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.


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


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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