the long lower wick on Friday shows, the pair showed a rebound close to the weekly high. It would be better to take advantage of dips than to try to follow a surge opportunity.

We continue with an analysis of the USDJPY weekly chart.

On the weekly chart, the pair shows a strong uptrend. The negative candlestick two weeks ago turned out to be a buying opportunity and helped the pair continue to advance. If the pair breaks above the 155 yen level again and goes up further, it may reach around 155.88 yen in the short term and climb as high as around 158.87 yen in the medium term.

If the E.U.'s economic indexes, due out this week, show positive business confidence, the European Central Bank will be expected to hold off on additional rate cuts. Meanwhile, the reopening of the U.S. government will boost the dollar. If the FOMC minutes, due out on November 19th, suggest the FRB's reluctance to make additional rate cuts, the dollar will strengthen further.

Next is an analysis of the EURUSD daily chart.

The downtrend came to an end, and the pair recovered to the +1σ level. However, if the pair clearly turns into an uptrend, it should break above the 1.1728 level.

We continue with an analysis of the EURUSD weekly chart.

Two consecutive positive candlesticks appear on the weekly chart. However, the latest candlestick has a longer upper wick than the previous one. Also, the middle line is flattening. Judging from these factors, the pair does not have a clear direction in the near future. If the pair falls below -2σ again, the downtrend will likely resume.

The dollar's behavior will continue to dominate the GBPUSD. Meanwhile, recent major economic indexes reveal the weakness of the U.K. economy. If the U.K.'s CPI, due November 19th, misses market expectations, speculation about an additional rate cut by the Bank of England will increase, and the pound will be sold off.

Next is an analysis of the GBPUSD daily chart.

Although the pair managed to stay above the 1.30 level last week, it remains in the balance. If the pair wants to return to an uptrend, it should break above the 1.3369 level. Therefore, it is safe to say now that the downtrend will likely continue.

We continue with an analysis of the GBPUSD weekly chart.

Two consecutive positive candlesticks appear on the weekly chart, and the pair returned from outside the band to -2σ. However, as the long upper and lower wicks indicate, it is hard to declare whether a trend reversal has occurred. Also, the middle line is trending downward. Overall, the downtrend will likely continue.