Fundamental Analysis

• ECB Holds Interest Rates Steady at 4.0%, States “It’s Too Early for Rate Cut Expectations” in Announcement
• Bank of England Keeps Interest Rates Steady at 5.25%, Comments in Statement that “Inflation Battle Is Halfway Done”
• USD/JPY Falls to 141 JPY as Dollar Weakens Amid Rising Expectations for Fed Rate Cut

USDJPY Technical Analysis

Analysis of the USD/JPY daily chart shows that for the first time in about seven months, it has clearly fallen below the 200-day moving average, moving between -2σ to -3σ on the Bollinger Bands. This suggests the possibility of a band walk. Although there is a rebound at the monthly milestone price of 140.95 JPY, the RSI is at 32, approaching an oversold level.

With a general weakening of the dollar in the forex market, USD/JPY is susceptible to selling pressure. Whether this downward trend continues until next week’s Bank of Japan policy meeting is a focus.

Day Trading Strategy (1-Hour Chart)

Analysis of the USD/JPY 1-hour chart. The recent low of 141.60 JPY has been breached, falling to 140.95 JPY. This 140.95 JPY level is a strong monthly support zone, with a potential fall to the 130s JPY next year. The RSI was 15 when it dropped to 141.60 JPY, but was 19 during the drop to 140.95 JPY, later recovering to around 37. This divergence, with the price falling and the RSI value rising, can be considered.

Day trading approach: considering the downward trend, favor selling on rallies. Sell entry around 143.50 JPY, take profit at 142.15 JPY, stop at 144.50 JPY. U.S. stock prices are overbought, and selling pressure could increase tonight.

With the Christmas holiday approaching and trading volume expected to decrease over the weekend, the focus is on short-term, cautious trading.

Support and Resistance Lines

Upcoming resistance lines to consider:

144.35 JPY – Monthly milestone price
140.95 JPY – Monthly milestone price

Market Sentiment

USDJPY Sell: 38%, Buy: 62%

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.