USD/JPY Struggles to Rise, Attention Focused on Bank of Japan Policy Meeting【December 19, 2023】

December 19, 2023

Markets Analysis

Fundamental Analysis

  • Today’s focus is on the Bank of Japan’s policy decision and the Governor’s press conference, with movements toward interest rate hikes drawing attention. 
  • USD/JPY is consolidating around the 240-day moving average, showing limited movement during Tokyo trading hours. 
  • There’s a series of comments from Federal Reserve officials restraining interest rate cuts.

USDJPY Technical Analysis

Analyzing the daily chart of the USD/JPY pair. The battle continues around the 240-day moving average. The drop in U.S. 10-year Treasury yields, leading to a weaker dollar, influences the market, targeting a new low of 140.95 JPY.

After breaking below the 240-day moving average, a recovery followed by a potential decline could occur, possibly leading to a drop to the 138 JPY level. Specific actions toward interest rate hikes at the Bank of Japan’s policy meeting, any surprises, and changes in the Governor’s outlook are the market’s focal points.


Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of the USD/JPY pair. Currently, the RSI is at 48, indicating a potential move below 50. This suggests a resumption of a downward trend. A ‘N-shaped’ pattern is anticipated on the chart, and whether it breaks below 140.950 JPY is a crucial point.

With the Bank of Japan meeting ahead, the Tokyo market is expected to be less active. Depending on the outcome, the market could fluctuate significantly, with a strategy to sell on a rally near the 240-day moving average if rising, and a short-term buy for a reversal around the mid-140s JPY if falling.

Support and Resistance Lines

Upcoming resistance lines to consider:

140.95 JPY: Recent Low
138.15 JPY: Fibonacci Expansion 100%


Market Sentiment

USDJPY Sell: 49%, Buy: 51%

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
Australian Monetary Policy Meeting Minutes9:30
Bank of Japan Policy Announcement11:30
Bank of Japan Governor Press Conference15:30
Eurozone Consumer Price Index19:00
U.S. Building Permits22:30
Canadian Consumer Price Index22:30

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

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