Fundamental Analysis

• The USD/JPY failed to break above the 149.70 JPY mark and fell into the early 149 JPY range.
• Verbal intervention to curb JPY depreciation by the Finance Minister has no notable effect.
• As long as the Japan-U.S. interest rate difference is not resolved, the trend of a weaker yen and stronger dollar will remain unchanged.

USDJPY Technical Analysis

An analysis of the daily chart for USD/JPY reveals that it’s approaching the upper band of its rising channel. Although the 149.70 JPY high hasn’t been breached, the upward trend remains intact. Verbal interventions to curb JPY depreciation are ongoing, but their impact on the market is limited.

Looking at the Bollinger Bands, a squeeze can be observed, suggesting increased volatility. The 24-day moving average is currently serving as a support line, and furthermore, the vicinity around 148.50 JPY could also act as a strong support zone. Caution is warranted for upcoming movements.

Day Trading Strategy (Hourly)

An analysis of the 1-hour chart for USD/JPY shows resistance in its upper range. The RSI is hovering around the 50 mark, which may indicate a short-term directional key. If the RSI drops significantly below 50, a shift to a declining trend could be expected.

Conversely, if the RSI bounces at 50, an uptrend aiming for a higher high can be anticipated. No significant changes are seen on the fundamental side, so the trend of a weaker yen and stronger dollar is expected to continue.

For a day trading strategy, consider buying. Entry point set at 149.35 JPY, target at 150.15 JPY, and stop loss at 148.950 JPY.

Support and Resistance Lines

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

149.70 JPY – recent high
148.50 JPY – a price zone observed in the past

Market Sentiment

USDJPY　Sell: 75% Buy: 25%

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