Will USDJPY Recover 150 JPY? Potential for a Slower US Rate Cut Pace than Expected【October 10, 2024】
Fundamental Analysis
The FOMC minutes reveal that Chairman Powell is leading a significant rate cut.
Some members support a more gradual cut. Today’s focus is on the US CPI.
USDJPY technical analysis
We analyze the daily chart of USDJPY. The pair is currently encountering the 90-day moving average. It has surpassed the 100% Fibonacci expansion level and the recent high. Breaking above the recent high indicates the emergence of an uptrend.
Currently, the price is moving within the Ichimoku Cloud, meaning there’s still a risk of reversal. However, with the possibility of a slower rate cut pace than expected, US interest rates are rising. Today’s US CPI report will likely be the key focus.
If the CPI surpasses expectations, a significant rate cut by year-end will become even more difficult, and USDJPY may seriously aim for 150 JPY. If it falls short of expectations, a correction is more likely, with a risk of the pair falling to the low 147 JPY range.
Day trading strategy (1 hour)
We analyze the 1-hour chart of USDJPY. Looking at the 1-hour RSI, a divergence has emerged, suggesting that bullish momentum is weakening, and the market may enter a corrective phase. With the US CPI upcoming, significant movements may be hard to anticipate, and a gradual decline to the mid-148 JPY range is possible.
Since the US CPI is in focus more than expected, today’s day trading requires careful attention.
As a strategy, if the CPI exceeds expectations, we consider a scenario where USDJPY targets 150 JPY, making dip-buying the strategy of choice. If the CPI falls short of expectations, we anticipate a decline to the low 147 JPY range and adopt a dip-buying approach. Depending on the results, we recommend either waiting or focusing solely on scalping throughout the day.
Support/Resistance lines
Here are the key support and resistance levels to consider moving forward:
- 148.50 JPY: 100% Fibonacci Expansion
Market Sentiment
USDJPY Sell: 32% / Buy: 68%
Today’s important economic indicators
Economic indicators and eventsJapan timeUS Consumer Price Index (CPI) Forecast: +2.3% YoY21:30US Initial Jobless Claims21:30Speech by FOMC Member Williams00:00 (Midnight)
*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.
