USDJPY Technical Analysis | Forexlive

USD

JPY

• 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 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 managed to retest the cycle high at 151.90 before falling back to
the 150.00 handle following the miss in the US CPI report. The US data has been
deteriorating pretty fast recently and that could mark the top for the pair.
The big divergence with the
MACD is
pointing to a correction into the major trendline around the 146.00 level and
given the selloff in Treasury yields, it’s highly likely that we will see the
pair falling further.

USDJPY
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that USDJPY sold
off yesterday following the miss in the US Jobless Claims figures and after a
brief consolidation, the pair this morning broke through the trendline. This is
another confirmation that the bearish momentum is gathering pace, and the
sellers will start to gain even more conviction for a drop towards the 146.00
level.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
selloff got a bit overstretched as depicted by the distance from the blue 8 moving average. In
such instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

In this case, if we get a pullback, the
sellers are likely to lean on the downward trendline where they will also find
the confluence with
the red 21 moving average and the previous swing level. The buyers, on the
other hand, will want to see the price breaking above the trendline to
invalidate the bearish setup and position for a rally into the highs.