Markets Analysis

Fundamental Analysis

• Major U.S. indices are sharply higher; NASDAQ reaches overbought level with RSI reaching 70
• Stock prices soared due to the AI boom, but beware of adjustment selling
• Nikkei Stock Average also reaches overbought level, watch out for selloff
• ECB announces 0.25% rate hike, President Lagarde indicates intention to continue rate hikes after July
• U.S. retail sales beat market expectations; U.S. economy may be strong even with high interest rates
• BOJ policy meeting in focus; no change expected in interest rate policy

USDJPY Technical Analysis

Today’s key focus will be the BOJ policy meeting. According to most forecasts, the BOJ will decide to maintain its interest rate policy, and the most important thing to watch will likely be BOJ Governor Ueda’s press conference. Japan has exceeded its 2% price target as consumers are beginning to feel the effects of rising prices.

The market is interested in how the BOJ governor plans to revise interest rate policy going forward. With comments from Chairman Powell that there will be no rate cuts in the next two years, if the status quo is maintained, the dollar/yen is likely to gain further ground.

Day Trade Strategy (Hourly)

Day trading policy is to buy at the push unless there is a change in BOJ policy. The policy for Tokyo time is to wait and see. Today’s pivot point will be around JPY 140.52. Yesterday’s rally took the pair well above JPY 140.20, which corresponds to 100% of the Fibonacci Expansion, and blew up to around JPY 141.50. The volatility has been very large since then, with the price being brought back to JPY 140 during the New York session.

The near-term upside target is at JPY 142.35, and a sense of direction is likely to be seen around evening.

Moving averages

The medium-term 72 moving average (3-day moving average) is approaching and it will be interesting to see if it acts as a support line. The long-term 240 moving average (2-week moving average) can also be seen turning upward, albeit slowly.

RSI

The RSI is hovering around 48, a level that indicates a bearish market, and it will be interesting to see if the RSI exceeds 50 again. We will keep a close eye on the RSI after the BOJ policy meeting and the BOJ governor’s press conference.

Support and Resistance Lines

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

JPY 142.35 – Major resistance zone
JPY 140.52 – Pivot point
72 and 240 Moving averages

Market Sentiment

USDJPY　Sell: 63% Buy: 37%

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.