Markets Analysis

Fundamental Analysis

• US Retail Sales Outperform Market Expectations, Making Economic Downturn Challenging
• Expectations for US Rate Cuts Postponed, November Rate Cut Likelihood Falls Below 100%
• USDJPY Breaks Through 154 JPY, Aiming for 155 JPY

USDJPY technical analysis

Analyzing the daily chart of USDJPY, which is exceeding the +2σ line of the Bollinger Bands, currently hovering around 154.15 JPY. Recent US economic indicators continuously surpass market forecasts, illustrating the difficulty in tempering the economy.

This implies that the market environment is not conducive to rate cuts; hence, continued high-interest rates will not halt a weakening JPY against a strengthening USD. Even if the government attempts verbal interventions to curb JPY depreciation, it would be natural to think that actual foreign exchange intervention is difficult if it aligns with fundamentals.

USDJPY is considered pivotal at 155 JPY. There was no sudden touch to 152 JPY when it was around 152 JPY previously. Similarly, strong selling pressure from profit-taking or contrarian positions is expected just before 155 JPY.

USDJPY’s daily RSI stands at 71, indicating the possibility of a pullback. The ADX shows a strong and sustained trend.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of USDJPY, which has broken upward through a broadening triangle, temporarily reaching 154.44 JPY. After rising to 154.40 JPY, it slightly corrected, then fell to 153.80 JPY. However, there’s strong buying interest, with the closing price in the 154 JPY range.

The ADX indicates a strong trend level below 30, and +DI has also declined. The anticipated resistance and support levels are 154.65 JPY and 153.40 JPY, respectively.

It is challenging to predict future movements, but strong selling pressure is expected in the late 154 JPY range, with strong buying interest around 153.40 JPY.

The day trading strategy would be to enter a sell at 154.60 JPY, place a stop at 154.90 JPY, and take profit at 154.0 JPY. Alternatively, enter a buy at 153.45 JPY, stop at 152.95 JPY, and take profit at 154.0 JPY.

Support/Resistance lines

Key resistance line: 154.65 JPY

Key support line (monthly): 153.40 JPY

Market Sentiment

USDJPY Sell: 82%, Buy: 18%

Featured Currency Pair of the Week (AUDJPY)

On April 15, it rose to 100 JPY but faced strong selling pressure and fell back. It is currently hovering around 99.25 JPY. The Australian Dollar (AUDUSD) has declined and broken out of its range. This is expected to impact AUDJPY, which is likely to fall today. USDJPY’s momentum has slowed, and further gains are not highly anticipated.

AUDJPY’s movements are likely to follow those of AUDUSD, with an expected move towards 98.60 JPY. If setting a day trading strategy, one might consider entering a sell at 99.40 JPY, placing a stop at 99.65 JPY, and taking profit at 98.65 JPY.

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.