USDJPY Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as expected at the last meeting, with virtually no change in its statement. The Dot Plot showed three more rate cuts for 2024 and the economic projections were improved with higher growth and inflation and lower unemployment.
• The US CPI beat expectations for the third consecutive month, while the US PPI was in line with forecasts.
• U.S. NFP beat expectations across the board, although average hourly earnings were in line with forecasts.
• The US ISM Manufacturing PMI significantly exceeded expectations, as the price component continued to rise, while the US ISM Services PMI missed expectations, with the price index falling to a 4-year low.
• U.S. retail sales far exceeded expectations across the board, with positive revisions from previous figures.
• The market now expects a first rate cut in September.

JPY

• The BoJ finally ended its negative interest rate policy, as expected at the last meeting, by raising interest rates by 10 basis points, bringing the rate back to a target of between 0.00 and 0. .10%. Additionally, the central bank abandoned yield curve control and ETF purchases, while maintaining QE.
• The latest unemployment rate fell short of expectations, although it continues to hover around cycle lows.
• Japanese PMIs have further improved for both manufacturing and services measures, although the former remain in contraction territory.
• The latest Japanese salary data is in line with expectations.
• Japan’s CPI came in line with expectations.
• The market expects another rate hike from the BoJ this year, although the timing remains uncertain.

USDJPY Technical Analysis – Daily Time Frame

On the daily chart, we can see that USDJPY remained stuck in some consolidation just below the 155.00 mark as the market may wait for a new catalyst to reach new highs. From a risk management perspective, buyers will have a much better risk to reward setup around previous resistance turned support where one can also find the trendline confluence and Fibonacci retracement level of 38.2%. Sellers, on the other hand, will want to see the price move lower to invalidate the bullish setup and position themselves for a decline into the next major trendline around the 146.00 handle.

USDJPY Technical Analysis – 4 hour time frame

On the 4-hour chart we can see that we have another trendline for buyers to rely on in the event of a pullback, where they will also find the 38.2% Fibonacci retracement level for the confluence. Sellers, on the other hand, will want to see the price move lower to position themselves for a fall into the 151.92 support area and then target a break below.

USDJPY Technical Analysis – 1 Hour Timeframe

On the hourly chart, we can take a closer look at price action in a range between support at 153.90 and resistance at 154.80. We saw a downward spike tonight following Israeli retaliation against Iran, but that move was completely erased when Iran downplayed airstrikes. We could now continue to see the market play the range with selling pressure around resistance and buying pressure around support until we get a catalyst for a breakout.

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