Markets Analysis

Fundamental Analysis

• Focus on the BOJ Monetary Policy Meeting and the Governor’s Press Conference
• Expectation of Status Quo with Attention on Interest Rate Policy in Press Conference
• Yen Weakening Trend Continues as US Rate Cut Speculation Eases

USDJPY Technical Analysis

Analysis of the daily chart for the USD/JPY exchange rate. It has rebounded at the 50% Fibonacci fan and is showing an upward trend. There is resistance around the early 148s on a monthly basis, currently in a consolidation phase.

Ahead of today’s BOJ policy decision, the market continues to adopt a wait-and-see approach, creating a situation conducive to trend formation. Fundamentally, with the BOJ’s rate hike postponed and the timing of a US rate cut uncertain, the Japan-US interest rate differential is likely to remain wide for an extended period. Consequently, a continued trend of a stronger dollar and weaker yen is anticipated.

Although nothing is certain until the outcome of the meeting, the current situation suggests that selling the yen is an effective trading strategy. Consider entering on pullbacks after a sharp fluctuation, aiming to settle around 149.50 JPY.

Day Trading Strategy (1-Hour Chart)

Analysis of the 1-hour chart for the USD/JPY exchange rate. According to Fibonacci retracement, there have been three rebounds at the 23.6% level, forming a narrow range market. If the BOJ decides to maintain policy and there are no surprise comments about rate hikes in the Governor’s press conference, a stronger yen weakening trend is expected.

In market sentiment, 85% hold a selling position. If the price exceeds the recent high of 148.80 JPY, significant stop-loss orders may be triggered. A breakout above the high post-BOJ announcement could lead to a surge up to the late 149s JPY.

Ideally, one would aim for buying on dips, but there is also a possibility of increased counter-selling around the mid-150s JPY. If buying on dips is challenging, consider selling around 150.80 JPY.

Support and Resistance Lines

Upcoming significant support and resistance lines:

148.80 JPY – Recent High
147.75 JPY – Major Support Line

Market Sentiment

USDJPY Sell: 85%, Buy: 15%

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.