Markets Analysis

USDJPY Takes a Breather, Focus on Today’s US PPI【February 16, 2024】

February 16, 2024

Markets Analysis

Fundamental Analysis

  • US Retail Sales See a Significant Decline, US Stocks Rise
  • Negative Growth in Japan and UK, Personal Consumption in Japan Also Declines
  • US PPI Scheduled for Release, Higher Attention Due to Exceeding Expectations of US CPI

USDJPY Technical Analysis

Analyzing the daily chart of USDJPY, it declined from the 150 USD level to near 149.90 JPY. The decrease in US Retail Sales led to selling of the dollar, and USDJPY, which had been overbought, saw profit-taking.

The immediate support level is around 149.25 JPY, which is the conversion line of the Ichimoku Cloud. If it falls below 149.25 JPY, the next downside target is around 148.30 JPY. Given the 100-pip fluctuations, caution is required.

Today, the US PPI will be released. With the US CPI exceeding expectations, the market is looking to the PPI to confirm if there truly is no trend of inflation restraint. Therefore, the PPI today will have a significant impact, and there is a possibility of significant fluctuations after the announcement.


Day Trading Strategy (1-Hour Chart)

Checking the 1-hour chart of USDJPY, it sharply fell after yesterday’s release of US Retail Sales, dropping to around 149.50 JPY. Buying interest is somewhat strong around the mid-149 JPY level. From a technical perspective, it has broken below the Ichimoku Cloud, and returning to the 150 USD level would require somewhat strong catalysts.

Currently, it has fallen to the 61.8% Fibonacci retracement level, and the RSI has dropped to 44. The focus is on whether it clearly breaks below 149.85 JPY. Regardless, depending on today’s PPI, the directional bias may change significantly, so caution is warranted.

The day trading strategy is to buy on dips. Consider buying entry below 149.25 JPY. If it touches the 240 moving average line, it’s a buying opportunity. Settle at 149.90 JPY, with a stop at 148.85 JPY.

Support and Resistance Lines

The support-resistance lines to consider going forward are as follows:

149.250 JPY: Conversion line of the daily Ichimoku Cloud


Market Sentiment

USDJPY Sell: 65% Buy: 35%

Today’s important economic indicators

Economic indicators and eventsJapan time
FOMC Member Comments9:00
UK Retail Sales16:00
US Producer Price Index22:30
University of Michigan Consumer Sentiment IndexMidnight
FOMC Member CommentsNext Day, 2:10

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

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