USD/JPY Technical Analysis | Forexlive
On the daily chart below, we can
see that the buyers are trying hard to defend the 133 handle as depicted by the
long candlesticks wicks.
The technicals and the
fundamentals are working against the buyers at the moment though. The moving
averages have crossed to the downside, which may be an early signal of a change
in trend.
The Treasury yields keep falling
as the market is expecting the Fed to stop its tightening cycle soon and
deliver rate cuts earlier than expected.
The market will now look at the
FOMC meeting next week and the economic data to decide if the trend is indeed
downwards now or the market overreacted to the banking ”crisis”.
On the 4 hour chart below, we can
see that the selling momentum is weakening as shown by the divergence between the price and the MACD right at the 133 support.
We have also the support from the
50 and 61.8% Fibonacci
retracement levels of the entire upward move since the
gamechanger February NFP report. The sellers may now try another push lower
towards the 61.8% level expecting a dovish Fed.
On the 1 hour chart below, we can
see that the price may be forming a falling
wedge pattern. This is generally a reversal pattern, so the buyers will look
for the price to break above the blue trendline to start piling in with more
conviction.
We may get another push lower
from the sellers as the Fed next week is expected to hike by just 25 bps
instead of the 50 bps that the market was fearing just a week ago. If the Fed
delivers a hawkish 25 bps hike or even surprises with a 50 bps move, then we
may see a quick rally in the pair. Otherwise, the sellers will remain in
control.