USDJPY Continues to Decline, Beware of Volatility Increase Due to US Consumer Price Index【March 12, 2024】

March 12, 2024

Markets Analysis

Fundamental Analysis

  • Today, the US Consumer Price Index is scheduled to be announced.
  • A certain number of investors are anticipating interest rate hikes, leading to a dominance of USD selling in the forex market.
  • USDJPY has fallen below the 200-day moving average.

USDJPY Technical Analysis

Analyzing the daily chart of USDJPY, the pair is on a declining trend, having touched a low of 146.50 JPY at one point. The market is eagerly awaiting next week’s Bank of Japan meeting, where the possibility of ending negative interest rates is being closely watched.

In the US, the Consumer Price Index will be released. This is generally a day when movements in the USD become pronounced. If inflation is restrained, movements towards a weaker USD may strengthen, but if inflation exceeds expectations, the continuation of high interest rates could lead to short covering.

USDJPY has entered into a large cloud, making its movements complex. Prepare for sudden sharp fluctuations and ensure proper risk management.


Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of USDJPY, the decline has paused in front of the 146.50 JPY support line. Analyzing the RSI, there’s a slight uptrend in the lows. The area below 146.50 JPY appears somewhat solid.

With the conversion line below the baseline, the market might enter a ranging phase in the Tokyo market. Either way, it would be difficult to make moves ahead of today’s US CPI.

The day trading strategy would be to short near the upper limit of the range market around 147.20 JPY, buy back around 146.80 JPY, and place a stop at 147.35 JPY. However, post the London market, the atmosphere might turn cautious ahead of the US CPI, so trading will resume after the CPI announcement.

Support and Resistance Lines

The following are the support and resistance lines to consider:

146.50 JPY – A significant past support line


Market Sentiment

USDJPY Sell: 8% Buy: 92%

Today’s important economic indicators

Economic indicators and eventsJapan time
Australian Building Permits9:30
UK Average Earnings & Employment Statistics16:00
German Consumer Price Index16:00
US Consumer Price Index21:30

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

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