USDJPY Technical Analysis | Forexlive

US

• The Fed left interest rates unchanged as
  expected with basically no change to the statement.
• Fed Chair Powell stressed
  once again that they are proceeding carefully as the full effects of policy
  tightening have yet to be felt.
• The US Core PCE last
  week came in line with expectations.
• The labour market remains
  pretty resilient but we are starting to see some weakness as Jobless Claims missed
  expectations once again this week with Continuing Claims now rising at a fast
  pace.
• The US Consumer
  Confidence fell for the third consecutive month
  although the data beat expectations.
• The US ISM
  Manufacturing PMI this week missed expectations by a big
  margin.
• The market doesn’t expect the Fed to hike anymore.

Japan

• The BoJ kept its monetary policy basically unchanged 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 recent Japanese CPIshowed that inflationary pressures
  remain high with the core-core reading hovering at the cycle highs.
• The 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 missed expectations again which is
  unlikely to lead to a more hawkish BoJ in the near future.
• The Tokyo CPI, which is seen as a leading
  indicator for National CPI, beat expectations last week.
• 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 the USDJPY pair shoot higher following the disappointing BoJ policy
decision and came close to touch the cycle high around the 152.00 handle. The
price since then started to roll over as Treasury yields continued to fall
following weaker US data. We can also notice that the price continues to diverge
with the MACD,
which is a sign of weakening momentum often followed by pullbacks or reversals.
If the price falls below the 150.00 level, we can expect the sellers to
increase the bearish bets and target the major trendline around
the 146.00 level.

USDJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
yesterday bounced on the 150.00 level and pulled back into the support turned resistance around
the 150.60 level. The price is now rolling off again as it keeps a bearish
bias, but all eyes will be on the NFP report later today.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
now have two key levels to watch out for: the resistance zone around the 150.60
level and the support at the 150.00 level. A break above the resistance is
likely to open the door for a new high with the buyers increasing the bullish
bets. On the other hand, a break below the support should see more sellers
piling in to extend the drop into the trendline first, and upon a breakdown,
increase the bearish momentum into the 146.00 level.

Upcoming Events

Today, we conclude the week with the US NFP report
and the ISM Services PMI. If the data misses expectations, we should see more
downside for the USD as Treasury yields will likely fall further.

See the video below