USDJPY Technical Analysis | Forexlive

USD

The Fed left interest rates unchanged as
expected while dropping the tightening bias in the statement but adding a
slight pushback against a March rate
cut.
Fed Chair Powell stressed
that they want to see more evidence of inflation falling back to target and
that a rate cut in March is not their base case.
The US CPI beat
expectations for the second consecutive month with the disinflationary trend
reversing.
The US Initial Claims beat
expectations while Continuing Claims missed. Overall, the data remains steady.
The ISM Manufacturing
PMI
surprised to the upside with the new orders index, which is considered a
leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat
expectations across the board with the employment sub-index erasing the prior
drop and prices paid jumping above 60.
The US Retail Sales missed
expectations across the board by a big margin.
The market now expects the first rate cut in June.

JPY

The BoJ kept its monetary policy unchanged as expected with interest rates at
-0.10% and the 10 year JGB yield target at 0% with 1% as a reference cap.
The Japanese CPI eased further across all measures
which makes it even harder to expect a rate hike from the BoJ anytime soon.
The latest Unemployment Rate ticked lower hovering around cycle
lows.
The Japanese PMIs improved for both the Manufacturing
and Services measures although the former remains in contractionary territory.
The Japanese wage data missed expectations again recently
although there was a pick up from the prior reading.
The Tokyo CPI, which is seen as a leading
indicator for National CPI, fell much more than expected recently.
The market expects the BoJ to hike
rates in Q2.

USDJPY Technical Analysis –
Daily Timeframe

USDJPY Daily

On the daily chart, we can see
that USDJPY is getting closer to the cycle high around the 151.90 level. From a
risk management perspective, the buyers will have a much better risk to reward
setup around the trendline where
they will also find the confluence with the
148.80 support, the red
21 moving average and the
38.2% Fibonacci retracement level.
The sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and position for a drop into the 146.60 level.

USDJPY
Technical Analysis – 4 hour Timeframe

USDJPY 4 hour

On the 4 hour chart, we can see that the price
yesterday broke below the minor upward trendline that was defining the strong
upward momentum. This might be a sign of a bigger pullback to come which should
resolve right around the 148.80 support zone. We can expect the sellers to step
in here with a defined risk above the trendline to position for a drop into the
support.

USDJPY Technical Analysis –
1 hour Timeframe

USDJPY 1 hour

On the 1 hour chart, we can see that we
have a counter-trendline that is defining the pullback into the downward
trendline. A break below the counter-trendline should see the sellers to
increase the bearish bets into the support. The buyers, on the other hand, will
want to see the price breaking above the downward trendline to pile in and
target the cycle high around the 151.90 level.