Fundamental Analysis

• A Bank of Japan (BoJ) member commented that it’s necessary to consider an exit from negative interest rates.
• With the end of the month approaching, there has been a strong movement towards buying back JPY.
• The U.S. PCE Price Index met market expectations, allowing USDJPY to recover to the 150 JPY level.

USDJPY Technical Analysis

Analyzing the daily chart of USDJPY, the pair temporarily advanced to 149.21 JPY, driven by comments on an exit strategy by a BoJ member, incorporating expectations of ending negative interest rates at the March BoJ meeting.

However, after the potential cessation of negative interest rates, both the Governor and Deputy Governor of the BoJ have shown caution regarding rate hikes. Moreover, with U.S. inflation indicators remaining robust and the Federal Reserve maintaining a cautious stance against rate cuts, a strong trend towards JPY appreciation is not imminent. On the daily chart, the conversion line has acted as a support line, which was not breached. Whether the pair will close below the conversion line of 150.00 JPY today is a point of focus.

Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of USDJPY, the pair dropped to the mid-149 JPY level but then sharply recovered to 150.25 JPY, suggesting buying on dips around the 149 JPY level. The RSI is at 51, indicating a modest upward trend.

The 200-moving average is at 150.330 JPY, serving as a potential resistance level. It’s worth noting whether its role will change after breaking below, having previously acted as a support line.

For day trading, consider selling on rallies near high levels. Look for entry around 150.55 JPY, targeting close to 150 JPY for exit, with a stop at 150.90 JPY.

Support and Resistance Lines

Key support and resistance levels to consider are as follows:

150.00 JPY – Ichimoku conversion line & a round number

Market Sentiment

USDJPY Sell: 65% Buy: 35%

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.