USD/JPY Technical Analysis | Forexlive
On the daily chart below, we can
see that after breaking out of the 134.50 resistance, the buyers push the price to
the 138.00 handle. The recent push higher comes after the Fed
Chair Powell opened the door for a 50bps hike and a higher terminal
rate.
The USD/JPY pair is correlated
with US Treasury yields, so when we see the market
pricing in a more hawkish Fed, we can also see Treasury yields rise and
ultimately push the pair higher.
The market will now look at the NFP report on Friday and if the data beats
expectations, we are likely to see more upside for the pair, on the other hand,
in case we get a miss, we will probably see a strong pullback.
On the 4 hour chart below, we can
see that the top trendline is generally where we find
sellers. So, we may expect that we will find them again leaning on that top
trendline unless the US data comes out hot and the buyers just absorb any
selling pressure.
After yesterday’s Powell event
though, the price got a bit overextended as depicted by the distance between
the price and the blue short period moving
average. Generally, the price either consolidates or pulls back a bit to get
things more in equilibrium.
On the 1 hour chart below, we can
see that if we were to get a pullback, the price is likely to retrace back to
the 137.00 handle where we can find confluence of a previous resistance now
turned support, the 38.2% Fibonacci
retracement level and the red long period moving average. This
is where we will most likely find strong buyers positioning into the NFP
report.