Fundamental Analysis

• The USD/JPY is nearing 149 JPY, and the dollar index is at its highest level since December of the previous year.
• Will the conversion line of the daily Ichimoku Cloud chart become a support line?
• The focus of fundamentals is on future interest rate trends.

USDJPY Technical Analysis

Analyzing the 4-hour chart of the USD/JPY, it is breaking through the resistance zone of 148 JPY and rapidly approaching the 149 JPY range. With the US hinting at another rate hike, the Bank of Japan remains unfazed. As a result, the difference in interest rates between Japan and the US is in focus, leading to a stronger dollar.

Not only USD/JPY but also EUR/USD and GBP/USD are experiencing a stronger dollar, with the foreign exchange market currently revolving around the dollar. There seems to be some profit-taking around the 149 JPY range, leading to a slight decline.

There are concerns about a US government shutdown, which might be leading to some profit-taking. However, the only factor for a stronger JPY is caution against currency intervention, making it a market environment where the JPY is likely to weaken and the dollar strengthen.

Day Trading Strategy (Hourly)

Analyzing the 1-hour chart of the USD/JPY, an outside bar (engulfing pattern) is appearing near the highs. While there is a decline due to profit-taking, the strategy should probably be to buy on dips. There’s a previous range high in the early 148 JPY range, which may see a bounce.

Entry is assumed at 148.55 JPY, stop at 148.40 JPY, and the profit-taking line is set at 148.95 JPY. There’s some concern about the RSI movement, but we’d first like to confirm if the RSI bounces at 50.

Support and Resistance Lines

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

148.46 JPY: Previous range high

Market Sentiment

USDJPY　Sell: 79% Buy: 21%

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.