Will USDJPY Recover 150 JPY? Potential for a Slower US Rate Cut Pace than Expected【October 11, 2024】

Fundamental Analysis

• The US CPI came in at +3.3% year-on-year, surpassing the forecast of +3.2%. Meanwhile, US Initial Jobless Claims hit their highest level in a year, posing challenges for the Federal Reserve’s policy direction.

USDJPY technical analysis

Analyzing the daily chart of USDJPY, the pair has hit the 90-day moving average and is now trading around the mid-148 JPY range. A statement from the Deputy Governor of the Bank of Japan on normalizing interest rates led to some JPY appreciation.

The rise in US Initial Jobless Claims, partly due to a hurricane making landfall in the US, has restrained the USD’s strength despite inflation exceeding expectations.

USDJPY remains within the Ichimoku Cloud, and the next focus will be whether it can break above the 90-day moving average. The downside targets are expected to be around 148.20 JPY, which is the recent low, and 147.20 JPY, which serves as a neckline.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of USDJPY, the pair initially surged to around 149.550 JPY right after the US CPI release, forming a long upper wick before declining. The 72 and 90 moving averages are acting as support levels.

Although inflation has increased, the rising jobless claims suggest that the Federal Reserve faces difficult decisions. This could lead to a cautious 0.25% rate cut.

The basic strategy remains to buy on dips, but if the pair drops below 148.20 JPY, we will close our long positions.

Support/Resistance lines

Here are the key support and resistance levels to consider moving forward:

• 149.550 JPY: Recent High
• 149.34 JPY: Previous High

Market Sentiment

USDJPY Buy: 36% Sell: 64%

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.