Fundamental Overview
Yesterday, we got some strong US data as the Jobless Claims and Retail Sales figures came out much better than expected. All the major currencies gained against the Yen for two main reasons.
The first is that yields rose across the board as the market continues to price out the aggressive rate cuts expectations for the Fed and the Japanese officials won’t tighten policy again at least until 2025 given the recent volatility. The other reason is that the positive risk sentiment favours higher yielding currencies.
USDJPY Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDJPY is now trading right around the broken trendline around the 149.00 handle. The sellers will likely step in around these levels to position for a drop into the 140.00 handle, while the buyers will want to see some more upside to keep piling in for new highs.
USDJPY Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is breaking above the major downward trendline. The buyers are likely to pile in here to position for an extension of the rally into the 152.00 handle. The sellers, on the other hand, will want to see the price falling back below the trendline to position for a drop into the 140.00 handle.
USDJPY Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we got the breakout of the recent range between the 146.00 support and the 148.00 resistance. If the price were to turn around to retest the resistance now turned support, the buyers will likely step in around the 148.00 handle where they will also find the upward minor trendline for confluence.
The sellers, on the other hand, will want to see the price breaking below the trendline to increase the bearish bets into the 140.00 handle. The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude the week with the University of Michigan Consumer Sentiment survey.
