USDJPY Briefly Drops below 153 JPY, Chair Powell Comments on Low Probability of Rate Hike【May 2, 2024】
Fundamental Analysis
Fed Chair maintains dovish stance, hints at delayed timing for rate cuts
Anticipated rate hikes deemed unlikely, leading to USD selling
US crude oil inventories increase, resulting in a sharp drop in oil prices
USDJPY technical analysis
Examining the daily chart of USDJPY, it fell sharply following a press conference by Chair Powell, breaking below the 23.6% Fibonacci level, and temporarily dipping below 153 JPY.
The 28-day moving average will be a focus, with the next support level expected around the 38.2% Fibonacci retracement at approximately 152.50 JPY. The 152.26 JPY level serves as a major support line on both weekly and daily charts, and the early 152s appear solid, potentially requiring time to breach.
The short to medium-term trend is shifting, and a one-sided strategy favoring JPY weakness could backfire. A technical pause in the uptrend is anticipated, with corrective movements expected.
Day trading strategy (1 hour)
Analysis of the 1-hour chart of USDJPY shows a significant rebound at the 61.8% Fibonacci expansion. After breaking below the 240-moving average at 153 JPY, short covering brought it up to 154.38 JPY, and it is currently at 155.30 JPY.
Due to the steep decline breaking the -3σ line of the Bollinger Bands, a return to the 240-moving average could be possible. Attention is on whether this line will act as resistance; if so, a decline to 152.26 JPY, corresponding to 100%, might occur. Here, selling on the rebound near the 240-moving average is considered.
Entry strategy would be selling at 155.85 JPY, first take-profit at 154.50 JPY, and second take-profit at 152.50 JPY. The stop would be set if it exceeds the 240-moving average at 156.15 JPY.
Support/Resistance lines
The following are key support and resistance levels to consider:
154.38 JPY – 61.8% Fibonacci Expansion
152.26 JPY – Major weekly and daily support line
Market Sentiment
USDJPY: 69% selling, 31% buying
Featured Currency Pair of the Week (EURCHF)
EURCHF continues to rise. The 28-day moving average is acting as support, reaching up to 0.9835 CHF. While it has not touched 0.9850 CHF yet, surpassing it seems only a matter of time. Although the EUR was more frequently sold than the CHF at one point, it is now strengthening again.
Analyzing long-term trends, the EUR is clearly more often bought than the CHF, suggesting that EURCHF is likely to rise. Whether it surpasses 0.985 CHF remains a focal point, deserving continued attention.
Today’s important economic indicators
Economic indicators and eventsJapan timeMinutes of Japan’s Monetary Policy Meeting08:50Swiss Consumer Price Index15:30US Unemployment Claims21:30
*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.
Risk Disclaimer
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
