USDJPY lacks clear direction, Powell’s hawkish speech as Fed Chair【October 1, 2024】

Fundamental Analysis

• Fed Chair Powell commented that there is no rush for a rate hike, which the market interpreted as hawkish.
• USDJPY rose to the upper 143 JPY range, possibly aiming to reach the 144 JPY level again.

USDJPY technical analysis

Analyzing the daily chart of USDJPY, the pair had declined to the lower 142 JPY range after a pullback at the 52-day moving average but rebounded after assessing Powell’s speech. The market remains undecided on direction.

Another Fed official hinted at the possibility of supporting a 0.50% rate cut in the November meeting, depending on the U.S. labor market. Thus, this week’s U.S. employment report will be key. The USDJPY pair may either test a break below 140 JPY or aim to retake the 145 JPY level, depending on the employment data.

At this stage, there is no clear direction. It is essential to watch whether the 52-day moving average continues to function as resistance.

Day trading strategy (1 hour)

Analyzing the 1-hour USDJPY chart, the RSI is above 50, indicating a bullish trend. Following Powell’s hawkish speech, the dollar is being bought back. It may be difficult to sell aggressively ahead of the U.S. employment report.

There is a possibility that the pair could recover to around 144.70 JPY, which corresponds to the 61.8% Fibonacci retracement.

The day trading strategy, while challenging, suggests short-term buying. Today, with an expected upward trend, the focus will be on short-term scalping trades, prioritizing buying.

Support/Resistance lines

The following support and resistance levels should be considered going forward:

144.54 JPY – 52-day moving average

Market Sentiment

USDJPY: Selling: 52% Buying: 48%

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.