Markets Analysis

Fundamental Analysis

• Major U.S. Stock Indexes Slightly Higher; Rate Hike Suspended but May Resume in the Future
• In his post-FOMC press conference, Chairman Powell noted that the July rate hike will depend on data
• Fed directors’ interest rate forecasts through year-end exceeded market expectations; dollar buying back up.
• BOJ policy meeting tomorrow; dollar/yen likely to be on an upward trend as status quo is expected to be maintained
• Gold rises briefly but falls to USD 1940 level

USDJPY Technical Analysis

Until yesterday’s FOMC meeting, the market was cautious and the dollar was range-bound, falling to the low JPY 139’s before the FOMC meeting. After the FOMC’s announcement of the suspension of interest rate hikes, there was a push, and the possibility of a resumption of future rate hikes and the interest rate trend through the end of the year exceeded market expectations, which resulted in a significant bid for the USDJPY. However, the medium- to long-term range could not be broken out and we await tomorrow’s BOJ policy meeting.

Day Trade Strategy (Hourly)

The dollar/yen is range bound, and with the BOJ due tomorrow, it will be difficult to buy aggressively. The upper limit of the dollar-yen range, JPY 140.35, corresponds to 100% of the Fibonacci retracement. As it is a strong resistance zone, selling pressure is also strong.

Since the market has been in a range since early June, the possibility of a breakout into the JPY 141 level next week cannot be ruled out. The longer the range period, the stronger the momentum upon breakout, so caution should be exercised.

Also, although the market has been in a range, the fact that the lows have been gradually cutting up is another point that suggests a future rise.

Support and Resistance Lines

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

JPY 140.35 – Upper range price
JPY 139.30 – Lowest price immediately after the FOMC meeting

Market Sentiment

USDJPY　Sell: 67% Buy: 33%

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.