Markets Analysis

Fundamental Analysis

• Major U.S. Stock Indexes Rise, Favorable Fundamentals on Expectations of Rate Hike Halt
• U.S. Consumer Price Index falls short of market expectations, slowing inflation a rationale for rate hike halt
• Fed Chair Jerome Powell’s comments on future rate hikes will be closely watched
• Gold plunges, rises on expectations of a rate hike halt, but fails to break above the USD 1970 resistance zone

USDJPY Technical Analysis

Although the dollar dropped to the JPY 139 level after the release of the CPI, it quickly rose to the JPY 140 level during the New York session due to push-back buying. It should be noted that the upper line, which formed a triangle, was broken through. As today is just before the FOMC meeting, trading volume in the Asian and London markets is expected to decline.

Day Trade Strategy (Hourly)

The direction of the dollar-yen will depend on the FOMC, but with Chairman Powell supporting the suspension of interest rate hikes, it is extremely likely that they will be suspended this time. With the BOJ policy meeting also coming up this week, the dollar/yen is likely to take a cautious stance.

However, we suspect that the directional trend is upward. We expect strong resistance zones at JPY 140.25 and JPY 140.45, which are prices that we have been aware of in the past.

Under normal circumstances, this would be significant volatility immediately after the FOMC meeting. The maximum downside could be as low as JPY 139.0 and the maximum upside could be as high as JPY 142.35. Careful attention should be paid to positions held.

Support and Resistance Lines

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

Major resistance zone – 140.450

Market Sentiment

USDJPY　Sell: 72% Buy: 28%

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.