Markets Analysis

Fundamental Analysis

• Iran declares the end of its retaliatory operation against Israel with minimal damage.
• Despite rising risk aversion, there is no buying of JPY, and the dollar strengthens.
• Gold rises to 2430 USD but then falls back, forming a top wick.

USDJPY technical analysis

Analyzing the daily chart for USDJPY, it is trading around 153.40 JPY. Over the weekend, Iran directly attacked Israel, increasing geopolitical risks, but Iran has declared the operation over.
For now, a full confrontation seems to be avoided. However, the situation remains unstable, and risk-averse moves are becoming more apparent. The Forex market is moving towards a stronger dollar, and USDJPY has stopped falling below the 153 JPY range. There is a significant resistance line at 153.40 JPY, and an adjustment could happen.
U.S. stock prices have significantly dropped, and as May approaches—commonly referred to as “Sell in May”—the upward trend is adjusting.

Day trading strategy (1 hour)

Analyzing the 1-hour chart for USDJPY, it is forming an expanding triangle. This pattern indicates instability in the market and, if it occurs mid-uptrend, typically results in a breakout of the upper line.
The rise in geopolitical risks and the delay in the timing of U.S. rate cuts suggest that the strong dollar will not stop soon. USDJPY is expected to eventually target 155 JPY. However, some consolidation is likely to continue for a while.
The day trading approach would be to buy on dips. Entry is planned around 152.75 JPY, with a target of 153.35 JPY. The stop would be around 152.45 JPY.

Support/Resistance lines

Future consideration for support and resistance lines are as follows:

153.40 JPY – A monthly resistance line/recent high

Market Sentiment

USDJPY Sell: 77% Buy: 23%

Featured Currency Pair of the Week (AUDJPY)

AUDJPY rebounds at 98.85 JPY. The 1-hour chart shows an expected return to the 28-moving average line at 99.50 JPY. The resistance line at 100 JPY is strong, but it may eventually breakout.
Attention should be paid to whether it will fall back from the 28-moving average line. If it does, it might drop to 98.60 JPY.

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