US Dollar vs Japanese Yen
As picture clearly shows that there is a chance to decline the prices of USD/JPY as far as it cross the arrow mentioned on the chart.
Forward Exchange Rate
Forecasting Future Spot Exchange Rate Unbiasedness Hypothesis The unbiasedness hypothesis states that given conditions of rational expectations and risk neutrality, the forward exchange rate is an unbiased predictor of the future spot exchange rate. Without introducing a foreign exchange risk premium (due to the assumption of risk neutrality), the following equation illustrates the unbiasedness hypothesis. F_t = E_t(S_{t + k}) where F_t is the forward exchange rate at time t E_t(S_{t + k}) is the expected future spot exchange rate at time t + k k is the number of periods into the future from time t The empirical rejection of the unbiasedness hypothesis is a well-recognized puzzle among finance researchers. Empirical evidence for cointegration between the forward rate and the future spot rate is mixed. Researchers have published papers demonstrating empirical failure of the hypothesis by conducting regression analyses of the realized changes in spot exchange rates...
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