USDJPY Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as
  expected with basically no change to the statement. The Dot Plot still showed
  three rate cuts for 2024 and the economic projections were upgraded with growth
  and inflation higher and the unemployment rate lower.
• Fed Chair Powell
  maintained a neutral stance as he said that it was premature to react to the
  recent inflation data given possible bumps on the way to their 2% target.
• The US CPI and
  the US PPI beat
  expectations for the second consecutive month.
• The US Jobless Claims beat
  expectations across the board.
• The latest US Manufacturing
  PMI
  beat expectations while the Services PMI missed slightly. Both the measures
  remain in expansion though.
• The market expects the first rate cut in June.

JPY

• The BoJ finally exited the negative interest rates
  policy as expected
  raising interest rates by 10 bps bringing the rate to a target between
  0.00-0.10%. Moreover, the central bank scrapped the yield curve control and the
  ETF purchases, while maintaining QE in place as expected.
• The latest Unemployment Rate remained unchanged hovering around
  cycle lows.
• The Japanese PMIs improved further for both the
  Manufacturing and Services measures although the former remains in
  contractionary territory.
• The Japanese wage data beat expectations by a big margin
  which then led to the rate hike from the BoJ.
• The Japanese CPI came in line with expectations.
• The market expects another rate hike
  from the BoJ this year although the timing remains uncertain.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see
that USDJPY is trading just beneath a crucial resistance level at
151.92. In fact, we can notice that the pair has formed a big ascending triangle and a
break above the resistance could trigger a strong move to the upside. We can
expect the sellers to step in around these levels with a defined risk above the
resistance to position for a drop all the way back to the bottom trendline of the
triangle. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets and target new highs.

USDJPY
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a
trendline defining the current uptrend where we can also find the confluence with the
red 21 moving average. If we
get a pullback into the trendline, we can expect the buyers to step in with a
defined risk below it to position for a break above the resistance 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

On the 1 hour chart, we can see that we
also have two key Fibonacci
retracement levels adding some extra confluence for
the buyers. We can also notice that the price action might be forming two
different chart patterns: a double top at the resistance and another ascending
triangle defined by the trendline. This should make a breakout on either side
even more important and will likely trigger a strong reaction.

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