Fundamental Analysis

• The rise in U.S. long-term interest rates has paused, and U.S. unemployment insurance claims are below expectations.
• Focus is on today’s U.S. employment data, with market expectations at 170,000, slower than the previous report.
• USD/JPY is declining, with the 24-day moving average and the Ichimoku Kinko Hyo’s standard line serving as support lines.

USDJPY Technical Analysis

Analyzing the daily chart of the USD/JPY rate. The 24-day moving average and the Ichimoku Kinko Hyo’s standard line function clearly as support lines. In particular, reactions have been confirmed more than 7 times at the 24-day moving average. The last time this line was broken, there was a significant drop from 142 JPY to 137 JPY.

Furthermore, the Ichimoku Kinko Hyo’s standard line has not been breached since August. The RSI remains around 57, and there has been no movement below 57 since August.

If there’s a movement breaking these support lines triggered by tonight’s employment data release, there is a high possibility that the downward trend will intensify. However, market movements are expected to be limited until the employment data announcement.

Day Trading Strategy (Hourly)

Analyzing the 1-hour chart of the USD/JPY rate. Yesterday’s low was around 148.25 JPY, and if this level is broken, there’s a higher chance of sellers dominating. Currently, long-term interest rates are maintained at high levels, but even a slight decline could lead to an increase in dollar selling. If it breaks below 148.25 JPY, the next target is likely 147.87 JPY.

Market focus is on U.S. employment data. This time, it’s particularly important U.S. employment data that might indicate the possibility of additional U.S. rate hikes. If results significantly underperform predictions like those of ADP, interest rates might drop, and dollar selling is expected to increase. Conversely, if results surpass expectations, dollar buying could intensify, possibly targeting 150 JPY again. Market movements are expected to be limited until the employment data announcement.

For day trading, under the condition of settling before the employment data, sell entry is advised. Entry point at 148.60 JPY, settlement at 147.87 JPY, with a stop at 149.15 JPY.

Support and Resistance Lines

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

148.25 JPY – Yesterday’s low
147.30 JPY – The low immediately after a sharp drop

Market Sentiment

USDJPY　Sell: 69% Buy: 31%

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.