Fundamental
Overview
Yesterday, we got some
strong US data as the Jobless
Claims and Retail
Sales figures came out much better than expected. All the major currencies
gained against the Yen for two main reasons.
The first is that yields
rose across the board as the market continues to price out the aggressive rate
cuts expectations for the Fed and the Japanese officials won’t tighten policy again
at least until 2025 given the recent volatility. The other reason is that the positive
risk sentiment favours higher yielding currencies.
USDJPY
Technical Analysis – Daily Timeframe
USDJPY Daily
On the daily chart, we can
see that USDJPY is now trading right around the broken trendline around the 149.00 handle. The
sellers will likely step in around these levels to position for a drop into the
140.00 handle, while the buyers will want to see some more upside to keep
piling in for new highs.
USDJPY Technical
Analysis – 4 hour Timeframe
USDJPY 4 hour
On the 4 hour chart, we can
see that the price is breaking above the major downward trendline. The buyers
are likely to pile in here to position for an extension of the rally into the
152.00 handle. The sellers, on the other hand, will want to see the price
falling back below the trendline to position for a drop into the 140.00 handle.
USDJPY Technical
Analysis – 1 hour Timeframe
USDJPY 1 hour
On the 1 hour chart, we can
see that we got the breakout of the recent range between the 146.00 support and the 148.00 resistance. If the price were
to turn around to retest the resistance
now turned support, the buyers will likely step in around the 148.00 handle
where they will also find the upward minor trendline for confluence.
The sellers, on the other
hand, will want to see the price breaking below the trendline to increase the
bearish bets into the 140.00 handle. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we conclude the week with the University of Michigan Consumer Sentiment
survey.