USDJPY Declines, Powell, Chairman of the Federal Reserve, Speaks of Possible Rate Cuts Next Year【December 14, 2023】

December 14, 2023

Markets Analysis

Fundamental Analysis

  • In the U.S. FOMC, Chairman Powell Mentions Rate Cuts, Forex Market Sees Weaker Dollar
  • U.S. Stock Indices Surge, Dow Jones Industrial Average Hits Record High
  • USD/JPY Falls to 142 JPY Level, U.S. Rate Cut Speculation Intensifies, Narrowing Japan-U.S. Interest Rate Gap

USDJPY Technical Analysis

Analyzing the daily chart of the USD/JPY market. Chairman Powell, in his post-FOMC press conference, mentioned “considering rate cuts in the future,” and the interest rate forecasts of various Federal Reserve Board members were published. As a result, USD/JPY fell to the 142 JPY level, breaking below the 200-day moving average. In the Fibonacci Expansion, 141.98 JPY corresponds to 161.8%, and 141.60 JPY is the recent low.

Attention is focused on how market expectations for rate cuts based on the intentions of the FOMC participants will impact the market. In particular, the recent low of 141.60 JPY could be a crucial point.


Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of the USD/JPY market. The RSI is at 23, clearly in an oversold state. The recent low of 141.60 JPY is a key point, and whether it breaks this level is the focus going forward.

In the short term, there may be short covering, but in the long term, the market is expected to move downwards as the view of a narrowing interest rate differential between Japan and the U.S. spreads. The trading strategy is to sell on rallies, waiting for the RSI to exceed 30 and recover to 40-50. There could be a chance to sell on a rally around 144.50 JPY.

Considering the current weak dollar situation, the market may adjust once and then strengthen its downward movement, so consider selling on a rally at that timing.

Support and Resistance Lines

Upcoming resistance lines to consider:

144.72 JPY – Key Price Level
141.60 JPY – Recent Low


Market Sentiment

USDJPY Sell: 49%, Buy: 51%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
Australian Employment Statistics9:30
UK Policy Interest Rate Announcement
(Expected: Unchanged)
ECB Monetary Policy Announcement22:15
U.S. Retail Sales22:30
ECB Press Conference22:45

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

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