Markets Analysis

Bank of Japan maintains monetary policy; expectation is for the weak yen trend to continue for the time being【September 25, 2023】

September 25, 2023

Markets Analysis

Fundamental Analysis

  • The Bank of Japan decides to maintain its monetary policy, bolstering the weak yen and strong dollar trend.
  • Governor Ueda denies any revisions within the year, disappointing those expecting yen appreciation.
  • Russia announces a ban on certain exports, potentially leading to higher oil prices.

USDJPY Technical Analysis

Analyzing the daily chart of the USD/JPY exchange rate, comments from Governor Ueda have pushed the rate up to around 148.5 JPY. The standard line of the Ichimoku cloud acts as a support line, the 24-day moving average is trending upwards, and the 240-day moving average is also slightly inclined upwards. These suggest that the upward trend is continuing.

However, the MACD histogram is decreasing, and the RSI has not been able to renew its high, hovering around 61. Based on these indicators, the upward momentum might be weakening. A key point moving forward is whether it can firmly break above the 148-JPY range. If it does, there’s a good chance of establishing a new upward trend, but if not, there’s potential for a corrective phase.

[USDJPY / D1]

Day Trading Strategy (Hourly)

Analyzing the daily chart for the USD/JPY rate, a reaction at the 240-day moving average is observed, and the 24-day moving average is also trending upwards. This indicates a short-term upward trend. However, 148.48 JPY is the upper limit of the range, and whether it can break above this level is a key focus. Especially, the area around 148.75 JPY is a significant resistance, with a very high possibility of a reversal.

For day trading, consider a buy entry once the rate reaches between 148.75 JPY to 148.80 JPY and confirms a reversal. Entry might change based on market conditions, but a rough estimate would be around 147.85 JPY. A stop at 147.45 JPY and a target of 149.09 JPY are planned.

Support and Resistance Lines

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

148.75 JPY: Monthly resistance line
148.48 JPY: Recent high

[USDJPY/ H1]

Market Sentiment

USDJPY Sell: 71% Buy: 29%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
None in particular

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.

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