Trump Administration’s Tariff Policy Sparks Market Fluctuations, Leading to Sharp USD Depreciation【January 7, 2025】

Fundamental Analysis

• Reports suggest the Trump administration plans to limit tariff application to certain imports.
• Trump denied these claims on social media, stating there are no plans to limit tariffs.
• The forex market experienced sharp USD depreciation temporarily but later stabilized.

USDJPY Technical Analysis

USDJPY briefly dropped to the 156.20 JPY level but rebounded due to dip buying. It has since broken above the high of 158.08 JPY and is trading around 158.12 JPY. The focus is now on whether it can decisively break out of the range-bound market. With the RSI at 66, there seems to be room for further upward movement.

If USDJPY breaks above the lower 158 JPY range, it could target the 159 JPY level, with 159.25 JPY as the projected high. A test of the 160 JPY level is also on the horizon.

The conversion line is acting as support. As long as it stays above this line, an upward trading bias remains intact.

Day trading strategy (1 hour)

n analysis of the USDJPY 1-hour chart reveals that the pair, previously in a narrow range, is now seeing the start of full-fledged New Year trading. The weak JPY and strong USD trend remains unchanged, with USDJPY breaking above the range high of 158.08 JPY and continuing its ascent.

The price is above the pivot point, suggesting a bullish outlook. Resistance levels are identified at 158.39 JPY and 159.09 JPY, which align with the pivot levels.

Trading Approach:
The strategy is to buy on confirmation that 158.08 JPY has turned into support. Take-profit is set at 159.25 JPY, with a stop-loss at 157.75 JPY.

Support/Resistance lines

Key support and resistance lines to consider:

• 159.25 JPY: Fibonacci level
• 159.08 JPY: Range high

Market Sentiment

USDJPY Sell: 69% Buy: 31%

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.