USDJPY Technical Analysis | Forexlive

USD

JPY

• The BoJ kept its monetary policy basically unchanged at the last meeting but formally
  widened the YCC to 1% on the 10-year JGBs stating that it will be a reference
  cap.
• Governor Ueda repeated once again that they won’t
  hesitate to take easing measures if needed and that they are not foreseeing
  sustainable price increases.
• The Japanese CPIshowed that inflationary pressures
  remain high with the core-core reading hovering at the cycle highs.
• The latest Unemployment Rate remained unchanged near cycle lows.
• The Japanese Manufacturing PMI matched the prior reading remaining
  in contraction with the Services PMI falling but holding on in expansion.
• The latest Japanese wage data beat expectations. As a reminder
  the BoJ is focusing on wage growth to decide whether to tweak its monetary
  policy.
• The market expects the BoJ to keep
  interest rates unchanged at the next meeting as well.

USDJPY Technical
Analysis – Daily Timeframe

On the daily chart, we can see
that USDJPY rolled over exactly from the cycle high at 151.94 as the US data
showed more weakness, especially on the labour market side. The divergence with the
MACD was
already signalling that the momentum was weakening. In this case, the US data
was the catalyst for the correction lower. We can expect the sellers to target
the trendline around
the 146.00 level now which is also where the buyers are likely to pile in to
position for another rally targeting a break above the cycle high.

USDJPY
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price
bounced near the 147.00 handle and it looks like it’s heading for the 150.00
level again. That’s where we can expect the sellers to step in with more
conviction as they will have the confluence with the
trendline, the 61.8% Fibonacci retracement level
and the previous swing low. The buyers, on the other hand, will want to see the
price breaking above the trendline to increase the bullish bets into the cycle
high.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price recently diverged with the MACD near the 147.00 handle and as the moving averages
crossed over, the bias turned bullish with more buyers piling in to target a correction
into the 150.00 handle. We now have a minor trendline which will be key for
this correction. In fact, we can expect the buyers to lean on it in case the
price pulls back to position for the continuation of the rally into the 150.00 resistance. The
sellers, on the other hand, will want to see the price breaking lower to pile
in and target the 146.00 level.

Upcoming Events

Today we will get the latest US Jobless Claims report
which is probably going to be the most important release of the week. Tomorrow,
the US will be on holiday for Thanksgiving Day and therefore the liquidity in
the market will be thinner. On Friday, we conclude the week with the Japanese
CPI data and the US PMIs. Weak US data should be bearish for the USDJPY pair as
Treasury yields are likely to fall further. On the other hand, strong figures
should support the current correction and lead to new highs.

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