In the foreign exchange market for the week that ended on November 23rd, the dollar continued to strengthen against the yen, and the USDJPY reached 157.89 yen. The dollar also strengthened against the euro and the pound, pushing down both the EURUSD and GBPUSD.

November 17 (Mon)

The USDJPY broke above the 155 yen level. Since traders speculated that the Bank of Japan (BOJ) would not intervene in the market, the dollar continued to strengthen against the yen.

Meanwhile, the EURUSD fell to the 1.158 range, and the GBPUSD hovered in the upper 1.31 range.

November 18 (Tue)

After the Nikkei 225 index plummeted during the afternoon trading session, traders took a risk-off stance and bought yen. The USDJPY fell to around 154.82 yen. Later, the dollar buyback lifted the pair to the 155.7 yen range.

Meanwhile, the EURUSD remained slightly weak, hovering around the 1.16 level. The GBPUSD also fluctuated around the 1.315 level.

November 19 (Wed)

During the tripartite meeting between Bank of Japan (BOJ) Governor Kazuo Ueda, Financial Minister Satsuki Katayama, and Minoru Kiuchi, the state minister in charge of economic and fiscal policy, they did not discuss the foreign exchange market. Also, the Federal Open Market Committee (FOMC) meeting minutes revealed that the Federal Reserve Board (FRB) was reluctant to make rate cuts in December. Consequently, the USDJPY rose to the 157 yen range.

Conversely, the EURUSD fell to the 1.151 range and the GBPUSD dropped to the 1.304 range.

November 20 (Thu)

As the yen continued to weaken against the dollar, the USDJPY reached 157.89 yen. However, the pair then declined as traders turned cautious due to concerns about market overheating. Although the Department of Labor released employment figures for September, the market cared little about its old data.

The EURUSD fell but managed to stay above the 1.15 level. Meanwhile, the GBPUSD rebounded to the 1.312 range.

November 21 (Fri)

While traders made pre-weekend position corrections, Financial Minister Katayama warned against the weak yen. As a result, the USDJPY declined to the 156.2 yen range during trading hours.

The EURUSD rebounded to break above the 1.155 level but was later pushed down to below the 1.15 level as traders took advantage of the short-lived rally to sell the euro. The GBPUSD fell to 1.308 but then rebounded to the 1.31 range to conclude the weekly trading session.

November 24 (Mon)

• Closure: Japan (substitute holiday)

November 25 (Tue)

• 13:30 U.S.: September Retail Sales
• 13:30 U.S.: September Retail Sales (excluding automotives)

November 27 (Thu)

• Closure: U.S. (national holiday)
• 12:30 Europe: European Central Bank (ECB) Governing Council meeting minutes

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 turned out to be mixed. On the other hand, more market participants are expecting that the BOJ will not raise rates in December. Consequently, the USDJPY will move steadily this week. The interest rate differential between the U.S. and Japan is not expected to shrink significantly. The pair will target 158.87 yen, the current annual high set in January.

Next is an analysis of the USDJPY daily chart.

Last week, the pair went outside the band but was pushed back inside to conclude the weekly trading session. However, the daily chart shows that the pair is trending strongly upward along the upward bandwalk. It is safe to say that the uptrend will likely continue.

We continue with an analysis of the USDJPY weekly chart.

As with the daily chart, the weekly chart shows an upward middle line, indicating a strong uptrend. Although the pair was pushed down, as suggested by a long upper wick, if it breaks above the 157.89 yen level, it will target the annual high of 158.87 yen.

The lack of major news in the upcoming days will prevent traders from preferring the euro. As the U.S. jobless rate rose in September, the market is increasingly speculating that the FRB will make a rate cut in December. If another sign of a U.S. economic downturn emerges, the dollar will be sold, which in turn will help strengthen the euro against the dollar.

Next is an analysis of the EURUSD daily chart.

Since the middle line is trending downward, it would be better to sell on the rally, anticipating that the pair will rise but not advance above the 1.1656 level. On the other hand, if the pair falls below the 1.1469 level, the downtrend will accelerate.

We continue with an analysis of the EURUSD weekly chart.

Last week, the pair declined to offset the previous two weeks' rally and crossed below the 1.15 level. If the pair closes below the 1.1319 level, where the rally leading to the most recent high started, it may be fair to say that the pair has entered a downtrend.

Since no major U.K. economic indicators will be released this week, the dollar's behavior will dominate the GBPUSD. Amid increasing speculation of a U.S. rate cut in December, if U.S. Retail Sales for September, due out on November 25th, show modest growth, the dollar will weaken against the pound.

Next is an analysis of the GBPUSD daily chart.

The pair is on a downtrend as it has been fluctuating beneath the declining middle line. It would be better to make sure to sell on the rally. As long as the pair stays below the 1.3369 level, it is safe to say that the downtrend will likely continue.

We continue with an analysis of the GBPUSD weekly chart.

The pair is on a downtrend even on the weekly chart. As long as the pair stays below the 1.3369 level, it is safe to say that the downtrend will likely continue. The pair is currently managing to stay above the 1.30 level. However, if the pair falls below this level, it will target 1.2708.