Markets Analysis

Fundamental Analysis

• U.S. ISM Manufacturing Index falls short of market expectations; renewed fears of economic deterioration weakens dollar
• Major U.S. stock indexes slightly lower, low volatility market continues
• Australian policy rate is scheduled to be released today; no rate hike is expected
• USD/JPY rallied to JPY 140.48 but fell back after the ISM index release, hovering in the low JPY 139 range

Day Trade Strategy (Hourly)

The day-trade policy is range trading. The reaction to the Fibonacci level can be seen.
JPY 139.37 corresponds to 61.8% and rebounded once. However, a break out of this price range could lead to a decline to around JPY 138.75. The atmosphere is likely to be that of an adjustment market to await next week’s FOMC and BOJ policy meeting.

Fibonacci Levels

The price fell back 23.6% at JPY 140.48 and rebounded 61.8% to JPY 139.37. It can be concluded that the downward trend is continuing in the short term. If the price falls below JPY 138.37, we should watch for a decline to JPY 138.97 and JPY 138.75, the prices of major support zones.

Candlesticks

Looking at the candlesticks, we can see long beards to the upside and wrapping legs at the highs, suggesting that the upside is heavy.

Support and Resistance Lines

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

JPY 139.37 – Fibonacci level
JPY 138.75 – Lower limit of the past range price

Market Sentiment

USDJPY Sell: 68% Buy: 32%

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.