Markets Analysis

Fundamental Analysis

• BoJ Policy Meeting Reverses YCC Revision Speculation; JPY Weighing Rapidly
• Sell-off continues due to earnings results of US tech stocks; many US companies to report earnings this week
• Fed and ECB expected to raise rates while BOJ left rates unchanged; focus on crosses

USDJPY Technical Analysis

The USDJPY surged close to 142 JPY as the JPY weakened against the dollar. With the Consumer Price Index above 3%, the JPY is selling off as the likelihood of a monetary policy change by the BOJ is low, in line with the theory. The uptrend continues and a channel can be drawn. As the pair is hovering near the upper limit of the channel line, an adjustment is likely once in a while.

Day Trading Strategy (Hourly)

Day trading policy is to buy on the push side. At the time of writing, the price is hovering near the upper channel limit, so we would like to wait until it approaches the lower channel limit and buy aggressively at the push points. Specifically, the pivot point near JPY 141.15 and the 24 moving averages will be our guideline, and we will look for opportunities to hold buy positions in the first half of JPY 141. The stop loss will be set at the point when the price is clearly below the channel.

Support and Resistance Lines

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

142.60 JPY – Major resistance line
141.15 JPY – Pivot point

Market Sentiment

USDJPY　Sell: 59% Buy: 41%

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.