Tag: USDJPY Technical Analysis

Fundamental
Overview

The USD continues to be
supported amid the ongoing de-escalation in trade wars. This has most likely to
do with positioning rather than fundamentals. The short dollar trade got very
overstretched so positive news on the tariffs front is providing a pullback. In
the medium term, the US Dollar should keep on depreciating as the path of least
resistance for the Fed remains to cut rates.

On the JPY side, the
currency has been driven mainly by global events rather than domestic
fundamentals. Alongside the Swiss Franc, it’s been the favoured safe haven in
the currencies space amid the swings in risk sentiment. On the monetary policy
front, the BoJ kept interest rates unchanged as expected and
delivered a dovish message.

This was then echoed by BoJ
Governor Ueda which placed a great deal on trade war developments. In summary,
the central bank is likely to go faster on rate hikes in case we get a good
trade deal and delay rate adjustments in case the trade deal disappoints.

USDJPY
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDJPY continues to pull back from the key 140.00 handle. From a risk
management perspective, the sellers will have a better risk to reward setup
around the major trendline to position for further
downside, while the buyers will look for a break higher to increase the bullish
bets into the 151.00 handle next.

USDJPY Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have an upward minor trendline defining the bullish momentum. If we
get a pullback, the buyers will likely lean on the trendline to position for a
rally into the major trendline, while the sellers will look for a break lower
to increase the bearish bets into the 140.00 handle next.

USDJPY Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as chasing the rally at these levels doesn’t look
good. We have also the US NFP report today which could provide a pullback in
case the data is weaker than expected. The red lines define the average daily range for today.

Upcoming
Catalysts

Today, we conclude the week with the US NFP report but
watch out for tariff related news as that’s what really matters for the market
now.

Later this year,
ForexLive.com
is evolving into
investingLive.com, a new destination for intelligent market updates and smarter
decision-making for investors and traders alike.

Fundamental
Overview

The USD has had some mixed
performance since the tariffs announcement although overall it’s been
marginally stronger except against the safe havens like the Swiss Franc and the
Japanese Yen. There’s no real divergence in FX as the market continues to price
in more and more cuts for all the central banks.

At the moment, the market
is more driven by the risk-off sentiment amid the recessionary fears. Traders are
now fully pricing five rate cuts for the Fed by year-end with 60% chance of a
25 bps cut at the upcoming FOMC meeting despite Fed Chair Powell saying that
they are not in a hurry to cut rates.

On the JPY side, the
currency has been driven mainly by global events rather than domestic
fundamentals. The global stock market selloff and the growth fears made the
market to scale back rate hikes expectations with the BoJ now seen on hold for
the rest of the year.

The Japanese Yen continues
to remain supported amid the risk-off flows as the carry trades get unwound.

USDJPY
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDJPY is consolidating around the lows. The sellers will likely
continue to pile in around these levels with a defined risk above the 146.60
level to keep pushing into the 140.00 handle. The buyers, on the other hand,
will want to see the price rising back above the 146.60 level to start
targeting the 148.60 level next.

USDJPY Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the recent price action with the fakeout above the 146.60
level last Friday that was quickly reversed as the pair gapped lower at the
open today. The price action remains rangebound between the 145.18 support
and the 146.60 resistance. The market participants will look for a break on
either side to pile in with more conviction and extend the moves.

USDJPY Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the buyers will look for a break above the
146.60 level, while the sellers will target a break below the 145.18 level.. The
red lines define the average daily range for today.

Upcoming
Catalysts

This week is going to be all about tariffs
news ahead of the April 9 deadline, so the data won’t matter much. Nevertheless,
we will get a couple of notable data releases. On Thursday, we get the US CPI
report and the latest US Jobless Claims figures, while on Friday we conclude
the week with the US PPI and the University of Michigan Consumer Sentiment
survey.

Watch the video below

Fundamental
Overview

The USD sold off hard almost
across the board following Trump’s worse than expected tariffs announcement on
Wednesday. The market reacted to the news by pricing in aggressively more rate
cuts for the Fed in expectations of a bigger hit to the US economy compared to
the rest of the world.

At the moment, the market
is seeing 100 bps of easing by year end and 35% chance of a rate cut at the
upcoming meeting. Today we have the NFP report and especially Fed Chair Powell
speaking. These two events will shape the expectations further, especially
Powell’s speech.

On the JPY side, the
currency has been driven mainly by global events rather than domestic
fundamentals as the market even scaled back rate hikes expectations with just 7
bps of tightening seen by year end compared to 31 bps before Trump’s
announcement.

The Japanese Yen got a
boost from the risk-off flows triggered by Trump’s announcement which saw the
US Treasury yields falling as the market started to price in more and more rate
cuts from the Fed amid recessionary fears.

USDJPY
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDJPY couldn’t break above the key 151.00 resistance
and eventually sold off hard following the surprising worse than expected Trump’s
tariffs announcement.

We are now trading below
the March low, and the sellers will likely continue to pile in around these
levels to keep pushing into the next support around the 140.00 handle. The
buyers, on the other hand, will want to see the price rising back above the 146.60
level to start targeting a pullback into the 148.60 level next.

USDJPY Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the recent price action with the big selloff following Trump’s
announcement. We can see that the pair is now consolidating between yesterday’s
low and the March low at 146.60. The buyers will look for a break higher to
position for a pullback into the 148.60 level next, while the sellers will look
for a break lower to increase the bearish bets into the 140.00 handle.

USDJPY Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as we will likely continue to consolidate until
the NFP report and Fed Chair Powell speech. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US NFP
report and Fed Chair Powell speech.

Watch the video below

Fundamental
Overview

The USD has been marginally weaker recently due to lower than expected
US inflation figures last week that sent Treasury yields lower and made the market
to price in higher chances of a second rate cut by the end of the year.

Yesterday, the greenback weakened across the board following a WSJ report saying that Trump would lay out the trade vision but won’t impose
tariffs yet. Tonight though, he spoke to the media and said that he intends to impose 25% tariffs on Canada and Mexico next week. Following
the news, the US Dollar erased almost all the losses from the prior day.

On the JPY side, nothing
has changed as the market still expects a 25 bps rate hike at this week’s
meeting following last week’s BoJ Ueda’s comments. The yen has been stronger
against the other major currencies though due to the risk off caused by the
tariffs comments.

USDJPY
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDJPY broke out of the recent consolidation and it’s now approaching
the major trendline. From a risk management perspective, the buyers will have a
better risk to reward setup around the major trendline to position for a rally into the
160.00 handle. The sellers, on the other hand, will look for a break below the
trendline to extend the drop into the 149.00 handle next.

USDJPY Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have now a downward trendline defining the current bearish momentum
on this timeframe. The sellers will likely lean on the trendline to position
for a drop into the major trendline. The buyers, on the other hand, will want
to see the price breaking higher to start targeting the 160.00 handle.

USDJPY Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the sellers will look for a rejection from the
trendline, while the buyers will look for a break above it. The red lines
define the average daily range for today.

Upcoming
Catalysts

This week is pretty empty on the data front with just a couple
of key releases scheduled for the latter part of the week. On Thursday, we get
the latest US Jobless Claims figures, while on Friday we conclude the week with the
Japanese CPI, the BoJ Rate Decision and the Flash PMIs.

Watch the video below