Markets Analysis

Fundamental Analysis

• Crude oil price temporarily rises to USD 88/bbl; concerns about further rise in raw material prices
• Wary of additional U.S. interest rate hikes due to cost-push inflation
• The dollar may be strengthening against the yen as investors become more aware of the difference in interest rates between Japan and the U.S.

USDJPY Technical Analysis

Analyze the daily chart of the USDJPY market. The significant rise in crude oil prices has increased the view that higher raw material prices will accelerate inflation. Against this backdrop, the possibility of additional U.S. interest rate hikes to curb inflation has increased and expanded into a stronger dollar move.

Currently, the dollar has risen to mid-JPY 147, breaking through the resistance line. Based on this move, we would watch the upper band of the rising channel as a guide to the next upside, which could be around 148.75 yen. With the RSI at 62, there is plenty of room for upside.

Day Trading Strategy (Hourly)

Analyze the hourly chart of the USD/JPY market. The RSI has fallen below 70 and is currently at 64. This move suggests that the market is somewhat overheated. In such a market, we believe it is better to wait for a push.

Specifically, we would wait for a decline to the range of ¥146.80-147.10 that the market was aware of in the past. From a fundamental perspective, we expect the upward trend to continue.

Today’s trading policy is “buy on the push”. Entry is set at 147.10 and 146.80 yen, with a target of 148.20 yen and a stop at 146.60 yen.

Support and Resistance Lines

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

148.75 JPY – Past weekly high
146.80 JPY – Daily horizontal line

Market Sentiment

USDJPY　Sell: 81% Buy: 19%

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.