USDJPY Technical Analysis | Forexlive

USD

The Fed left interest rates unchanged as
expected at the last meeting and dropped the tightening bias in the statement.
The US CPI and
the US PPI beat
expectations for the second consecutive month.
The NFP report beat
expectations on the headline number, but the unemployment rate and the average
hourly earnings missed notably. Moreover, the US Jobless Claims
yesterday beat expectations across the board with a big positive revision to
Continuing Claims.
The latest US ISM
Manufacturing PMI missed expectations by a big margin
remaining in contraction with the US ISM Services
PMI
following suit but holding on in expansion.
The US Retail Sales missed
expectations across the board although the data improved from the prior month.
The market expects the first rate cut in June.

JPY

The BoJ kept its monetary policy unchanged as expected at the last meeting
with interest rates at -0.10% and the 10 year JGB yield target at 0% with 1% as
a reference cap.
The last Japanese CPI beat expectations although all
measures eased further from the prior readings.
The latest Unemployment Rate remained unchanged 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 beat expectations by a big margin
raising the odds of an earlier than expected BoJ exit from negative rates.
The Tokyo CPI, which is seen as a leading
indicator for National CPI, recently came in line with expectations with the
measures increasing from the prior report.
The market sees a 50/50 chance that
the BoJ hikes rates in March.

USDJPY Technical Analysis –
Daily Timeframe

USDJPY Daily

On the daily chart, we can see
that USDJPY bounced on the key 146.60 level and pulled back into the 148.80
level following strong US data releases. We can notice that we have also the confluence of the
50% Fibonacci retracement level
and red 21 moving average around
this level. This is where we can expect the sellers to step in with a defined
risk above the level to position for a drop into new lows. The buyers, on the
other hand, will want to see the price breaking higher to invalidate the
bearish setup and position for a rally back into the highs.

USDJPY
Technical Analysis – 4 hour Timeframe

USDJPY 4 hour

On the 4 hour chart, we can see that we have a
counter-trendline where we
can find the confluence with the 61.8% Fibonacci retracement level and the red
21 moving average. This is where we can expect the buyers to step in with a
defined risk below the trendline to position for a break above the 148.80 level
with a better risk to reward setup. The sellers, on the other hand, will want
to see the price breaking lower to invalidate the bullish setup and increase
the bearish bets into new lows.

USDJPY Technical Analysis –
1 hour Timeframe

USDJPY 1 hour

On the 1 hour chart, we can see more
closely the recent price action with all the key levels marked on the chart.
There’s not much else to do here other than waiting for the setups to work out.