Dollar-Yen Continues to Fall as Speculation Grows on the End of US Rate Hike Cycle【November 3, 2023】

Fundamental Analysis

• US stock indices rise, US Federal Reserve suggests end of rate hike cycle.
• US unemployment insurance claims increase for the 6th consecutive week, labor market further contracts.
• Dollar weakens with USD/JPY trading in the mid-150 JPY range, 24MA serves as a support line.

USDJPY Technical Analysis

Analyzing the daily chart for USD/JPY. The US Federal Reserve hinted at the end of the rate hike cycle, leading to a stronger dollar bearish trend, causing the USD/JPY to drop temporarily to the 149.85 JPY level. However, there has been short covering, pushing it up to the mid-150 JPY range.

While the price has been gradually hitting new highs, the RSI value remains within the range and hasn’t been able to renew its peak. In October, there was a sharp drop in USD/JPY, but it has been confirmed that no foreign exchange intervention took place. The Finance Minister used the term “standby”, intensifying concerns about potential foreign exchange interventions.

Day Trading Strategy (Hourly)

Analyzing the 1-hour chart for USD/JPY. USD/JPY tends to react strongly to Fibonacci retracements, and it’s being monitored closely now. It responded at 61.8% and is above the 24 moving average. In addition to the Fibonacci retracement, the 240 moving average is also being watched.

If it exceeds 38.2%, there’s potential to aim for 23.6%. However, it’s unclear how far the rise will continue due to concerns about foreign exchange intervention. Day trading may be challenging, but there appears to be a slight bullish trend. For short-term trading, one would want to have a bullish view.

Specifically, one would want to enter a buy position at the 24 moving average or the 10 moving average and settle around the 151 JPY level. As it’s uncertain where the foreign exchange intervention might come in, setting a stop-loss is essential.

Support and Resistance Lines

The resistance line to be considered in the future is as follows

150.59 JPY – Major resistance line.
150.25 JPY – Major support line.

Market Sentiment

USDJPY　Sell: 79% Buy: 21%

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.