Markets Analysis

USD/JPY Rebounds, Excessive Expectations for U.S. Rate Cut Lead to Short Covering【December 5, 2023】

December 05, 2023

Markets Analysis

Fundamental Analysis

  • Gold Hits Record Highs but Retreats, Falling Below $2,030
  • In New York trading hours, the Forex market sees a broad rise in the dollar
  • USD/JPY is influenced by Fibonacci retracement

USDJPY Technical Analysis

Analyzing the daily chart of USD/JPY, the overall trend is downward. However, the 38.2% Fibonacci retracement level is acting as a support, leading to a temporary rebound.
Premature expectations for U.S. rate cuts next year have led to short covering, strengthening the dollar. USD/JPY may rebound to just before 148 JPY.
The underlying downward trend remains, and selling on rallies, considering the Fibonacci retracement, appears to be the appropriate strategy.

[USDJPY/ D1]

Day Trading Strategy (1-Hour Chart)

Analysis of the 1-hour chart for the USD/JPY pair. Both the 240 and 72 moving averages are trending downward, maintaining a bearish trend. Selling on the rebound appears to be an effective strategy.

Focus is on whether it will break below the recent low of 146.35 JPY, with a technical forecast suggesting a drop to around 145.25 JPY after breaking into the 146 JPY range. At 144.50 JPY, the 50% Fibonacci retracement and a monthly support line coincide, and a significant rebound should also be considered.

As a day trading strategy, consider selling around 147.30 JPY, settling at 145.65 JPY, and setting a stop loss at 147.50 JPY.

Support and Resistance Lines

Upcoming resistance lines to consider:

148.40 JPY – 23.6% Fibonacci Retracement
146.27 JPY – 38.2% Fibonacci Retracement

[USDJPY/ H1]

Market Sentiment

USDJPY Sell: 51%, Buy: 49%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
Australian Policy Interest Rate12:30
U.S. Services Sector Purchasing Managers’ Index23:45
U.S. ISM Non-Manufacturing Index24:00

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

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