USDJPY Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as
  expected at the last meeting while dropping the tightening bias in the
  statement but adding a slight pushback against a March rate cut.
• The US CPI beat
  expectations for the second consecutive month with the disinflationary trend
  reversing.
• The US PPI beat
  expectations across the board by a big margin.
• The US Jobless Claims beat
  expectations with the data remaining steady.
• The latest US PMIs
  increased further from the prior month with the Manufacturing PMI beating
  expectations and the Services PMI missing.
• 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

On the daily chart, we can see
that USDJPY is getting closer and closer to the cycle high around the 151.90
level. We’ve been stuck in a consolidation since the hot US CPI release and
despite more strong US data, the pair hasn’t managed to sustain a rally. We can
see that we have a trendline defining
the current uptrend and we can expect the buyers to lean on it to position for
a rally into the cycle high. The sellers, on the other hand, will want to see
the price breaking lower to position for a drop into the 148.80 support.

USDJPY
Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the recent
price action formed what looks like a symmetrical triangle. The
price broke to the upside yesterday and the buyers piled in to target the cycle
high. We might see a retest of the broken upper trendline before the rally but
if that won’t be the case, the buyers will still have another opportunity at
the major trendline.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a minor upward trendline now where we can also find the 61.8% Fibonacci
retracement level for confluence. In
case we see a pullback from these levels, this is where we can expect the
buyers to step in with a defined risk below the trendline to position for the
rally into the cycle high. Alternatively, the buyers will increase the bullish
bets in case we get a break of the 150.70 high in the next days.

See the video below