The US Federal Reserve’s last meeting minutes and US job numbers announcement are the most important events for the Forex currency market in general and for the US dollar in particular this week. The US dollar continues to achieve record gains against the rest of the other major currencies, and in the case of the USD/JPY currency pair, it moved towards its highest in 24 years. The currency pair is stabilizing around the 135.20 level at the time of writing the analysis, after gains towards the 137.00 resistance level.

The clear contrast between the future of global central bank policy tightening and economic performance between the US and Japan remains in favor of the overall bullish trend for the currency pair. The US Federal Reserve continues to confirm that it is determined to raise the US interest rate more times until the record inflation in the country is contained, and at the same time, the economic performance of the United States provides it with enough impetus to pass it.

On the other hand, the Japanese central bank is completely unlikely to follow in the same footsteps as global central banks, and is still providing more stimulus to the Japanese economy, which is suffering from the consequences of the epidemic and finally the Russian-Ukrainian war. And according to what was recently announced, Japan’s tax income for the year ending in March rose to a record high for the second year in a row, as corporate profits and incomes jumped amid the ongoing recovery from the epidemic.

Tax income for the most recent fiscal year was 67 trillion yen ($492 billion), according to a statement issued by Japan’s Ministry of Finance. With an unexpected big jump in sales and corporate tax revenue, total revenue increased about 10% from last year’s record high of 60.8 trillion yen. The positive numbers suggest that Japan’s recovery may be stronger than expected, and that less debt issuance may be required if tax revenue levels continue. However, the fee gains are not enough to reduce Japan’s debt mountain and the country will need to continue issuing government bonds to ensure that the social security system continues to be funded.

Sales tax income for the year ending in March was 21.9 trillion yen, up 900 billion yen from the previous year and hitting a record high. The ministry’s data showed that corporate tax increased to 13.6 trillion yen, while income tax rose to 21.4 trillion yen. For the year starting in April of this year, the government expects total revenue to be 65.2 trillion yen, but that figure may be revised upward if the trend continues last year.

The Finance Ministry also said that as a result of higher tax income levels, the government will issue 8 trillion yen less new government bonds.

I have often mentioned that after the recent and continuous record gains for the USD/JPY currency pair, this may be punctuated by the occurrence of profit-taking sell-offs, and then the currency pair will complete its natural course to the upside. As the technical indicators are still moving towards overbought levels, the markets have fully absorbed the factors of the US dollar’s gains. The closest targets for the bulls are currently 136.00, 136.85 and 138.00, respectively. On the other hand, according to the performance on the daily chart, the actual reversal of the general trend to the downside will not occur without breaching the 130.00 psychological support level. Otherwise, the general trend will remain bullish.

ETH/USD has been a large part of the crash within the cryptocurrency market and while current support puts up a fight, lower values may be awaiting speculators.

Unless you have crawled out of a cave this morning and have had no mobile telephone internet service, you likely know that ETH/USD has produced a rather disruptive and downward couple of days as its value has sunk.  Ethereum along with the broad cryptocurrency market has slid to long term lows and the bearish trend which has engulfed ETH/USD may not be over yet.

Speculators who dare to consider upwards reversals may exist, but the bigger question may be why? Yes, higher moves certainly still happen in ETH/USD, but wagering on upside momentum to generate while the present conditions near term stir may be like playing with fire.

For those interested in upside the current 1235.00 level although it is extremely close should be watched. If a move occurs which takes ETH/USD over this juncture and sustains the action, Ethereum could then certainly challenge slightly higher altitudes. However these climbs may not prove to hold and erosion of value may detonate at any moment leaving no floor.

Traders who are still active and want to continue wagering on further price movement lower cannot be blamed.  If a speculator can ignite a selling position using current resistance levels as a place to launch shorts this may prove an opportunity to participate in ETH/USD. However traders need to understand the market is extremely volatile, even if a trader claims to know this, it may be important to repeat this mantra as the day progresses. The use of risk management is essential.

If the 1200.00 level fails to hold back the downward tide again in the short term, traders may target nearby marks which have already been flirted with in the past hours.  ETH/USD did hit a low of nearly 1066.00 a handful of hours ago and speculators may want to aim for this target. However, traders are advised not to be overly ambitious under the present conditions. Choppy results are likely to be abundant and profits should be cashed in when they are achieved with successful moves.

Wagering on ETH/USD should be done with great amounts of care today. The cryptocurrency market has produced significant downward results, but always threatens to shake upwards for a while. Ethereum has experienced a whirlwind of declines and new lows may be seen in the near term.

Ethereum Short Term Outlook:

Current Resistance: 1235.00

Current Support: 1127.00

High Target: 1301.00

Low Target: 970.00